U.S. Soybeans Are A Prime Target For Chinese Tariffs
DAVID GREENE, HOST:
China went dollar for dollar with the United States on Friday, imposing its own tariffs on $34 billion worth of American goods. And one product on the list - soybeans. It appears that China wants to inflict pain on rural voters who make up part of President Trump's political base. Trump says tariffs will ultimately help create a more level playing field for American workers, but some in the U.S. are suffering consequences from this back-and-forth.
And we have Michael Petefish on the line with us. He is president of the Minnesota Soybean Growers Association. And he is at member station KZSE in Rochester, Minn. Mr. Petefish, good morning.
MICHAEL PETEFISH: Thanks for having me.
GREENE: Well, thanks for coming on. I know you - in addition to leading this organization, you're a farmer yourself. And I guess if you could take this to a personal level for us, I mean, how important is China as a market for your crops?
PETEFISH: It's tremendously important. On a whole, the United States exports about 40 percent of our soybeans to China. And that would hold (inaudible) farm, too. And when you look at the amount of impact this has had in terms of dollars, since the announcement of retaliatory tariffs, the soybean market has dropped almost $2 a bushel. For my family farm, with the amount of soybeans I produce, that's a - close to $250,000 of lost value.
GREENE: Two hundred and fifty thousand dollars of lost value because of these retaliatory tariffs from China. So, I mean, just talk to me about what that could mean for the decisions you make for your farm and for your family.
PETEFISH: Well, that's a tremendous amount of money to me. And when you look at going forward in terms of what kind of equipment we need to buy or investments we need to make in our business or simply just having the cash flow available to buy next year's inputs - you know, fuel, pay labor, take care of my employees - that's a huge amount of money that is not there to do those things. And farmers have already been operating on really tight margins. I think since 2012, farm income is down almost 50 percent. And there's just not this much room left in the budget to have these types of losses.
GREENE: This sounds like this couldn't have come at a worse time then.
PETEFISH: Yeah, not really. It's - you know, there was starting to be some optimism. The crops are looking pretty good. The prices were slowly rebounding. Some farmers were getting back in the black. And in the matter of about a month or the last three weeks here that - this has almost certainly pushed every farmer back into the red and (inaudible) production costs on soybeans.
GREENE: The president says - you know, I mean, the administration has acknowledged there could be some pain for some in the United States but that overall, he believes his policy is going to help American workers when we talk nationwide. And then you have the agriculture secretary, his agriculture secretary, Sonny Perdue, writing in an op-ed in USA Today recently that the Trump administration stands with farmers. I mean, do you feel that they've got your back even through moments like this?
PETEFISH: Well, I don't know. I think, you know, a little bit we feel like pawns right now in a really high-stakes chess match. And for anyone who's played (inaudible), you're certainly willing to (inaudible) a pawn to ultimately get checkmate. And so this is something he just absolutely has to get right. And we won't know that until it's over. But in the meantime, no, it feels a little bit like being used as the pawn. And if you want to balance trade, you should use - you should do more trade, not less.
You know, agricultural trade was working. And if you have issues with IP or auto or dishwashers or solar panels, maybe you need to look at those than take something that was working and try and offset it. So if overall, we just have the same amount (inaudible) in the United States, agriculture will be essentially subsidizing the other industries.
GREENE: Michael Petefish is the president of the Minnesota Soybean Growers Association. Thanks so much for your time this morning.
PETEFISH: Thank you.
(SOUNDBITE OF MANDARIN'S "MOONCAKE")
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