Soybean prices free fall as tariff war heats up with China, other countries
LITTLE ROCK, ARK. (TALK BUSINESS & POLITICS)- Soybean prices have plummeted this year, and the price is approaching a threshold that could make the agri product unprofitable for some farmers, according to University of Arkansas agriculture economist Bob Stark.
Soybeans traded at $8.53 per bushel on Monday, a nearly $1.20 drop from contract prices in mid-November through the end of December 2017, Stark told Talk Business & Politics. If prices drop below $8 per bushel, it’s a psychological and financial barrier that could send soybean producers reeling, but Stark isn’t predicting that to happen.
Prices were as high as $10.50 per bushel this year, but began dropping when President Donald Trump announced billions in tariffs on Chinese goods starting in March, and China announced reciprocal tariffs on many goods including soybeans. This time of year farmers are mostly concerned with the weather, but now many are monitoring the politics of the moment and the markets, Stark said.
“A lot of this volatility is based on concerns and expectations,” he said. “It’s certainly a concern for our growers.”
The trade wars that could result from tariffs against China and other countries are likely to hit the agriculture sector, and especially Arkansas where ag is the dominant sector. Arkansas manufacturers, farmers and consumers will receive a $339 million hit from retaliatory tariffs, with the biggest blow from $225 million in Arkansas goods targeted by Canada in response to the Trump’s administration announcement in June that will impose tariffs on steel and aluminum exports from Canada, Mexico and the EU, according to the U.S. Chamber of Commerce.