KUNM

Soybean Farmers Worry About Tariffs' Impact

Sep 19, 2018
Originally published on September 19, 2018 8:53 am
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The trade war between the U.S. and China has been tough on soybean farmers here in the U.S. For many of them, China is their biggest market. NPR's Jim Zarroli has been visiting with a farm family in North Dakota.

JIM ZARROLI, BYLINE: It's a drizzly afternoon in the town of Hillsboro. Because of the rain, the Lovas family has had to quit harvesting their crops for the day. Sitting in the backseat of his pickup in baggy jeans and suspenders, 72-year-old Peter Lovas looks out over the ripening fields of soybeans. They stretch all the way to the horizon.

PETER LOVAS: We love raising soybeans. But if this scenario stays on, we've got to cut production way, way off and try to figure out what to replace it with.

ZARROLI: As he heads back to his farm's office, Lovas says he's been planting soybeans for 20 years. They cover half of the family's 8,000 acres. That wasn't always the case. For a long time, the family planted wheat and sugar beets, but the '80s and early '90s were hard years. There was too much rain and disease, and the crops often failed.

P. LOVAS: You'd be surprised the decisions you can make when you're hungry. When things don't work - we went through 20 years of wet stuff. We lost our sugar beets. We were razing. We were burning our wheat crops.

ZARROLI: So in the mid-'90s, like a lot of North Dakota farmers, Lovas turned to soybeans. They handled the rain well, and they could be sold quickly. And there was a big new market opening up. Asia was eager to buy American soybeans. Lovas says trade delegations from China came to visit his farm.

P. LOVAS: There's guys that come buy millions of tons. You know, they're just plain old Joes asking good questions, and you can hear the wheels turning. They want to see what a crop looks like. It's been a joy. It really is. It's really fun.

ZARROLI: The soybean trade really exploded in the late '90s after the Alton Grain Terminal was built across the road. The terminal towers over the prairie along a railroad track. Farmers come here every day to sell their crops. They're weighed and sorted and loaded on to 110-car trains. Then they're transported to the Pacific Northwest and put on freighters bound for Asia. But the terminal's grain manager, Cory Tryan, says soybean orders from China have stopped coming in.

CORY TRYAN: It's just dead, and harvest hasn't really started yet.

ZARROLI: Earlier this year, the Trump administration imposed tariffs on billions of dollars' worth of Chinese imports. Beijing hit back hard. Since then, the cash price of soybeans has fallen by as much as a third. Even worse, orders from Asia have dried up. Back at the Lovas Farms office, Peter's daughter-in-law Sarah stares at her computer screen.

SARAH LOVAS: As a matter of fact, I just did some quick calculations this morning. If we were to sell our entire 40-bushel crop, which is an average crop for us here, we would lose about $243,000.

ZARROLI: A few feet away, Peter Lovas leans back in his chair and folds his arms.

P. LOVAS: You don't have to worry about paying income tax, I'll tell you that (laughter). You figure it out from there. There ain't no income tax going out of this farm.

ZARROLI: The government has promised money to help farmers survive the trade war. But Peter Lovas isn't too impressed. He says most farmers will just use the money to pay off their loans, so it'll end up going to the banks. Sarah Lovas says she's grateful for any help they can get. But she notes that the Lovases have been farming this land for four generations.

S. LOVAS: We don't do anything around here for short term. We do it for long term. And it's taken a long time to develop some of these relationships that we've had. I hope we can continue to develop those relationships again into the future.

ZARROLI: Right now, the Lovases are focused on this year's harvest. They don't want to sell their soybeans at a loss unless they have to. So they'll end up storing them in hopes that the trade war blows over and the price comes back - whenever that may be.

Jim Zarroli, NPR News.

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