With the United States and China in the midst of another round of trade negotiations, Kansas farmers have their fingers crossed that sanctions against agricultural commodities, including meat, dairy and grain, will be lifted.
Its been seven months since tariffs between the countries were ramped up. A hiatus in the tariff war beginning in December has allowed a trickle of trade.
Yet with a 25 percent duty tax still imposed on soybeans, U.S. sales to China are down by 13.5 metric tons, a value of $7.9 billion, according to a recent report by the United States Department of Agriculture.
For 2019, a total of 27.5 million tons of U.S. beans are predicted to go unsold.
In 2017, U.S. exports of beans to China were worth $12 billion, proving that the longer the standoff goes, the less likely the old markets will return.
Increasingly, other countries are viewing trade tensions between the U.S. and its partners as an opportunity. And China is making no bones about filling the gaps. Once the largest purchaser of U.S. beans, China is now its fifth-largest, switching to Brazil to make up the difference.
Other countries are gaining a foothold as well.
Trade with Russia, for example, jumped by more than 27 percent in 2018, primarily in oil and gas, but also in grains. The demand for Russian soybeans is up tenfold over the last four years, to nearly 1 million tons.
A world-wide glut in commodities also has lowered the demand and thus price for food, compounding farmers woes.
A RESULT has been an increase in farm bankruptcies, now at their highest level in the last 10 years according to the 10th Circuit Court of Appeals.
A recent story in the Wall Street Journal had this dismal news:
For 2018, U.S. farm debt climbed to more than $409 billion, the largest sum in nearly four decades and a level not seen since the 1980s, when farmland values plunged and interest rates skyrocketed, boosting debts and pushing many farmers and lenders out of business.
Nationwide, the volume of loans to fund current operating expenses grew 22 percent in the fourth quarter from year-ago levels, hitting a quarterly record of $58.7 billion.
The average size of these loans rose to $74,190, the highest fourth-quarter level in history when adjusted for inflation.
