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Crops doing well, but China tariffs loom large

Ohio farmers brace for lower prices

First Posted: 9:46 am - July 12th, 2018 - Views

By Sam Shriver - sshriver@limanews.com



Long-time Auglaize County farmer Nick Heitz is concerned over crop prices as China is set to enact 25-percent tariffs on U.S. crops exported to China.
Sam Shriver | The Lima News
Soybean farmers in Ohio stand to lose the most if the China tariffs are enacted.
Sam Shriver | The Lima News
Despite ideal growing conditions, Nick Heitz, an Auglaize County farmer, is worried that prices may be lower than expected, especially for soybeans.
Sam Shriver | The Lima News
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WAPAKONETA — Auglaize County Farmer Nick Heitz is a gambler. He gambles on the weather and he also gambles on whether international trade decisions might adversely affect commodity prices.

Heitz has been in farming his whole life.

“I grew up on a farm, so I probably got 47 years in,” said Heitz.

He’s 52 now and was anticipating a pretty decent crop this year.

“My corn is the best looking that I’ve ever had, and my soybeans, some of them are good, some of them are starting to struggle with all of this rain we’re getting,” he said.

Driving up onto his property on Buckland-Holden Road, one can hear the whir of the fans, drying some of the 225 acres of wheat he’s starting to harvest. He plans to plant soybeans after the wheat comes off in an effort to add to what he planted earlier in the spring. All totaled, he’s got 1,264 acres of beans either in the ground or nearly ready to be planted.

He’s already watching his 1,290 acres of corn grow spectacularly.

That’s the good news. Now the bad.

On July 6, China is expected to enforce a 25 percent tariff on many goods exported from the U.S. to China, including soybeans. That move is in retaliation for the Trump administration’s tariffs on goods made in China and shipped to the U.S.

Just the threat of tariffs on soybeans has already caused prices to drop dramatically.

“We’re already seeing a decline in soybean prices, which is not what we really needed to get at this point in crop production and preparation for selling of the crop. If they haven’t already contracted it forward, the threat of tariffs is having a depressing action on the price of soybeans, and soybean was going to be the main cash crop for this year for many people,” said Curtis Young with the Van Wert County OSU Extension office.

Heitz hasn’t been watching the situation very closely, but sooner rather than later, it will affect what he can earn this year.

“I’m not surprised. The market goes up and down, and some organizations of farmers have always wanted the trade globally with China and everybody because they think that’s all great. It is, but it’s all proportional. If prices go up, then everything goes up with it. In the past, China has come to the table and bought grain. The price goes up for soybeans, then they cancel the order and it goes down quite a bit. Then they buy it back real cheap, a lot cheaper, and as a farmer, I don’t like that, and that’s why I could care less about wasting time trading with these countries that do that,” said Heitz. “If they go to Brazil and buy [soybeans], Brazil might not be able to physically sell all of the soybeans and either they come around in the dark of the night and get them from the United States and resell them or something, so I guess the market’s going to do what the market does. I’m not happy the prices are down, but it doesn’t surprise me.”

Ohio farmers stand to lose if tariffs go into effect

According to a news release from the Ohio State Extension Service, an Ohio farmer could lose more than half of his or her annual net income if the threatened 25 percent tariff is imposed on U.S. soybeans and corn in China.

Researchers with the OSU College of Food, Agricultural, and Environmental Sciences (CFAES) have projected a 59 percent loss in annual net farm income based on historical trends in yields on corn and soybeans and projections for price drops in both commodities.

Across Ohio, the loss of soybean exports to China would be an estimated $241 million loss annually.

The study is the first to show the financial impact a 25 percent tariff on China’s imports of U.S. soybeans and corn could have on an Ohio farmer and on the entire state.

“There are farmers who are struggling across the state,” said Ben Brown, manager of CFAES’s farm management program. “If the proposed tariffs go into effect, we’re going to have farmers who will have to exit the industry.”

The financial losses stem from an expected drop in Chinese demand for U.S. soybeans and corn and in the world price for both crops.

“The biggest impact will be on profits from soybeans. However, corn is affected too,” Brown said.

Soybeans are Ohio’s largest crop and the state’s top agricultural export.

The losses from soybean sales are projected to be far greater than for corn. Every year, 31 percent of the soybeans and 2 percent of the corn Ohio produces are exported to China.

China is the largest buyer of soybeans in the world, and Brazil is its top supplier, with the United States being second. If China imposes the threatened 25 percent tariff on U.S. soybeans that will drive up the price that Chinese companies have to pay for U.S. soybeans and encourage them to buy even more soybeans from Brazil, Brown said.

Crops around the area are doing pretty good

Auglaize County

A check of area counties indicates that much of what is planted is doing pretty well, and that should help farmers at harvest with more bushels produced per acre.

“The corn crop is good to excellent throughout Auglaize County. We’re very fortunate to have the probably 80 to 85 percent of the corn crop in that category. With the rains last week, we went backward a little bit with the corn, but not very much. So we’re in really good shape with corn right now. Soybeans, on the other hand, they’ve struggled a little bit all along. I only rated two weeks soybeans to be only 70 to 75 good to excellent, so we’re a little less than corn and now with the rain last week, there’s soybeans, especially in the northern tier of Auglaize County that has gone backward really bad. My guess is we probably lost 10 to 20 percent that was good to excellent, jumping down into the fair to poor categories,” said Jeff Stachler, Auglaize County OSU Extension Educator for Ag and Natural Resources.

Putnam County

“Actually, in our county, everything is doing really well. We’ve had a really good year. We’ve gotten rain just when we have needed it. We used to always say ‘knee high by the fourth of July’ for corn, and it’s twice that tall now,” said Beth Scheckelhoff with the Putnam County OSU Extension.

Rain has not been as much of a factor in Putnam County as it has in other counties.

“Some fields, especially with the low-lying areas where the water has ponded, that kind of stresses the plants out so we do have some issues there but it’s very spotty for the most part,” she added.

Hardin County

Hardin County crops appear to be doing as good as Auglaize County’s, at this point.

“We’ve had a really good growing season this year. Haven’t heard any complaints. We got a late start, probably two weeks later than farmers would have liked to be in the fields, but once they did get started, the weather cooperated this year. Everybody seemed to get things planted on time, and we’ve had several different rains, which have helped along the way to keep the crops in good condition. We did get hit really hard this past weekend, getting up to 4 and 1/2 inches in the county according to some of our rainfall reporters,” said Mark Badertscher with the Hardin County OSU Extension office.

“The big problem with the late season rains is going to be that if it rains and then it dries and it gets hit again by rain when we’re close to [wheat] harvest, then you worry about sprouting the wheat seed and you also worry about the wheat grain itself. When it gets wet and it dries it starts to shrink, and so that means our test weight per bushel would go down which would affect our overall yield as well as your grain quality,” said Badertscher.

Van Wert County

Up until about a week ago, things were looking very nice in terms of crop development and growth patterns. The corn is especially looking good in terms of how high it has gotten and looking nice and green. We will most definitely reach the eye high by the fourth of July in many of our fields. However, you can still drive around the county and see a few fields where they had some apparent drainage issues earlier in the season, and there are some that bit behind and some unevenness in growth patterns in some fields, especially towards the west of Van Wert County. The soybeans, they were coming along very well until we got all of this rain. There are at least, in patches in some fields where the amount of water that stood over top of the beans and the continuous wetness of the soil is going to result in the development of disease and death of plants. In a few cases, it’s the entire field that is not looking good at all but in most of our soybean fields, there are definitely going to be holes and patches where drainage was either backed up or they were just poorly drained areas of the field to begin with,” said Young.

As for wheat, crops were ready to harvest before the rains hit. “Unfortunately, as wet as the fields are with all of that rain that’s come through, it may be a delay in getting into those fields to be able to harvest the wheat,” Young added.

Long-time Auglaize County farmer Nick Heitz is concerned over crop prices as China is set to enact 25-percent tariffs on U.S. crops exported to China.
http://www.rurallifetoday.com/wp-content/uploads/sites/56/2018/07/web1_Crops-1-toned.jpgLong-time Auglaize County farmer Nick Heitz is concerned over crop prices as China is set to enact 25-percent tariffs on U.S. crops exported to China. Sam Shriver | The Lima News

Soybean farmers in Ohio stand to lose the most if the China tariffs are enacted.
http://www.rurallifetoday.com/wp-content/uploads/sites/56/2018/07/web1_Crops-2-toned.jpgSoybean farmers in Ohio stand to lose the most if the China tariffs are enacted. Sam Shriver | The Lima News

Despite ideal growing conditions, Nick Heitz, an Auglaize County farmer, is worried that prices may be lower than expected, especially for soybeans.
http://www.rurallifetoday.com/wp-content/uploads/sites/56/2018/07/web1_Crops-3-toned.jpgDespite ideal growing conditions, Nick Heitz, an Auglaize County farmer, is worried that prices may be lower than expected, especially for soybeans. Sam Shriver | The Lima News
Ohio farmers brace for lower prices

By Sam Shriver

sshriver@limanews.com

Reach Sam Shriver at 567-242-0409.

Rural Life Today

Reach Sam Shriver at 567-242-0409.