Amid tariff unpredictability, U.S. soybean farmers encouraged to take wider approach to export diversification

By Bridget Dean, Associate Editor 

The first two months of the second Trump administration have been rife with unpredictability as tariffs have been threatened, implemented or postponed. For most industries, “it’s better for government policies to be predictably good than sporadically great,” says Mike Steenhoek, executive director of the Soy Transportation Coalition (STC), which represents 14 state soybean boards, the American Soybean Association and the United Soybean Board. 

“Most capital-intensive industries have a real distaste and antipathy toward unpredictability,” he adds.  

Agriculture is one of those industries. Without confidence of a successful selling season ahead, farmers tend to hold onto their capital, pausing major purchases and investments in infrastructure. Soybean farmers are hurting, especially right now — China is the commodity’s biggest importer.  

Even if farmers receive government subsidies like the 2018-2019 issued by the U.S. Department of Agriculture’s Commodity Credit Corp., government payments don’t inspire confidence the way a stable market does, Steenhoek says. U.S. Department of Agriculture Secretary Brooke Rollins has said farmers will be taken care of, but no detailed plans had been shared as of this week, he adds.  

Government payments also don’t repair damaged trade relationships. During the first Trump administration, a trade dispute between China and the United States resulted in a significant curtailment of U.S. soybeans to China; the industry has not recovered from that hit, Steenhoek says, because China began sourcing more soy from Brazil, the world’s top soybean producer and exporter.  

“[China] also made and continues to make investments in the infrastructure in Brazil,” he says. 

Even if trade disputes between the United States and China settle, China is more likely to continue sourcing from where it has invested its capital, as U.S. soy exporters learned in 2018. 

The STC is communicating to lawmakers and members of the Trump administration that another decrease in soybean exports to China would be a significant issue for soy farmers. A decrease in soy shipments would also have a long-term ripple effect on every industry that touches soy processing or transportation.  

In the meantime, the coalition continues to encourage members to diversify their export markets — an effort that has been ongoing for years. While China is a near-perfect market for soy due to its large population and dietary customs, there are other countries that import soybeans, many of which soy farmers haven’t fully explored. 

The coalition is also supporting efforts to strengthen soy exports with diverse methods of transportation, including rail, barge and trucking. Through partial financing and influence, the coalition has supported infrastructure upgrades and partnerships between transportation operators and soybean farmers, Steenhoek says.   

“We were obviously incredibly pleased and grateful for the fact that we have such a [strong] rail industry in the midst of low water on the Mississippi River the last three years,” he says. 

Rail is also the mode of transportation that gives the United States an advantage over Brazil when exporting soybeans to Mexico, because of the option for direct surface transportation.  

Even with diversification efforts in place and the STC advocating for farmers, the unpredictability of this fall’s harvest is looming and could cause farmers to hold off on investing in major projects, Steenhoek says. 

While he believes there are legitimate points of trade dispute between the United States and China, Steenhoek says officials from both countries shouldn’t let those conflicts restrain trade agreements that are working well — for example, U.S. farmers benefit from China importing their product, and people in China are provided with a source of food, oil and feed supply. 

“We don’t have a concern with wanting to protect and promote U.S. industries. ... We have a long and proud history [of] farmers growing U.S. food on U.S. soil, and that’s worth preserving and protecting,” Steenhoek says.