With all the talk of tariffs, and a possible trade war, many times one of the first casualties are against farm goods. Farmers across the nation have been watching the commodity markets, and recently they have plummeted. Iowa State University Grain Marketing Specialist, Chad Hart says the markets have seen some volatility, and he expects the markets to continue to fall.
“Agricultural products get brought into the mix quite quickly, and often times they tend to be the areas where the first real impacts are seen, and that’s definitely the case of what we have been seeing. Because, I’ll use soybeans as the example, because that’s probably the one where we have seen the largest movement even though no tariffs have actually gone in place yet, and you already watched futures prices over the course of the past two- three weeks drop by over a dollar-fifty a bushel, just on the threat of potential tariffs,” says Hart.
Within the last few years, China has been a big buyer of US soybeans, accounting for purchasing nearly one-third of all soybeans grown in the United States.
Hart says he hopes farmers were able to take advantage of the markets when there was a small price rally earlier this spring. He says he’s suggesting for farmers to stay with their original marketing plan.
“Now, given where prices have dropped, this is more of a time to sit here and think about o.k. when we do see some rallies, and through every spring and summertime we go through there’s always one or two rallies that occur out there. We need to be ready to jump on those when we can, in order to hopefully put in some additional price protection, and hopefully, too, we will see greater clarity and resolution on hopefully some of these trade disputes as we move closer to fall, so we can be more confident in making our marketing moves,” says Hart.
The Iowa State University Extension Grain Marketing Specialist says the downward trend is also occurring with the livestock markets, especially with hogs and pork.
“If anything, soybean producers are probably watching as to what
has happened to hogs. Just because, within the hog industry that’s an area
where we have already seen some tariffs put in place. And so, we did see
some significant downward movement over the past couple of months in the
markets because of those tariffs,” says Hart.
Hart says, luckily, the hog markets have had some time to figure out where some alternative markets are, and farmers have seen some recovery, especially in the near-term contracts. But, he says the price for hogs is still down far below where they were prior to when the tariff and trade war rhetoric had began. Hart fears there may be additional tariffs levied on the pork industry, especially since negotiations so far, have not resulted in any real progress. Iowa Republican Senator Joni Ernst has turned against the president saying the tariffs are nothing more than a tax on Midwest farmers.