MINNEAPOLIS (WCCO) – Farmers of Minnesota's largest export are expressing concern after China proposed a 25 percent tariff on soybeans. On Wednesday, soybean futures took a sharp decline on the Chicago Board of Trade. They fell 40 cents a bushel, or 2 percent. Soybean futures are up 10 percent from one year ago. Still, Minnesota farmers are worried about a trade war with the largest consumer of U.S. Soybeans.
"Right now farm economy is really struggling, farm incomes are down 50 percent since 2013," Minnesota Soybean Farmers Association Board President Michael Petefish said.
Petefish said the proposed 25 percent tariff on soybeans to China is another challenge facing an already tight farming economy. He is also a soybean farmer.
"We have a good thing going with agriculture products. We need to sell soybeans to China, China needs to buy our soybeans so leave it alone," Petefish said.
He says if states export less, it would also affect the price in this country.
"If there's not an export market for that grain they're not going to pay as much locally. That means there's more soybeans locally. That means end users don't have to pay as much. You start getting the local price depressed," Petefish explained.
It's a fear felt by many Minnesota soybean farmers. Farmer Cole Trebesch said the trickle down of a tariff could affect the sustainability of rural parts of the state.
"Soy in Minnesota creates a lot of jobs, its Minnesota's largest export," Trebesch said.
Chinese tariffs won't take effect immediately. Farmers hope by the next soybean harvest, the two countries will have ended what farmers are calling a game of chicken.
"We don't feel you can balance a trade deficit on the backs of farmers. Our hope is cooler heads prevail," Petefish said.
On Wednesday the president tweeted about the tariffs:
His press secretary said it would be a few months before tariffs on both sides go into effect and they're hopeful China will do the right thing.
Minnesota is the fourth leading exporter of soybeans.
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