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Thousands of SC soybean farmers face big financial losses amid Trump's tariffs

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Geneticist traces soybean roots (copy)

Local farmer Adair McCoy grows soybeans on Wadmalaw Island. Tyrone Walker/File 

In an 800-acre field in Sumter, flowers begin to bloom and pods begin to grow: This is what soybeans look like mid-season during early August. 

"It's making its crop right now," said John Rivers, of Rivers Farms. 

Come November, these soybeans will be harvested and sold mostly to a local feed company. What price they will bring is anyone's guess.

The Chicago Board of Trade sets the prices, and last year, Rivers sold his soybeans at about $10.30 per bushel. This summer, soybean prices have dropped in the wake of a U.S.-China trade war spurred by tariffs announced by President Donald Trump. The current price is $8.94 per bushel. China's retaliatory tariffs against American exports will hurt soybean and pork producers, The Associated Press reported. 

As a result, Rivers has sold only 10 percent of his crop so far. If he sells all of his crop at the $8.94 per bushel price in November, he will have lost an annual profit of about $80,000. Soybeans have become the third-largest cash crop in South Carolina, according to the National Agricultural Statistics Service.

"Our crops are still growing, so until November, I won't have to deal with that," he said. "I'm hoping something changes between now and then." 

In response to decreasing crop prices, the Trump administration recently rolled out a plan for a $12 billion aid package for farmers, but it's too early to say how much, if any, of that money might help farmers like Rivers.

Soybeans, one of the crops most heavily affected by Trump's tariffs, became a cash crop in South Carolina in the late-1940s as part of an effort to replace "King Cotton," according to a 2016 entry in the "South Carolina Encyclopedia" by Eldred Prince, Jr. 

Farmers in the Palmetto State liked the crop's low fertilizer requirements, and they liked that the crop was a good fit among cotton and tobacco field cultures, Prince wrote. Production costs were low, too. 

By the early 1960s, soybeans were an important part of the state's agricultural economy, and in 1982 the crop's production peaked at 1.8 million acres. 

"But rising costs of fuel, fertilizer and equipment squeezed soy profits, while competing culture areas in the Midwest softened demand," Prince wrote. "Added to these trends was the declining real value of soybeans."

In 2000, soybeans sold for about half their 1982 inflation-adjusted price. Shortly after that, about 15 years ago, Rivers Farms began growing soybeans alongside corn, wheat and cotton. 

Still, they remain a major agricultural commodity: Soybean revenue in South Carolina was almost three times more than tobacco last year. Soybeans bring in about eight times as much money as peaches, according to the National Agricultural Statistics Service.

Rivers said he voted for President Trump in the 2016 election and said he supports him to this day, despite the potential effect that the tariffs may have had on his bottom line. 

Rivers said he believes the market will work itself out.

"We'll feel the effects," he said. "We'll have to cut costs and make adjustments and change a few things." 

For those hit hard, the Trump Administration plans to spend $12 billion to help. The U.S. Department of Agriculture will spend that money on three programs to assist farmers: 

  • The Market Facilitation Program will provide payments incrementally to producers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs.
  • A Food Purchase and Distribution Program will purchase unexpected surplus of affected commodities for distribution to food banks and other nutrition programs.
  • A Trade Promotion Program will assist in developing new export markets for farm products.

Of the states that produce soybeans, South Carolina ranks No. 22. More than 2,600 farmers in South Carolina harvest soybeans. 

It is unclear how much money will be directed toward South Carolina farmers, S.C. Department of Agriculture spokeswoman Sally McKay said.

"We do not have a lot of detail yet on the disbursement of the U.S. Department of Agriculture $12 billion relief fund," McKay said. "We're fairly certain that farmers will apply for money through the FSA (Farm Service Agency), as opposed to the money being granted to state departments of agriculture and then dispersed."

These aid programs were described as a short-term solution by the nation's Secretary of Agriculture Sonny Perdue. 

"The president promised to have the back of every American farmer and rancher, and he knows the importance of keeping the rural economy strong," Perdue said. 

Rivers has crop insurance, but that will not pay out for losses due to tariffs. While the lower prices may drive some soybean farmers into extinction, Rivers said he is confident in his farm's future — with or without federal aid.

"I'm not an aid package kind of person," he said. "I don't want a handout. I'd like a fair market value. ... I'd like to be able to be profitable." 

Reach Hannah Alani at 843-937-5428. Follow her on Twitter @HannahAlani.

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