Metro-East News

Trade dispute between U.S., China hurting farmers at home, grain company says

The ongoing trade dispute has led to fewer soybeans being sold to China, according to one company that moves soybeans through many facilities in the U.S., including one in the metro-east.

Cargill, which has an elevator facility on the East St. Louis riverfront, said ongoing trade conflicts between China and the U.S. could lead to job losses back home.

The company said it has seen a slowdown in the movement of soybeans grown by U.S. farmers.

“The economic turmoil and uncertainties resulting from tariffs are harming U.S. farmers, as trade concerns have played a major role in this price drop,” according to a statement from Cargill.

Cargill, along with Bunge SCF, helped pay for a recent road improvement on Front Street in East St. Louis, as they each have grain facilities along the Mississippi River. During peak harvest times, the companies anticipate 800 to 1,000 trucks a day to use the road to deliver grain, Cargill said. The project was part of the Ag Coast of America marketing initiative being pushed by Freightway District, among others.

Bunge SCF declined to comment for this story.

Cargill said farmers, however, are holding back their soybean supplies and storing them because of a drop in futures prices.

“In our view, tariffs hurt trade and damage the U.S.’ ability to compete in the global economy. We must maintain market access for American goods and services through a rules-based trading system,” Cargill said in a statement. “We urge both countries to reach a negotiated solution, such as a responsible trade agreement, so everyone can compete on an even playing field.”

Chinese tariffs on agricultural products, such as soybeans and hogs, went in place after the U.S. announced tariffs on foreign steel as well as the U.S. efforts to protect intellectual property rights.

“Soybeans are the top agriculture export for the United States, and China is the top market for purchasing those exports. A trade conflict between the U.S. and China will lead to serious consequences for economic growth, including the loss of sales and jobs here at home,” Cargill said in an email to the BND.

The company declined to discuss specific job numbers.

One farmer who intends to hold back his crop until the prices improve, or until he needs to make loan payment or pay his real estate taxes, is state Rep. Charlie Meier, R-Okawville.

Meier said after harvesting soybeans, he plans to hold onto his crop that has not been already contracted to a buyer, until the price goes back up.

“Everything else will be stored. We hope that the tariff war, or tariff battle, I don’t know if I should call it a war, I hope it is a short battle,” Meier said.

Meier, who usually sells his product domestically, has the ability to store about three-fourths of his corn crop and about 90 percent of his soybean crop; the margins for farmers are tight as the cost of production increases and income decreases, he said.

“Most farmers have production loans to get the crop planted and get it out there,” Meier said. “And you harvest it, and sell the crop and pay off the production loan, pay off your taxes, your real estate taxes, make payments on any equipment you have to make and keep enough money to make your payments all year long.”

He said every farmer has payments structured differently.

“There’s payments having to be made, and at some point in time, if the price doesn’t go up you’re going to have to sell that crop to make that payment,” Meier said. “The American farmers’ income level has been falling the last few years.”

He points out that the U.S. imports more from foreign countries than it exports.

Retaliatory tariffs from China went into place after the U.S. placed a tariff on foreign steel, as well as tariffs meant to protect U.S. intellectual property.

U.S. Steel started bringing back jobs to its Granite City steel mill after the tariffs on foreign steel were announced.

The Trump administration recently announced a $12 billion aid package for farmers affected by the retaliatory tariffs, and the administration recently announced a deal with Mexico as it renegotiates the North American Free Trade Agreement.

Trump administration officials said it would help open up Mexico to U.S. agricultural products.

American Soybean Association called the progress between the U.S. and Mexico on revising NAFTA promising.

“We need NAFTA and new free trade agreements to build and ensure the certainty of our markets for soy and livestock product exports,” American Soybean Association (ASA) President John Heisdorffer. “Approval of NAFTA would be a big step in the right direction for us, with the uncertainty and market loss resulting from China’s tariff on U.S. soybeans. We are hopeful that a new NAFTA agreement will set the tone for more trade agreements to come.”

U.S. Rep. Mike Bost has been supportive of steel tariffs and has said he would work with farmers to find places for them to export their goods.

“The United States has been taken to the woodshed for years by unfair and illegal trade practices by China and others, and the administration is right to try and level the playing field,” Bost said. “Unfortunately, rather than pursue balanced trade deals, China has responded by punishing our agricultural producers through unjustified retaliatory tariffs. I will continue working with our farmers and ranchers to create new markets for the food, fuel and fiber they produce.”

U.S. Sen. Tammy Duckworth criticized the tariff approach taken by President Trump.

“This is a one step forward, two steps back approach the president is taking,” Duckworth said. “No one is more thrilled that Granite City Steel has opened back up than I am and all those wonderful workers and families are now back on the job. Unfortunately, what he’s done is he has now hurt our farmers. There are these huge tariffs that our trading partners have put on corn and soybeans and everything else. And that’s a real problem.”

As for the Front Street improvement project, as well as an accompanying roundabout by the Casino Queen and other area road improvements, U.S. Sen. Dick Durbin said he believes the road will get used.

“It will get used, but there is an interruption with this trade war, and the farmers are the first causalities of this trade war, and they depend so much of what they grow being sold overseas,” Durbin said.

The $7.6 million project did open up more land on the East St. Louis riverfront for redevelopment. It was carried out to separate truck traffic going to Cargill and Bunge SCF facilities, away from traffic going to the Casino Queen.

“We consider this ... project to also be a gateway, a gateway to economic expansion,” St. Clair County Board Chairman Mark Kern said. “It has resulted in the creation of a modern infrastructure that will provide Missouri, Illinois and surrounding states immediate and efficient access to national and international grain markets.”

There also was funding from the U.S. Economic Development Administration, Illinois Department of Transportation, Southwestern Illinois Development Authority, St. Clair County Transit District, and Metro East Parks and Recreation District.

Joseph Bustos: 618-239-2451, @JoeBReporter
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