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Planting season, a critical time for farmers, just became more nerve-wracking for U.S. growers of soybeans and corn, reports Bloomberg. In a move that caught many in U.S. agriculture by surprise, China, on April 4, announced planned tariffs on American shipments of the two crops.
The tariffs are set to take effect in 60 days. That gives some farmers the opportunity of making a last-gasp switch to another crop. But for others it’s too late to make a change.
“It puts it into flux,” said Dave Walton, an Iowa farmer, who intends to watch prices closely in the next few weeks amid expectations that China and the U.S. will negotiate to avoid an outright trade war.
“We can switch acres from beans to corn if necessary,” added Walton.
North Americans farmers have until around the end of June to put soybean seeds in the ground, while corn planting typically ends a month earlier.
The U.S. Department of Agriculture (USDA) said last week there will be 88 million acres of corn and 89 million acres of soybeans, covering a combined area larger than California.
The stakes are especially high this year given the parlous state of the agricultural economy. A succession of bumper harvests has led to gluts and depressed crop prices. The USDA projects net farm income will fall to a 12-year low of $59.5 billion, less than half the record level seen in 2013. (Source: Bloomberg)
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