On the front lines: trade trade leavers soy growers in North Dakota

On the front lines: trade trade leavers soy growers in North Dakota

Colfax, N.D. | Reuters – North Dakota bet more on Chinese soybean demand than any other U state.

The industry here – on the northwest edge of the US farm zone, close to Pacific ports – spent millions on the rail storage and loading infrastructure and boomed plantations five times in 20 years.

Now, as the world's top soybean importer violates the U market for the second growing season, Dakota farmers are suffering from losing the customer who spent forty years earning.

The state's experience underlines the uneven impact of US-China trade war across the United States. While Chinese tariffs focus on many countries in the world, they supported, as North Dakota, the election of President Donald Trump's 2016, those who are further south and from the east can remove surplus soybeans. to other markets such as Mexico and Europe. They also have more processing plants to produce soybeans, as well as more livestock and poultry industries to eat.

For North Dakota, China has destroyed a major source of income – about 70 per cent of the state's soybeans were lost. Agriculture is the largest industry in North Dakota, exceeding energy and accounts for 25 per cent of its economy.

“North Dakota probably took more than anyone else from the trading situation with China,” said Jim Sutter, CEO of Soybean Export Council.

In its survey of second quarter agricultural credit conditions this month, Minneapolis Federal Reserve Bank said 74% of respondents in North Dakota reported lower net farm income.

China closed the door to all US agricultural purchases on 5 August after Trump reinforced the conflict with the threats of imposing additional tariffs on $ 300 billion in Chinese imports, some as early as September 1 ( all US $ figures).

Some farmers relied on farm aid payments of $ 28 billion to the Trump administration to compensate them for trade war losses, but not to be disappointed with new payment rates for counties in North Dakota.

Rates are below the rates for some southern states that are significantly less dependent on exports to China. The US Department of Agriculture decided that other states had a higher “level of exposure” to tariffs than North Dakota because they grow other crops, such as cotton and sorghum, which hit the Chinese tariffs, according to a short written statement from the USDA as answering questions from Reuters.

And soy recorder supplies are still being stored and another crop with early harvest, farmers in the US soybean state with the best access to ports serving China can not sell their crops for profit.

Rail lighters typically send more than 90 per cent of North Dakota soybeans they buy to Pacific Northwest export terminals. Now they are trying to make a shortage of the deficiency by removing corn, wheat and other crops with a limited demand. Some are moving soybeans south and east to home users, a more expensive effort that eliminates margins and farmers alike.

Lost demand

Soy farmers who planted this spring – when the White House was dealing with trade almost finished with China – looked at when these trade talks collapsed in May, sending prices below their cost t production.

Vanessa Kummer has no single soybean farm at Colfax, N.D., about 50 km south of Fargo due to the low prices. Normally, the farm would sell 50 to 75 per cent of the coming autumn.

She is afraid that China's Chinese soy trade will be permanently damaged as China transfers its purchases to Brazil, uses less soya in animal feed and consumes less pork as African fever kills pig pig.

“It will take years to return to anything we had more in China,” said Kummer, standing in a hot field of high-ankle vessels, where she hosted a delegation of soy importers from Ecuador and Peru. .

Although the state is soy No. 4 on the whole, two of the three counties are mostly producing soy in the country by North Dakota.

There are limited options for North Dakota farmers. Export wheat has been losing export market share for years. Demand for specialty crops such as peas and lentils, which grow well in the north United States, has been deposited by revenues tariffs imposed by India, the major importer of both products.

Dependency roots

North Dakota farmers have not previously relied so much on a single top buyer. But with wheat profits decreasing and Chinese demand for soy growth, soybeans appeared to be the obvious choice.

Companies including BNSF Berkshire Hathaway expanded rail capacity to open the West Coast navigation corridor, while the North Western ports expanded the Pacific to handle more exports to China. New varieties of varieties were produced by North American seed companies that enabled soybeans to flourish in the colder state of the state and a shorter growing season.

$ 200 million was top two decades ago a $ 2 billion bar, at the top of the value of wheat, once the top tip of North Dakota.

The number of high-speed shuttle freight terminals in North Dakota rose threefold from about 20 in 2007 to more than 60 at present, according to industry data, with investments of at least $ 800 million.

But one of those facilities – Dakota Plains lift by CHS at South Dakota, about 30 km northwest of Colfax – has gone three or four months without loading soybean this year, said Doug Lingen, a grain merchant there. The lift would normally load at least one train per month and beans connected to the Northwest Pacific.

Meeting together

Soybean prices are falling in demand in North Dakota trading at a historic discount on US futures prices, and farmers are holding investments.

Justin Sherlock, who grows corn, soybeans and other crops near Dazey, was about 140 km northwest of Fargo, planning to buy grain drier this year for about $ 100,000- $ 150,000, thus giving new one at least $ 350,000.

But these plans have now been set aside in an uncertain future, even with the latest commitment to government assistance. According to published rates last month, farmers in Sherlock county can apply for aid of $ 55 per acre, well below the $ 150 maximum rate offered in 22 counties across the country.

Sherlock asked for the latest “disappointment” announcement.

“I'm going to put all my investment back,” he said, “and try to limp it for a few years.”

– Karl Plume reports on agriculture and commodities for Reuters from Chicago.

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