Since President Donald Trump first placed tariffs on Chinese goods in February, the trade war between China and the U.S. has continued to escalate. American soybeans have been one of the goods targeted by Chinese retaliatory tariffs. Exports now face a nearly 115% effective tariff rate, according to the American Soybean Association.
The association’s president, Caleb Ragland, said in a press release last week that the escalating tariffs are not only a threat to this year's growing season, but to the industry long term.
“The short-term disruptions are painful, but the long-term repercussions to our reputation, our reliability as a supplier, and the stability of those trading relationships are hard to even put into words," Ragland said in the statement.
China is central not only to the U.S. soybean industry, but the world soybean market, according to Bernt Nelson, economist for the American Farm Bureau Federation. He said China buys 64% of all world trade, leaving few alternative buyers for the crop.
"We cannot talk about soybeans without thinking about China," Nelson said.
Some farmers pivot to corn
By comparison, U.S. corn has more international buyers and is less dependent on exports in general. Kevin Bernhardt, agribusiness professor at the University of Wisconsin-Platteville, said that makes corn less vulnerable in the escalating trade war.
Corn prices have also been on the rise in recent months. But Bernhardt cautions that doesn’t mean switching crops is a sure path to profits for farmers.
“Neither [crop has] prices that put people into profitable positions at this point,” he said. “But I think the short term guess is that soybeans potentially are going to fall further because of that export picture, and perhaps corn is the safer bet.”
American farmers intend to plant 4.7 million, or 5%, more acres of corn than they did in 2024, according to federal data. If realized, this year's forecast would put corn acres just ahead of 2023 levels.
Farmers in southeastern Iowa started planning the shift to more corn acres this winter, according to Iowa State University Extension Regional Agronomist Rebecca Vittetoe. She heard from several producers who don't normally plant corn in back-to-back years but were looking to do so this spring.
"Some of that is just looking at our input costs, and then what we can get per bushel or what the markets are showing," Vittetoe said. "That shifted some people's thoughts a little bit. Maybe they would have had more of a 50-50 split with corn and soybeans. It might not be that perfect 50-50 split this upcoming season."
But some farmers say the shift away from soybeans has been years in the making. Pat Mullooly, a soybean and corn grower in Wisconsin's southeastern Rock County, traces it back to lost export demand from China during the last Trump administration’s 2018 trade war. He said South American countries stepped up to fill the demand.
“It’s hard to replace those markets and so that’s been compounded here in the last four or five years,” Mullooly said. “The soybean price has just been dwindling back on us, and inputs are up in the last few years, and it’s just hard to pencil in a profit to grow commodity soybeans, this year for sure.”
He said fertilizer prices increased significantly as part of economy-wide inflation coming out of the COVID-19 pandemic. But costs for the input have not come down with soybean prices. Farm equipment and replacement parts, much of which comes from Mexico, have also gotten more expensive.
While corn has also suffered from increased costs, Mullooly said genetic advancements have led to more predictable yields for the crop. He said the stability is attractive to farmers during a season with so much uncertainty.
But Mullooly said he's worried farmers could overreact.
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