As US-China Relations Cool, Iowa Farmers Hope History With Chinese Preserves Trade
Rising tariffs mean falling demand and plunging prices for Iowa soybeans
MUSCATINE AND DES MOINES, IOWA — The trade war between Washington and Beijing is hurting farmers who grow huge amounts of soybeans in Iowa for export to the massive Chinese market. Farmers in Iowa hope that the strong commercial and close personal relationships that China and the U.S. farm state have nurtured for many years will help the two sides overcome complications like the record U.S. trade deficit with China. Chinese President Xi Jinping has visited Iowa farmers repeatedly over the past couple of decades and former Iowa governor Terry Branstad is now the U.S. ambassador to Beijing. The close ties have been strained by Washington’s allegations that China unfairly manipulates markets, steals American intellectual property, and creates bureaucratic obstacles to trade. China also accuses the United States of unfair practices. The United States imposed tariffs on Chinese exports, and Beijing retaliated with tariffs on American agricultural products. That meant that Iowa soybeans were more expensive and less competitive on global markets. Demand for U.S. soybeans — and prices paid to U.S. farmers — plunged $85 a metric ton. An Iowa farmer who manages several farms, including 153 hectares of soybeans, says his profits fell 100 percent for 2018. David Miller is not happy to lose money but says without the tariffs, China would not pay any attention to the talks. China really needs what Iowa produces, according to Grant Kimberley, the marketing manager for the Iowa Soybean Association, who has been to China more than 20 times. “China needs soybeans ... because their middle class has grown, and that means they are eating more protein in their diet, more meat, and if you have more meat production, you have to have more soybeans to feed those animals,” he said. Kimberley’s family runs a 600 hectare farm, 48 kilometers from Des Moines, which was one of the places visited by Xi, who saw that it uses more advanced equipment and technology than is available to Chinese farmers. The former director of Iowa’s department of natural resources, Roger Lande, and his wife, Sarah, have twice hosted Xi, at their home in the small town of Muscatine. Roger Lande says sometimes China does things “we don’t like,” but all relationships, with family, friends and business associates, have ups and downs. Kimberley is optimistic things will work out. “Because that’s a long-standing relationship that’s been in place for 35 years,” he said. And “I think the overall underlying support and the people that are involved between the states and the province is still strong. And, and everybody recognizes that, over the long term, eventually this will get resolved,” he added. Nevertheless, some farmers and U.S. experts worry that a lengthy dispute could mean American farmers permanently lose much of this crucial market. As tariffs raised the cost of U.S. soybeans, Chinese pork producers have bought more beans from Brazil and other nations. In the future, they might also encourage Chinese farmers to boost production, or use more corn to feed their livestock.