By Andi Anderson
A newly released study warns that U.S. corn and soybean farmers would face severe economic losses if a new trade war erupts. The study predicts that potential trade conflicts, particularly between the U.S. and China, could result in hundreds of millions of tons of lost exports for American farmers.
Brazil and Argentina, the study indicates, would take over much of the market share, possibly for decades.
The research looked specifically at a scenario where China retaliates against U.S. tariffs by imposing its own tariffs on corn, soybeans, and soybean products, similar to what occurred during the 2018 trade war. Historically, corn and soybeans are prime targets for such tariffs.
For Illinois farmers, these exports are vital. Approximately half of Illinois’s corn crop is shipped out of state, mainly to international markets. Jeff Scates, Chairman of the Illinois Corn Marketing Board, emphasized that Illinois farmers, as the country’s top exporters, would bear a significant burden.
He highlighted that corn and soybeans represent about one-quarter of U.S. agricultural export value, making them highly vulnerable in a trade war.
The study modeled multiple outcomes of a potential U.S.-China trade conflict and consistently found a sharp decline in U.S. exports to China. U.S. soybean exports could drop by 14 to 16 million metric tons annually, a decline of more than 50%. Corn exports to China might also fall by 84%, or around 2.2 million metric tons each year.
Meanwhile, Brazil and Argentina would increase their exports and seize the opportunity to expand their market share. Brazil, in particular, would benefit as Chinese tariffs would only target U.S. crops, giving Brazilian farmers a clear advantage.
While the study found that U.S. farmers might redirect some of their exports to other countries, the global demand is not sufficient to offset the losses from China.
This would lead to lower prices for both corn and soybeans, causing a ripple effect on rural economies and affecting farmers' livelihoods across the country.
Photo Credit: gettyimages-alexeyrumyantsev
Categories: Illinois, Business