Is it bad timing or bad karma, as U.S farmers have watched markets for both corn and soybeans tank.
Last year, China purchased about 45% of all U.S. soybean exports and usually secures about 40% of its annual U.S. soybean needs by early October. But so far this fall, China has not purchased a single bean. The National Corn Growers Association is projecting that the expected market-year average farm price for this year’s corn crop will be $3.90 per bushel, while the cost of production is estimated at $4.75, leading to a $0.85 per bushel loss. Soybeans are also headed for negative returns, with projections for cost of production ranging from $11.00 to $13.20 per bushel, with current prices at just over $11 per bushel.
While there has been a lot of attention focused on China not buying U.S. soybeans, reports indicate that China is now sourcing beef and pork from markets other than the U.S., possibly in retaliation for Trump slapping his tariffs on Chinese goods. In 2024, China bought approximately one and a half billion dollars of U.S. beef, which may not have a large impact on beef producers this year, since the beef herd is the smallest it has been since the 1950s. The value of U.S. beef sent to China dropped to $8.1 million in July and $9.5 million August, according to Chinese trade data, compared to $118 million and $125 million in the same months last year. In the U.S., beef retail demand and prices are approaching record highs. As the trade war goes on, China is developing trading relationships with other countries like Brazil for their beef and pork, and U.S. producers may have trouble recapturing that market in the future, since Brazil is increasing it’s beef export to China’s, while Australia is shipping China its grain-fed beef, which is the closest equivalent to U.S. beef.
Trump is touting using billions of dollars of tariff income to replace agricultural producer’s loss of markets because of the trade war. But the reality is that those payments will not be financed by China or any other country that sends goods to the U.S., but by citizens who buy imported products that have had U.S. tariffs levied on them.
As if U.S. ag producers don’t have enough concerns already, the Trump administration will be imposing port fees next week on Chinese-Owned or operated vessels and on Chinese built vessels that are operated by non-Chinese companies. Ships that are carrying, say containers of U.S. produced grain, but are owned by a Chinese company, will be charged when they pick up that shipment of grain whether it’s going to Europe, or to another port in the U.S. Fees will be assessed “per U.S. voyage, starting at $50/net ton and rising annually.” There’s concern that these fees will likely increase the cost of grain that is exported to customers around the world, making U.S. grain less competitive in the world marketplace.
Cuts to the USDA budget are affecting farmers, but also all of us who live near or work in National forests. Last week, the Forest Service announced that the agency will “scale back hazardous fuels treatments like prescribed burns, halt the processing of permits, state grants, and reimbursements for ongoing forest management on non-federal lands.
In the 1600’s, Oxford scholar Robert Burton coined the idiom, “Penny wise and pound foolish.”
For more information about how tariffs are affecting farmers and ranchers, Agamerica has some interesting views. onhttps://agamerica.com/blog/farm-tariffs/
Additional information about U.S. implementation of port fees for Chinese vessels:
- Per net ton for Chinese-owned vessels, higher of per net ton or per container for Chinese-built vessels, and a fixed fee per Car Equivalent Unit (CEU) for foreign-built car carriers. Operators can receive fee suspensions by ordering and taking delivery of U.S.-built vessels of equivalent size. : Fees are assessed per U.S. voyage, starting at $50/net ton and rising annually.
Chinese-Built Vessels (Non-Chinese Operators): Fees are based on net tonnage or per container, with the higher of the two fees applying.
Foreign-Built Vehicle Carriers: A flat fee of $150/CEU is imposed.
Fee Structure & Increases:
Chinese-Owned/Operated: Starts at $50/net ton (Oct 2025) and increases annually to $140/net ton by 2028, assessed up to five times a year.
Chinese-Built Vessels: Starts at $18/net ton or $120/container (Oct 2025) and increases over three years.
Foreign-Built Vehicle Carriers: Fixed at $150/CEU starting in October 2025.
These measures are intended to support U.S. shipbuilding and manufacturing by addressing what the U.S. Trade Representative considers unfair advantages gained by China in the shipbuilding industry.
Incentives for U.S. Vessels: Operators can suspend fees for up to three years if they order and take delivery of a U.S.-built vessel of equal or greater size.
- A portion of U.S. liquefied natural gas exports must be transported on U.S.-built and operated vessels, a mandate that gradually increases over 22 years starting in 2028.
The Potential Impacts:
Increased Costs: Fees could lead to higher global shipping costs.Trade Disruptions: The measures may disrupt global trade flows and supply chains.
Higher Consumer Prices: Businesses and consumers may bear the cost of increased shipping expenses.
