Brandon Wipf joined a few other South Dakota soybean people to go to Washington and do some serious lobbying in the nation’s halls of power.
President Donald Trump was out of town, in Brussels sprouting new reactions to his call for European nations to kick in more of their own money for their own defense, when Wipf and others from South Dakota showed up to talk trade and soybeans.
Trump’s recent hiking of proposed tariffs especially on Chinese exports to the United States, on top of already fixed tariff increases from both ends of the unilateral trade tiff
Last week, China said it was slapping a 25 percent tariff on any U.S. soybeans coming in, a rejoinder to Trump’s similar tariff announcement earlier on Chinese steel and aluminum. Trump is not alone in saying China has been cheating on trade rules for years and now he wants to exact a price, he says.
China’s new tariff’s on American beans make them non-competitive, in effect, less valuable.
Earlier this week, Trump’s White House said it was considering imposing tariffs on an added $200 billion of Chinese goods, from seafood to chemicals to car parts.
Because China is the largest foreign market, by far, for U.S. soybeans, farmers here in South Dakota, who have just planted a record 5.7 million acres to beans, feel they are getting the bad end of the stick.
“It’s become a point of frustration, even among some people on the Hill,” Wipf told the Capital Journal on Thursday as he prepared to leave Washington. He farms near Huron, is active in the South Dakota Soybean Association and is on the board of directors of the American Soybean Association. He and several others from the Soybean Association based in Sioux Falls met with Sen. Mike Rounds, R-S.D., and staff members of Sen. John Thune and Rep. Kristi Noem on Wednesday.
“We’re really pushing hard for rescinding these tariffs and resolving these trade issues in a way taht makes a little more sense form the farmer’s perspective.”
The three-person South Dakota delegation on the Hill “is on the same page,” Wipf said.
Since early this spring, based largely on talk from the Trump White House about fighting back with tariffs against China’s tough trade tactics, soybean prices have fallen nearly 20 percent, from about $10.50 a bushel to about $8.50. That $2 per bushel means about $100 less per acre to a South Dakota soybean farmer, Wipf says.
“That’s not elegant economics, maybe, but it’s simple farmer math,” he said.
The state produces nearly a quarter million bushels of soybeans a year, so that kind of price decrease means “we are figuring $400 to $500 million in lost value associated with that.”
It’s real, too, not a theoretical or “only on paper,” sort of loss, Wipf said.
“Because farmers trade on a futures market, it doesnt’ really matter if you have the soybeans in hand or not. Your are obligated to those prices in the future, so the impact is real,whether people want to see it or not.”
On Thursday, USDA said that taking China’s recent added tariffs will cut U.S. exports of soybeans while filling U.S. bins with way more beans than earlier expected. Soybean prices have fallen to their lowest point in a decade, down to $8.26 a bushel in the nearby futures contract in Chicago.
That’s not what farmers expected early this spring because they planted more acres to soybeans than corn for the first time since the early 1980s.
Wipf said that wasn’t a factor on his farm.
“We stick to crop rotations, for conservation and soil health reasons. We try to not get too moved around by the markets. You can get whipsawed.”
He also raises corn, spring wheat and winter wheat, alfalfa and grass hay and how each crop follows and leads the others is a bigger deal than market fluctuations most of the time.
Still, 20 percent less for a crop is a big chunk, he said.
So it was worth it to go to Washington, Wipf said.
Rounds, Thune and Noem together drafted a letter and sent it to Trump, friendly but to their point.
“We appreciate and support your administration’s efforts to address a broad spectrum of trade inequities,” they wrote. “We do not support, however, making agricultural exports, which have been the exception to such trade inequities, bear the brunt of retaliatory actions in response o current U.S. trade policies.”
They turned the term “protection” around to make their point, urging Trump “to negotiate with our trading partners to protect agricultural products from all existing future tariffs.”
Wipf said soybean farmers have been talking to people in Washington about this particular trade face-off for a few months now and he thinks the White House has open ears.
“They will certainly listen to what we have to say. As far as action on that,it’s kind of gone (awry). The President seems to have his own strategy and it doesn’t align with ours.”
To see the letter Rounds, Thune and Noem sent to Trump this week, go online at: https://noem.house.gov/index.cfm/press-releases?ID=22DBA314-D5AB-44E9-BB11-6080E5FFFEA8