Originally posted by: PJ Stroh
Interesting point.
China did boycott US soybeans in Trump's first term - but they didnt have a solid plan to go eleswhere for them. So it was painful for them. China remedied that in the years to follow. Brazil makes enough soybeans to supply all of China if need be - and thats who China has turned to in the context of the ongoing trade disputes.
The leverage Trump has in the short term is the logistics and pricing for Brazil soybeans is not favorable for China compared to what they were getting from the US.....so they're paying more. For now. Thats not a permanent problem.
Going forward it will be interesting to see how it all falls out. I predict China will permanently try to ease its dependance on the US for its soybeans.....just like the US will permanently try to ease its dependance on China for rare earth metals. Thats doesnt paint a bright picture for US soybean farmers. Lets hope for their sake Im wrong.
Well...you're not wrong. I was going to say "unfortunately," but ill fortune has nothing to do with it. They voted to have their livelihoods destroyed and now, guess what, their livelihoods are being destroyed.
I researched this. How difficult, and how costly, would it be for a soybean farmer to switch to another crop?
1. That switch would likely have to be to an export crop, since our domestic consumption needs are already fully met. In fact, our farmers produce twice what we consume.
2. Export crops are much harder to sell now because of the Trump wars and reciprocal tariffs.
3. Doing a crop changeover, unless to a virtually identical crop, takes both capital and time. The effect is usually the equivalent of one year without significant income. And banks are very reluctant to lend for that purpose.
4. A farmer might decide to let his fields lie fallow until Trump is dead and/or the Trumpiffs are removed. The obstacle there would be, of course, how to not go bankrupt in the meantime.
5. One thought would be to switch to a crop that we import, since Trumpiffs would have made such a crop more expensive. Trouble is...there are very few such crops, because usually, anything in demand, we can and already do grow here. But there might be opportunities in produce that we normally import from Canada or Mexico.
6. Part of Project Mein Kampf, er, 2025 is the removal of all farm subsidies, which keep many farm businesses afloat.
So my admittedly amateur analysis is that the coming months will see thousands of farmers (of all types) going out of business. They will, of course, blame Biden and/or the Democrats. Anyone but themselves.