Harvesting Rye

Darryl Custer of Custer Farms harvested rye near Bloomer on Aug. 8.

As Doug Custer combined a field Aug. 8, he expressed concern about the soybean market and the dropping prices he is receiving for his product.

China, which has historically been the largest worldwide importer of soybeans, has stopped purchasing the crop from the United States because of a trade war with President Donald Trump. The U.S. is set to impose new tariffs Sept. 1 on $300 billion of Chinese products.

“It’s certainly not helping the situation at all,” Custer said. “You can’t take your biggest customer away and not be affected. Farmers are going to struggle because of it.”

Custer, co-owner of Custer Farms, said they have 2,000 acres of soybeans between Chippewa and Eau Claire counties this year. In 2013 and 2014, soybean prices spiked to a record high of about $18 per bushel. This year, he might be getting $8 per bushel.

“That was an anomaly on the high side,” Custer said of those strong sales years. “I think $12 to $14 range is where it should be. I think the tariffs are costing us a buck or two at this point.”

Jerry Clark, Chippewa County UW-Extension agriculture agent, said he is hearing from many farmers who are concerned about the low prices for their soybeans.

“For most of the farmers in this area, soybeans is the biggest affect (from tariffs), because that is the big exporter,” Clark said. “The (profit) margins are sure tight anyway. It’s going to encourage farmers to store (beans) this fall, to see if they can ride this out. They’ll store quite awhile, when they’re dry; it’s several months to over a year, if you do it right.”

Custer agreed, saying “we’ll hold onto them as long as we can.”

Clark said the U.S. farmers can try selling their soybeans to other markets like South Korea or Japan. However, there are enough countries producing soybeans now that China may not need to buy them from the United States.

“(Prices) have been cut in half from the record prices,” Clark said. “If (farmers) can get $10 (per bushel), they’d be happy.”

Farmers in Chippewa and Eau Claire counties averaged 41 bushels per acre in 2018, according to the U.S. Department of Agriculture. Dunn and Barron county farmers averaged 43 bushels per acre. The highest numbers in west-central Wisconsin were 49 bushels per acre in Pierce County and 45 bushels per acre in Buffalo County.

Another U.S. crop that is typically exported to China is ginseng. However, Clark said there are very few ginseng producers in the area, saying it is more common in the Wausau area. Ginseng is challenging to grow because it takes several years to produce, and that ground can’t grow ginseng in future years, he explained.

“There may be a few in the area, but they are scattered, few and far between,” Clark said.

Trump has insisted that the tariff war is hurting China but not the United States. He tweeted this week: “Trumps got China back on its heels, and the United States is doing great.”

But his administration is providing $16 billion in aid to American farmers — on top of $11 billion last year — to offset sales lost after China imposed retaliatory tariffs on soybeans and other U.S. farm products.

Clark said area farmers are aware those dollars are available.

“There have been a few programs where farmers have been able to get a market adjustment,” Clark said. Most farmers just want to get fair prices.”

That was Custer’s reaction to the federal farm aid dollars.

“I don’t know if any farmer wants the government to help us out,” Custer said. “I’m still cautiously optimistic this will work itself out.”

Custer isn’t too concerned the newly imposed tariffs that will begin Sept. 1 will hurt him more because China had already stopped purchasing soybeans.

“I don’t know how much more bad news there can be,” he said.

The trade war has hit farmers already beset by years of low commodity prices due to global overproduction and this year a string of bad weather. U.S. farm income dropped 16% last year to $63 billion, about half the level it was as recently as 2013.

U.S. agricultural exports to China dropped by more than half in 2018 after the trade war began, falling from $19.5 billion in 2017 to $9.2 billion in 2018.

Trump’s overwhelming support in rural America was crucial to his narrow 2016 election victory and maintaining farmer’s backing is critical to his re-election bid. In June, 54% of rural voters approved of Trump’s job performance compared with a national approval rating of 42%, according to a Gallup survey of 701 self-identified rural voters.

The Associated Press contributed to this report. Contact: chris.vetter@ecpc.com.