Oct 25 2018
WASHINGTON, D.C. – Data released today from the U.S. Department of Agriculture show the administration’s trade war is creating an increasingly critical situation for U.S. soybean growers, with zero exports to China last week in what is typically the peak season for shipments. During the same week last year, the U.S. exported 1.74 million metric tons of soybeans to China. About 70 percent of North Dakota soybeans are typically exported to Asia, primarily China.
U.S. soybean exports to China this marketing year, which began September 1, total 201,685 metric tons, compared to 6.4 million metric tons at this time last year, a 97 percent decrease. According to reports this week, in response to the trade war, China is moving to cut U.S. soybeans out of their market, shifting their supply chain to U.S. competitors like Brazil and cutting soybeans out of animal feed.
“These numbers are staggering and unprecedented since North Dakota farmers have spent decades developing the Chinese market for their soybeans. The loss of the Chinese market due to the administration’s trade war is an unfolding disaster for North Dakota soybean farmers,” Heitkamp said. “North Dakota farmers work hard all season and take huge financial risks to get their crops from seed to the combine. But instead of a payday, they’re facing financial hardship and uncertainty as they struggle to store their beans. It’s time for the administration to realize that there are no winners in a trade war.”
The decline in U.S. soybean exports to China is illustrated in the following graph:
Weekly Exports of U.S. Soybeans to China
Source: USDA/FAS/Export Sales Reporting, 10/25/2018
As North Dakota farmers struggle to find a market for this year’s crop, reports show that the administration’s trade war is continuing to worsen the outlook for North Dakota soybean farmers. As CNBC recently reported, farmers are having trouble finding a place for this year’s crop, leaving unsold beans occupying grain elevators and bins rather than heading overseas.
The trade war’s impact could have negative consequences on the ag economy for up to five years, according to William Wilson with NDSU. According to Wilson, without the trade war with China, soybean prices would be near $13 instead of the current $7 per bushel. In some areas of North Dakota cash bids for soybeans have fallen below $7 per bushel, as North Dakota grain buyers struggle to find markets for “refugee soybeans” that “don’t really have a home anymore” due to the trade war.
Soybeans are an important part of North Dakota’s ag economy. For example:
- 71 percent of North Dakota Soybeans are Exported to Asia, Primarily China
- Total value of North Dakota’s 2017 Crop: $2.1 billion
- North Dakota is ranked fourth in the nation for the number of soybean acres planted this season according to a September USDA Crop Production Report
- Cass County was the top soybean producing county in the United States last year, according to the North Dakota Soybean Council
While some markets like the European Union increasing their purchases of U.S. soybeans, it’s not nearly enough to make up for the decline of the Chinese market. North Dakota’s infrastructure is best positioned to export beans to China, making it harder and more costly for North Dakota farmers to sell their soybeans to other parts of the world.
Soybeans are particularly hard to store, especially if grain bins are not an option for a farmer. NDSU recently released resources and helpful tips on soybean storage for farmers tackling soybean storage for the first time.
Heitkamp has been proactively fighting for smart trade policies to protect North Dakota’s economy. From the beginning of the NAFTA renegotiation, she has pushed for a quick resolution to the talks in a way that strengthens U.S. agriculture and preserves market access to North Dakota’s top two trading partners. She has taken action by:
- Pressing top officials since the beginning of this administration to protect and expand markets for North Dakota goods. Heitkamp has met with the U.S. Agriculture Secretary (USDA), U.S. Trade Representative (USTR), U.S Commerce Secretary, and many other top U.S. administration officials – many of them several times – to explain that the U.S. needs smart trade policies to allow our farmers, ranchers, and manufacturers to reach new markets – not tariffs, uncertainty with NAFTA, or hostility toward our top trading partners. Heitkamp recently pushed USDA for improvements to the aid package for farmers suffering from slumping commodity prices and an uncertain future for this season’s crop. In February 2017, when she first met with USDA Secretary Sonny Perdue, when he was a nominee for the position, the bulk of their conversation focused on trade. Heitkamp pushed Jerome Powell, Chairman of the Federal Reserve, on the impact of the administration’s trade war on the U.S. economy. Powell agreed that imposing tariffs over a sustained period time is the wrong thing to do for the economy.
- Engaging with North Dakota’s critical trading partners like Canada and Mexico. In frequent meetings and phone calls with the Mexican and Canadian Ambassadors to the U.S., Heitkamp has worked to protect the trade relationships that keep North Dakotas export-dependent economy thriving. She recently coordinated a meeting between North Dakota farmers and ranchers and the Mexican ambassador to help maintain their trade relationship amid the uncertainty caused by the administration’s trade war and NAFTA renegotiation.
- Supporting bipartisan legislation to stop tariffs. Heitkamp joined U.S. Senator Bob Corker (R-TN) leading a bipartisan group of eight other senators in introducing legislation to require congressional approval of tariffs designated for national security reasons. Heitkamp also cosponsored bipartisan legislation introduced by Republican U.S. Senator Jeff Flake from Arizona to nullify the aluminum and steel tariffs.
- Introducing legislation to help farmers and ranchers recover losses they face because of the administration’s trade war. In July, Heitkamp introduced legislation that would make Trade Adjustment Assistance (TAA) available – at no additional cost to the existing TAA program – to farmers and producers whose exports are hurt by retaliatory tariffs caused by the administration’s trade policies. She also introduced a bill to direct funds the government is collecting from tariffs on imported goods toward trade promotion assistance to help open new markets for farmers and ranchers hurt by the trade war.
- Gaining input from North Dakotans. Heitkamp has regularly met with folks from North Dakota impacted by trade, including recent meetings in Washington with North Dakota growers of soybeans, corn, barley, and other commodities, as well as manufacturers and small business owners. She has held a series of meetings across the state to gain input from North Dakotans in agriculture, energy, and manufacturing. And she launched a web survey to gain input from North Dakotans to help inform how she can best push back on the administration’s actions on trade.
- Outlining her agenda to strengthen and protect North Dakota’s economy. During a meeting with USTR Robert Lighthizer earlier this year, Heitkamp laid out her top four priorities to support North Dakota workers, farmers, and businesses by enabling them to export their products abroad, and continues to speak out against the administration’s escalating trade war with China, which also threatens North Dakota’s main industries – energy, agriculture, and manufacturing.
- Raising concerns about impacts of retaliatory tariffs on the manufacturing industry. Heitkamp recently toured WCCO Belting, Inc. in Wahpeton and heard firsthand the concerns the North Dakota manufacturer has about trade wars and its ability to export its goods. Over half of WCCO’s sales are to international customers, making trade an essential part of its business model.
- Speaking out against tariffs and uncertainty regarding NAFTA that would put the state’s economy at risk. Heitkamp has met with farmers, ranchers, and manufacturers across North Dakota to talk about the need for smart trade policies that support North Dakota. She penned op-eds in March 2017 and again in April 2018 making the case. In February, she also did an episode on her podcast, The Hotdish, about NAFTA and the importance of trade for agriculture. For the episode, she interviewed the former U.S. agricultural trade negotiator and a North Dakota barley farmer. Earlier this year Heitkamp brought a group of North Dakota agriculture leaders to the Mexican Embassy in Washington to talk about the importance of NAFTA and reinforce their commitment to a strong relationship with their customers in Mexico.
- Pressing for analysis about the impact of the administration’s trade policies on small businesses. Heitkamp recently called on the U.S. Small Business Administration’s (SBA) Office of Advocacy to analyze the impact of the administration’s tariff policies on American small businesses. Small businesses represent nearly 99 percent of all businesses in North Dakota, and support nearly 60 percent of all jobs in the state, according to SBA.