Farmers are entering their 5th year of low crop prices and now soybeans have reached a 10-year low, in part due to Chinese tariffs. Economists say this could be a pivotal year for farmers in Illinois and across the country.
Farmers have been able to manage low prices because of unusually high soybean yields, but projections suggest those are returning to average. On top of that, the tradewar with China, the world’s largest buyer of American soybeans, is causing problems. The United States imposed a 25% tariff on some Chinese goods, and China responded with an equal tariff on American goods, including soybeans.
As of Thursday, the price of a bushel of soybeans fell to $8.42, which is the lowest price seen since October of 2007.
Mike Doherty, a senior economist with the Illinois Farm Bureau said all of this could spell bad news for American farmers.
“In two words: not good," said Doherty. "I think it’s going to be a real struggle for a lot of our farmers this year. We didn’t have that much room to maneuver in terms of net farm income. I expect this to be a tipping point for some number of the farmers and we just don’t know which ones yet.”
There’s been a slight uptick in the number of bankruptcy filings by family farmers and Doherty says that could increase this fall.
Though Doherty said this is likely the lowest beans will fall because of the tariffs, there are other issues on the horizon.
“We’re probably at or near the bottom as far as the total impact of these tariffs," said Doherty. "However, there’s other bad news around the corner, which is the huge Brazilian soybean crop which may break all previous records for Brazil.”
Doherty said because of a trucking dispute, Brazil held up the shipment of soybeans, which means a lot of Brazilian beans will soon be coming back onto the market competing with U.S. farmers.