The price north Iowa farmers are getting for soybeans is 50 to 70 cents better than this time last year, but whether that will continue may depend on the outcome of trade talks between America and its closest allies.
President Donald Trump delivered a threat recently to trade partners meeting in Canada, saying they must dramatically reduce trade barriers or risk losing all access to the U.S. economy. Iowa State University economist Chad Hart said until the recent trade dispute, it looked like Iowa farmers were on course to benefit from a seventh year of record exports.
At a weekend summit with leaders of Britain, Canada, France, Germany, Japan and Italy, President Trump said his ultimate goal is the elimination of all trade duties. Global tariffs are currently around 3%, or close to their lowest levels ever, according to data from the World Bank.
Hart said this year’s crop planting is almost finished, and because markets prefer stability, farmers would like a better sense of what will happen when they take those crops to market. He said he believes many Iowa farmers are still optimistic the president can negotiate even better trade policies for the U.S.
Farmers have seen lower pork prices due to Chinese tariffs imposed earlier this year. And last week, Mexico said it too would hike prices for U.S. pork in retaliation for tariffs announced on steel and aluminum imports from Mexico.
Hart said long-term tariffs by Mexico could hurt Iowa farmers even more than the Chinese tariffs.
The U.S. Chamber of Commerce has predicted Iowa is “at risk” of losing 138,000 jobs related to trade with Canada and Mexico.