Farmers are paying for soybean tariff

The decline in U.S. soybean prices is approaching the amount of the Chinese tariff. So the U.S. farmer is in effect paying for the Chinese soybean tariff.

But it doesn't stop there. Because of the resulting market decline, U.S. farmers are paying the tariff on all their soybeans sold, not just the portion destined for China. At the same time, Brazil and other soybean exporting countries are getting a price for soybeans higher than the Chicago Board of Trade.

The real net result if you think about it is U.S. farmers are being forced to indirectly subsidize the Brazilian farmers. The Brazilian farmers are responding by planting more this year and next year. U.S. farmers have invested many years and millions of dollars in developing this market. Once it's lost, it is very difficult to regain.

Ed Ulch

Solon