Caught Between Trump's Tariffs And Tax Changes, Soybean Farmers Face Uncertain Future : The Salt A daunting trifecta is threatening many Midwest farmers' profit margin: wet fields, stubbornly low crop prices exacerbated by a trade war with China — and some twists from the new tax law.
NPR logo

Caught Between Trump's Tariffs And Tax Changes, Soybean Farmers Face Uncertain Future

  • Download
  • <iframe src="https://www.npr.org/player/embed/660850235/660850236" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
Caught Between Trump's Tariffs And Tax Changes, Soybean Farmers Face Uncertain Future

Caught Between Trump's Tariffs And Tax Changes, Soybean Farmers Face Uncertain Future

  • Download
  • <iframe src="https://www.npr.org/player/embed/660850235/660850236" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

NOEL KING, HOST:

Across the Midwest, it's grain harvesting time. And this year, there are three big problems. One is wet fields, two, low crop prices exacerbated by a trade war that decimated the Chinese market for soybeans, and third, some twists from the new tax law. Amy Mayer reports from Iowa Public Radio.

AMY MAYER, BYLINE: As Branon Osmundson harvests soybeans in Randall, Iowa, the combine's blades cut the stems, pods are pulled apart and the hard, yellow beans fill the hopper. Osmundson's cousin pulls a matching red tractor up alongside, positioning the attached grain cart to catch the beans as they're augured out of the combine.

(SOUNDBITE OF SOYBEANS FILLING GRAIN CART)

MAYER: The U.S. Department of Agriculture predicts a record soybean harvest this year. But China, once a major market for soybeans, imposed a 25 percent tariff, slashing imports. That knocked $2 a bushel off the price Osmundson will get, costing him tens of thousands of dollars.

BRANON OSMUNDSON: It's one more thing that we have pretty much no control over, it seems like, that affects us greatly. So I guess we're just kind of rolling with the punches here on this.

MAYER: And the punches keep coming this year. Besides the tariffs, persistent rain pushed harvest back by weeks. And there's the new tax law that could have a big effect on farmers who sell their crops to the local grain cooperative. Iowa State University ag economist Keri Jacobs says the law's changes make who to sell to a dicier proposition.

KERI JACOBS: That's what's hard to nail down. And that's where farmers are in their marketing decision process at this point.

MAYER: For example, a farm with lots of employees might be better off selling to a private ethanol plant. But one with no employees might benefit from joining a co-op. Mike Helland, who farms near Huxley, Iowa, serves on the board of Heartland Co-Op. He says even though he's been paying close attention, he still doesn't understand how the changes will affect his bottom line.

MIKE HELLAND: I've contacted my accountant about it. And he's still going to school and learning about it. So he didn't feel comfortable, at this point, advising.

MAYER: For now, Helland's more concerned with bringing in his crop.

HELLAND: Most of us will be glad when this year's just over.

MAYER: The agriculture department promised farmers $12 billion to help offset the tariff impact. But Osmundson says that's not a real fix.

OSMUNDSON: But we are in an election year, so I figured there would probably be something like that coming out.

(SOUNDBITE OF HOPPER CRANKING OPEN)

MAYER: At the Key Co-op elevator in Roland, Iowa, Steve Webb cranks open the hopper on a semi to let soybeans cascade into a pit. From there, they'll be conveyed to a nearby storage bin. Iowa State ag economist Chad Hart says higher prices are on the horizon.

CHAD HART: And so as we look out into the spring of 2019, we do see some reasonable prices out there. But that means we're going to have to hold this crop for six, seven months to get there.

MAYER: And with all the rain, some elevators are storing soybeans that can't sit that long. Meanwhile, Mexico, Malaysia, Indonesia and even Argentina have stepped in to buy U.S. soybeans.

HART: China went and bought a lot of beans from Argentina, left them a bit too short. They had to come into the world market. They bought some from us. And so you're seeing some really interesting trade flows.

MAYER: But still about 200 million bushels that would have gone to China need to find another customer. On dry days, farmers are razor-focused on just getting in this late crop. But with tariffs, taxes and quality to worry about, this nerve-racking season isn't going to end when the last beans hit the bin. For NPR News, I'm Amy Mayer in Ames, Iowa.

(SOUNDBITE OF TRACE BUNDY'S "TIMEPIECE")

KING: Amy's story came to us from Harvest Public Media. It's a station collaboration reporting on food and agriculture.

Copyright © 2018 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.