Technology As soybean futures plunge, farmer says tariffs have 'devastated' the industry

04:35  11 august  2018
04:35  11 august  2018 Source:   cnbc.com

$12B bailout for U.S. soybean growers will come at Canada's expense, says Dresden farmer

  $12B bailout for U.S. soybean growers will come at Canada's expense, says Dresden farmer The U.S. government recently announced a $12 billion plan to assist farmers who have impacted by the trade dispute — something Phillip Shaw, an agricultural economist and Chatham-Kent soybean farmer, said is problematic for soybean farmers in southwestern Ontario. In early July, China placed a 25 per cent tariff on American soybeans — after the U.S. hiked tariffs on $34 billion worth of Chinese imports. Since then, farmers in Ontario have watched the global price of soybeans fall steadily. By mid-July, reports put the price of a bushel of soybeans down about $2 U.S.

The possibility of a record soybean harvest will only add to the woes of an industry already " devastated " by escalating trade tensions between the United States and China, Ohio soybean farmer Chris Gibbs told CNBC on Friday.

Related: A massive US farming industry fears China trade trouble. Tariffs would cause Bible to re-evaluate his planting strategy and Chinese tariffs "will have a devastating effect on every soybean farmer in America," American Soybean Association President John Heisdorffer said in a statement.

  As soybean futures plunge, farmer says tariffs have 'devastated' the industry © Provided by CNBC
  • The possibility of a record soybean harvest will only add to the woes of an industry already "devastated" by escalating U.S.-China trade tensions, says farmer Chris Gibbs.
  • Soybean futures plunging on Friday after a USDA report about the possibility of a large soybean harvest.
  • Gibbs says the agriculture community's fear with the trade war is that the U.S. will be seen as an unreliable supplier.

The possibility of a record soybean harvest will only add to the woes of an industry already "devastated" by escalating trade tensions between the United States and China, Ohio soybean farmer Chris Gibbs told CNBC on Friday.

Dow set to sink at the open as politics, trade woes keep investors on edge

  Dow set to sink at the open as politics, trade woes keep investors on edge U.S. stock index futures fell deep into the red ahead of Friday’s open, following negative sentiment in markets overseas. Around 5:35 a.m. ET, Dow futures dropped 93 points, indicating a negative open of -93.23 points, with the S&P 500 and Nasdaq futures also pointing to a downbeat start to the day.During yesterday's trade, the Nasdaq Composite scored its longest winning streak in close to a year, boosted by positive trade out of tech stocks including Amazon and Apple. On Friday, however, red is striking markets across the board, as political woes and trade fears send jitters across global markets.

China’s February imports of U.S. sorghum plunged 24 percent from a year earlier, customs figures show. Soybean futures slid as much as 5 percent on Wednesday in response to China’s move. Illinois soybean farmer Lucas Strom said China’s tariffs confirmed his worst fears.

Soybean farmers , apple growers and auto workers are among the US workers bracing for fallout from a trade war between the United States and China. The US on Friday slapped tariffs on billion worth of Chinese imports to combat what is says are the country's unfair trade practices.

Earlier in the day, the U.S. Department of Agriculture predicted U.S. soybean production for the 2018-19 crop year would hit 4.586 billion bushels, topping market forecasts. The news sent soybean futures plunging on Friday, falling more than 4.5 percent. It was their worst day since the July low.

"The effect of the trade war has been very devastating on soybean farmers here. We've taken a 20 percent drop in price," Gibbs said on "Power Lunch."

"What we're seeing with market action today only exacerbates the fact that we have lost our No. 1 customer because of the trade wars."

The U.S. and China have been engaged in a tit-for-tat escalation of tariffs against one another. In July, President Donald Trump slapped 25 percent tariffs on $34 billion of Chinese imports. Beijing responded by imposing 25 percent duties on American exports, including soybeans.

German Court Awards Farmer $1 Million for 2000-Year-Old Bronzed Horse Head Found in His Well

  German Court Awards Farmer $1 Million for 2000-Year-Old Bronzed Horse Head Found in His Well He was originally paid $55,946.The gold leaf–covered head, which weighs about 55 pounds and measures 20 inches long, had likely been part of a larger statue, as indicated by a bronzed foot found nearby. Experts believe the horse's rider was Augustus, Rome's emperor at the turn of the first millennium CE. The head had been preserved under water at the bottom of a 36-foot well for years, making the find even more remarkable.

The Ministry of Commerce in Beijing said it will levy an additional 25% tariff on 106 U.S. products, including soybeans , automobiles, chemicals, aircraft, whisky and cigars. At the time of writing, the Dow Jones Industrial Average futures market was down 2.34%.

China’s planned retaliatory tariffs , which were unveiled in response to measures by the Trump administration, “will have a devastating effect on every soyabean farmer in America,” said John Heisdorffer, president of the American Soybean Association, which represents more than 300,000

In August, the U.S. Trade Representative's office released a finalized list of $16 billion worth of Chinese goods to be hit with tariffs, to take effect on Aug. 23. China responded by announcing a 25 percent charge on $16 billion worth of U.S. goods.

Trump has also threatened to impose broader tariffs on as much as $500 billion of Chinese goods.

Gibbs, who owns and operates 560 acres of farmland, said the agriculture community's fear is that its years of building up markets around the world could disappear overnight.

He pointed to history as a guide — specifically what happened in 1980, when then-President Jimmy Carter imposed a grain embargo on the Soviet Union after the country invaded Afghanistan. That resulted in other world markets looking for a different supplier since the U.S. was seen as unreliable, Gibbs said.

"This is the fear that we have out here in agriculture country, that we're going to become an unreliable supplier," he said.

— Reuters contributed to this report.

Energy Executives Lament Trump Tariffs As Costs Rise On Pipeline Projects .
U.S. President Donald Trump’s proposal to double tariffs on steel and aluminum from Turkey could push up costs even further for domestic oil and gas pipeline projects, as energy executives said they were already struggling from earlier tariff rises. There are more than a dozen U.S. energy pipelines on the drawing board, some of which are still seeking financing. The projects would pave the way for greater U.S. oil and gas exports and relieve a bottleneck in West Texas shale fields that is starting to pinch output in the region.Turkey delivers just 4 percent of steel mill imports, valued about $1.

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