Technology As soybean futures plunge, farmer says tariffs have 'devastated' the industry

04:35  11 august  2018
04:35  11 august  2018 Source:   cnbc.com

$12B bailout for U.S. soybean growers will come at Canada's expense, says Dresden farmer

  $12B bailout for U.S. soybean growers will come at Canada's expense, says Dresden farmer The U.S. government recently announced a $12 billion plan to assist farmers who have impacted by the trade dispute — something Phillip Shaw, an agricultural economist and Chatham-Kent soybean farmer, said is problematic for soybean farmers in southwestern Ontario. In early July, China placed a 25 per cent tariff on American soybeans — after the U.S. hiked tariffs on $34 billion worth of Chinese imports. Since then, farmers in Ontario have watched the global price of soybeans fall steadily. By mid-July, reports put the price of a bushel of soybeans down about $2 U.S.

The possibility of a record soybean harvest will only add to the woes of an industry already " devastated " by escalating trade tensions between the United States and China, Ohio soybean farmer Chris Gibbs told CNBC on Friday.

Related: A massive US farming industry fears China trade trouble. Tariffs would cause Bible to re-evaluate his planting strategy and Chinese tariffs "will have a devastating effect on every soybean farmer in America," American Soybean Association President John Heisdorffer said in a statement.

  As soybean futures plunge, farmer says tariffs have 'devastated' the industry © Provided by CNBC
  • The possibility of a record soybean harvest will only add to the woes of an industry already "devastated" by escalating U.S.-China trade tensions, says farmer Chris Gibbs.
  • Soybean futures plunging on Friday after a USDA report about the possibility of a large soybean harvest.
  • Gibbs says the agriculture community's fear with the trade war is that the U.S. will be seen as an unreliable supplier.

The possibility of a record soybean harvest will only add to the woes of an industry already "devastated" by escalating trade tensions between the United States and China, Ohio soybean farmer Chris Gibbs told CNBC on Friday.

Dow set to sink at the open as politics, trade woes keep investors on edge

  Dow set to sink at the open as politics, trade woes keep investors on edge U.S. stock index futures fell deep into the red ahead of Friday’s open, following negative sentiment in markets overseas. Around 5:35 a.m. ET, Dow futures dropped 93 points, indicating a negative open of -93.23 points, with the S&P 500 and Nasdaq futures also pointing to a downbeat start to the day.During yesterday's trade, the Nasdaq Composite scored its longest winning streak in close to a year, boosted by positive trade out of tech stocks including Amazon and Apple. On Friday, however, red is striking markets across the board, as political woes and trade fears send jitters across global markets.

China’s February imports of U.S. sorghum plunged 24 percent from a year earlier, customs figures show. Soybean futures slid as much as 5 percent on Wednesday in response to China’s move. Illinois soybean farmer Lucas Strom said China’s tariffs confirmed his worst fears.

Soybean farmers , apple growers and auto workers are among the US workers bracing for fallout from a trade war between the United States and China. The US on Friday slapped tariffs on billion worth of Chinese imports to combat what is says are the country's unfair trade practices.

Earlier in the day, the U.S. Department of Agriculture predicted U.S. soybean production for the 2018-19 crop year would hit 4.586 billion bushels, topping market forecasts. The news sent soybean futures plunging on Friday, falling more than 4.5 percent. It was their worst day since the July low.

"The effect of the trade war has been very devastating on soybean farmers here. We've taken a 20 percent drop in price," Gibbs said on "Power Lunch."

"What we're seeing with market action today only exacerbates the fact that we have lost our No. 1 customer because of the trade wars."

The U.S. and China have been engaged in a tit-for-tat escalation of tariffs against one another. In July, President Donald Trump slapped 25 percent tariffs on $34 billion of Chinese imports. Beijing responded by imposing 25 percent duties on American exports, including soybeans.

Feds prepping response to any auto tariffs

  Feds prepping response to any auto tariffs OTTAWA - With threats of devastating U.S. tariffs hanging over the auto sector, Canada's economic development minister says Ottawa is considering every possible way it could respond if the Trump administration follows through on its warning. Navdeep Bains said Plan A is to continue encouraging the U.S. to back away from the tariff threat, which industry has warned would inflict significant damage on both countries' economies. But just in case they are applied, Bains said Ottawa is considering "every conceivable option.""We're taking nothing off the table at this stage," Bains said in an interview. "We're looking at every tool in our toolbox.

The Ministry of Commerce in Beijing said it will levy an additional 25% tariff on 106 U.S. products, including soybeans , automobiles, chemicals, aircraft, whisky and cigars. At the time of writing, the Dow Jones Industrial Average futures market was down 2.34%.

China’s planned retaliatory tariffs , which were unveiled in response to measures by the Trump administration, “will have a devastating effect on every soyabean farmer in America,” said John Heisdorffer, president of the American Soybean Association, which represents more than 300,000

In August, the U.S. Trade Representative's office released a finalized list of $16 billion worth of Chinese goods to be hit with tariffs, to take effect on Aug. 23. China responded by announcing a 25 percent charge on $16 billion worth of U.S. goods.

Trump has also threatened to impose broader tariffs on as much as $500 billion of Chinese goods.

Gibbs, who owns and operates 560 acres of farmland, said the agriculture community's fear is that its years of building up markets around the world could disappear overnight.

He pointed to history as a guide — specifically what happened in 1980, when then-President Jimmy Carter imposed a grain embargo on the Soviet Union after the country invaded Afghanistan. That resulted in other world markets looking for a different supplier since the U.S. was seen as unreliable, Gibbs said.

"This is the fear that we have out here in agriculture country, that we're going to become an unreliable supplier," he said.

— Reuters contributed to this report.

Canada to consider steel safeguard response to U.S. tariffs .
Canada said on Tuesday it will consider a safeguard action on seven steel products to protect domestic producers from imports since the United States imposed tariffs against its major trade partner in March. Finance Minister Bill Morneau said a 15-day consultation period will be used to look at the harm or threat of harm to seven steel categories, including steel plate, rebar, energy tubular product, hot rolled sheet, pre-painted steel, stainless steel wire and wire rod.

Source: http://ca.pressfrom.com/news/technology/-87480-as-soybean-futures-plunge-farmer-says-tariffs-have-devastated-the-industry/

—   Share news in the SOC. Networks

Topical videos:

This is interesting!