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Midwest farmers are wary of talk about tariffs

A worker at a Minnesota grain elevator helps load soybeans onto a train bound for the west coast export market. Mark Steil

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Grain companies in the midwest this year have been busy loading soybean trains for overseas sales.  Soybean exports are so good they’ve almost single-handedly raised the price of the commodity.  But President-elect Donald Trump’s threats of trade sanctions has farmers wondering if that will continue.

At the CHS terminal in the tiny town of Ruthton in southwest Minnesota, grain manager Joel Wiering is watching a crew load soybeans onto a Burlington Northern Santa Fe train. “We’re putting 3,700 bushels of beans on this car, and we’re loading it anywhere from three to four minutes,”  said Wiering.

When fully loaded, the mile-long train will transport more than four million dollars worth of soybeans to the West Coast. “Very huge. Without access to the export market, we’d be in some trouble,”  said Wiering.

And so would farmers.   The U.S. sells about half its annual soybean crop overseas, total value about $20 billion.  Bean prices aren’t all that great right now, below break-even for many farmers.  But prices probably would be a lot worse minus the robust exports.  That makes President-elect Trump a key figure for farm income.  Many rural areas of the U.S. voted resoundingly for Trump, even though the candidate hammered the same trade deals that help boost the farm economy in those areas.  Trump has even threatened to impose trade sanctions on the largest buyer of U.S. soybeans.

“China is ripping us off like nobody has ever seen,”  said Trump during a campaign appearance. 

 That sort of talk can stir up unsettling flashbacks in the agricultural world.   Farmers with long memories can still recall times when exports suffered after becoming entangled in world politics.  One case was in 1980 when President Jimmy Carter halted grain sales to what was then still known as the Soviet Union, in retaliation for its invasion of Afghanistan. “I am determined to minimize any adverse impact on the American farmer from this action,”  said Carter during a speech to the nation on the Soviet invasion. 

Despite that presidential pledge, the nation’s largest agricultural group, the Farm Bureau, said the embargo cost farmers a billion dollars and permanently disrupted the grain trade.  Now farmers like Brad Nelson from southern Minnesota are waiting to see if the Trump administration acts on its tough trade talk, and wondering what harm that might do to the agricultural economy. “It’s an unknown factor right now because you don’t know what anybody’s going to do at any given time,”  said Nelson. 

 The 58-year-old voted for Trump in the presidential election.  He said he found himself agreeing with the real estate mogul on many issues, like cutting the number of government agricultural regulations and reducing health care costs.  But if Trump really goes after China and other countries, and if China retaliates, that could hurt U.S. farmers.  That possibility is not lost on Nelson.

 “Our exports to China obviously have exploded the last ten or fifteen years. We have good exports of grain and soybeans to Mexico,” said Nelson.   “And we need to keep things like that happening.”

 Nelson is optimistic, though.  He pointed out that during the campaign Trump surrogates promised not to disrupt agricultural trade.   He’s counting on the new administration to fulfill that pledge.

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