The ongoing trade cold war between the United States and China has been impacting many businesses and microeconomics on both sides of the fence. The latest victim to be buffeted by the trade war’s hail is the US soybean industry.
One of the world’s largest consumers of American-grown soybeans is China. Because of the constant tariffs, however, soybeans can’t get through, at least not without a debilitating amount of red tape. Instead of going through the bureaucracy required to get US soybeans, China has abandoned the crop almost entirely, instead beginning to import soybeans from an up-and-comer in the market, Brazil. With nearly all of their business going to Brazil, American soybean farmers have seen imports of their crops falling nearly 90%. These farmers have more beans than they know what to do with. They can’t sell them, so all they can do is find places to store them (which is proving to be a little nightmare in itself) and hope they don’t go bad before they can find a buyer. Due to this oversaturation, American soybean prices have also dropped $2 per bushel compared to the beginning of the year.
If the trade war is not resolved soon, China may establish permanent soy business with Brazil, and US soy farmers will be up the creek.
