North Dakota is a region that specializes in growing soybeans in the whole of United States. Soybeans farming ensures that the U.S can export the soybeans to other nations for economic gains. The largest market for the soybeans from North Dakota is China.
China imports almost all the soybeans from the United States and uses it in making feeds for chicken and pigs. Soybeans farming improved from the early days of tilling only 450, 000 acres of land to 6.4 million currently. The expansion of soybeans farming came about due to increased demand from China.
How is the Trade War affecting Soybeans?
Trade Wars have however affected the exportation of soybeans from the United States to China. China and United States administrations have had trade wars in the recent past. The United States led by president Trump enacted trade tariffs on Chinese goods. In response, China also put trade tariffs on the United States goods. The decision by Mr. Trump was fueled by the need to revive the industries in the U.S. The tariffs were to help the United States reestablish its economic relations with other nations.
Soybeans are among the goods affected by the trade wars going on between the two. The decline in the consumption of soybeans by China means that there is a pile-up of soybeans in Dakota. Over half of the produce from North Dakota goes to China. Last year, the U.S had over $ 26 billion in sales from China alone.
Trade War, Soybeans and The U.S. Economy
Not only is the U.S economy losing revenue but the farmers are suffering. With their produce stuck in grain elevators, they will not be able to receive any income. Soybeans farming has a high cost of production due to the use of sophisticated technology and farm inputs. The farmers who planted their produce are thus still waiting or their returns.
The decision to stop buying soybeans has left the grain elevators in Dakota overflowing with soybeans. The manager of t