China-US Trade Tensions: Tariffs and falling prices a double whammy for American soybean farmers

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03:14

A 12-billion US dollar emergency fund will soon become available to US farmers caught up in the trade conflict. Soybean farmers in particular are hurting not only because tariffs have made their products more expensive, but also because prices have plummeted. CGTN's Hendrik Sybrandy reports from the state of Louisiana.

"There's the pod. That's a bean." George LaCour grows soybeans and other crops northwest of New Orleans. He got his agricultural gene from his father.

GEORGE LACOUR SOYBEAN FARMER "He'd died if he'd known I was farming this much and borrowing this much money. He probably wouldn't have given me a loan. I know him."

In a business known for its up and downs, times are tough at the moment, he says.

GEORGE LACOUR SOYBEAN FARMER "It's tight. It's tight. It's tough to make ends meet right now."

Several hours north, Jason Condrey is facing a similar situation. China's 25 percent tariff on soybeans in retaliation for U.S. tariffs has thrown a serious wrinkle into his family's farming operation.

JASON CONDREY SOYBEAN FARMER "It's scary, it's scary for us right now. Our margins are so thin it's unbelievable."

What's driving the unease?

HENDRIK SYBRANDY BATCHELOR, LOUISIANA "Soybeans were once a relatively small part of Louisiana's economy but as China's appetite for protein has increased, its demand for soy has sped up as well."

Sixty percent of US soybeans are exported. More than half of those exports go to China, to make animal feed and cooking oil 14 billion dollars' worth each year, according to the American Soybean Association. The tariff has made LaCour's beans more expensive. His prime customer is looking elsewhere.

GEORGE LACOUR SOYBEAN FARMER "The Chinese was an 800 pound gorilla and they still are. They're just sourcing out of Brazil."

The tariff has also helped push down the price of soybeans significantly.

GEORGE LACOUR SOYBEAN FARMER "Two dollars a bushel, real simple."

Leaving him, he says, in the red.

JASON CONDREY SOYBEAN FARMER "We don't have a stockpile back there of money to ride this out, that's the scariest part of it."

Condrey says several years of low crop prices have left him without much of a cushion although this year's strong yield has helped. In fact, the soybean tariff has benefitted some businesses in the short-term.

EDDY HAYES TRADE LAWYER "The export volumes going have been significant, particularly in soy and other agricultural areas. I think that they've had a lot of orders placed overseas in anticipation of this."

LaCour believes the time for trade talks is overdue. He'd like to see China open up its agricultural markets.

GEORGE LACOUR SOYBEAN FARMER "It's time to let us sell the Chinese people some product. More so than just soybeans."

JASON CONDREY SOYBEAN FARMER "It's not a fair trade balance, it's really not. So this needs to happen. The timing of it is just wrong."

The wave of tariffs come after his crop has already been marketed, right before the harvest. The goal now is to find new places to send these soybeans. The hope on these farms is that a resolution to the world's trade disputes comes soon.

JASON CONDREY SOYBEAN FARMER "I have faith that it will. I hope it will. I hope we're not dealing with these same issues going into next growing season."

GEORGE LACOUR SOYBEAN FARMER "It's the U.S. farmer that's going to pay the price. Let's negotiate, come to a fair deal and get back to the business of growing economies and feeding the people of the world."

Hendrik Sybrandy, CGTN, Batchelor, Louisiana.