Kirk Merritt, executive director of the Ohio Soybean Association (OSA), speaks during an interview in Ohio, the United States, Aug. 21, 2018. (Xinhua/Li Feihu)
by Xinhua writers Yang Shilong, Li Feihu, Chang Yuan
WORTHINGTON, the United States, Sept. 4 (Xinhua) -- As the harvest season in the U.S. midwestern state of Ohio is approaching, soybean farmers are sitting on pins and needles due to the ongoing tariff battle between the United States and its major trading partners.
"We hope that the tariffs are not in place when the current crop is harvested, as we said, starting in a month. Longer-term tariffs would be very harmful to the profitability of Ohio soybean farmers," said Kirk Merritt, executive director of the Ohio Soybean Association (OSA), in a recent interview with Xinhua.
The U.S. administration under President Donald Trump has levied tariffs on a host of products from around the world, and countries like China, India, Mexico and Canada have responded by slapping their own taxes on imports from the United States, especially on its breadbasket.
LONG-TERM TARIFFS HARMFUL
"I think if the tariffs continue longer-term, it would be very harmful to Ohio soybean farmers and American soybean farmers," Merritt said at the OSA's headquarters in Worthington, 17 km south of Columbus, the state capital of Ohio.
Independent research shows "significant reductions in long-term profitability" for soybean farmers if the tariffs are "in place for several years," Merritt said.
The estimated annual economic impact of the Ohio soybean industry on the Ohio economy exceeds 5.25 billion U.S. dollars, according to the OSA.
Ohio was the seventh-largest soybean-producing state in 2017. The state's soybean farmers planted 5 million acres of soybeans last year and exported 1.8 billion dollars' worth of the crop. China bought more than 691 million dollars' worth of soybeans from Ohio in 2017.
"China has been for many years our largest export market, for Ohio, and for the United States," Merritt said. "So our farmers understand the importance (of the international markets)."
The farmers are already feeling the squeeze. The soybean price decreased by approximately two dollars per bushel, which is about 20 percent, since China imposed retaliatory tariffs on U.S. soybeans in July.
"We have heard estimates of potential financial harm for crops that they are holding but not yet sold based on the drop in the price, of anywhere from 25,000 or 200,000 (dollars) for an individual farmer. It is a significant amount for farmers," said Merritt.
The numbers are devastating for farmers who operate with high overhead and slim profit margins in the best of times.
The break even on soybeans right now is approximately 9.50 dollars per bushel though it would vary very widely from one farm to the other, according to an analysis by researchers at Ohio State University.
"Prices currently are below break even. Most farmers are selling at 8.20 or 8.50 dollars' range on those specific beans. They would not make much," Merritt said.
"If it is not resolved in the next year, two years, three years, (it) will have a very adverse effect on their bottom line, will make them less profitable," he added.
MARKET HARD TO BUILD
Fred Yoder is a fourth-generation farmer from Plain City, 24 km away from Worthington. Yoder and his family farm around 1,500 acres of corn and soybeans. He also owns and operates his own retail farm seed business.
Farmers come to him for help because he served as president of the National Corn Growers Association and has become an advocate not only for Ohio's agriculture industry, but the United States' as well.
The tariffs have already given farmers in Ohio and the Midwest a "very tough time," said the farmer, who has been involved in the agri-business for over 40 years.
"I've lost 100,000 dollars just from what I haven't got sold (in the futures market)," Yoder said.
As the harvest season is approaching, the situation is becoming "very worrisome" because most farmers have to borrow funds to put the crop out by buying the inputs, e.g. the seeds, the fertilizers and the crop protection products, he said.
The possible loss of the Chinese market will greatly hurt Ohio and the U.S. soybean industry as no one market can replace the world's largest middle-class market, said Yoder, who had recently returned from a two-week trade mission to China.
Agricultural experts warn when the farmers' income goes down, the ripple effects will penetrate Ohio's and the U.S. economy -- car dealers, grocery owners and bankers are going to feel the pinch.
"Our production will continue to increase in the coming years. So we will need new markets. In short-term, we certainly can sell more to Europe. We can sell more to Mexico, the Philippines, Indonesia ... But in longer-term, it won't make up for the market in China," Merritt said.
After all, he said, it took American farmers over 35 years to build a market in China and they do not want to pass it over easily to their competitors like Brazil and Canada.
TRADE, NOT AID
There is little wonder that Ohio's elected officials and lawmakers are also beginning to sound the alarm.
Republican Senators Rob Portman of Ohio and Joni Ernst of Iowa have teamed up with Alabama Democrat Doug Jones to introduce legislation that would clip the wings of the president's unilateral tariff powers.
"These are policies that are harming the economic interest of Americans who are important, most particularly the farmers," Ohio Governor John Kasich said.
"For farmers, farmers don't want welfare, they want trade. They want to be able to sell their stuff," said Kasich, referring to the Trump administration's announcement of a 12-billion-dollar plan to compensate farmers hurt by the trade battles.
Furthermore, the aid actually "stifles the ability for farmers to be competitive amongst each other," said Matt Dolan, an Ohio state senator.
"Tariffs don't necessarily hit the government. They hit individuals and corporations," Dolan added.
"There's no way we're going to ever survive without trade. U.S. agriculture can not survive without international trade, and China was our biggest trade partner and it's going to be very difficult to replace the business we are doing with China," said Yoder.
"We hope that the current situation will be resolved in a mutually beneficial way as well, that in a longer-term we will be able to continue that win-win partnership (with China)," Merritt said.
(Xinhua reporters Xu Jing, Miao Zhuang and Wang Ying also contributed to the story.)
(Video editors: Liu Xiaorui, Zhu Jianhui)
