Donald Trump’s trade war has already forced a GOP-led Congress to issue $12 billion in aid to farmers, paid for by U.S. taxpayers, and now it’s likely going to get much worse. China is preparing to completely pull out of the U.S. soybeans market, of which the country purchases approximately one-third of its supply.
How will China manage this goal? Officials started by slapping a 28% tariff on American soybeans and now they want to simply feed their livestock less food.
The world’s largest buyer of soybeans uses the product to provide protein for its livestock including pigs and chickens.
A top industry group in the country now says they can afford to feed their animals less food. Further, they claim the country is suffering a “bottleneck” because of its reliance on US-based soybeans.
The U.S. Farm Bureau notes that China’s retaliatory tariffs have “resulted in a sharp decline in China’s purchases.”
Shipments to China along the Mississippi River have fallen by a mind-boggling 98% while shipments from the Columbia River are down 95% and the Puget Sound supply line has dropped by 91%.
As China continues to purchase less soy, other trade partners have picked up some of the slack. Farmers are shipping to 41 countries, up from 30 countries last year. However, those countries are purchasing soybeans at a decreased cost because of the 231 million fewer bushels of soybeans purchased by China.
The USDA “currently projects the marketing year average price [of soybeans] at $8.60 per bushel, down 73 cents from the prior year and the lowest price in more than a decade.”