LAFAYETTE, Ind. (AP) — Some Indiana farmers worry that the struggling soybean industry could face another blow if China imposes tariffs on U.S. soybeans.
Soybean prices have dropped by nearly half following the 2012 drought that caused some countries to go elsewhere for soybeans. Supplies have increased, but rising equipment costs and interest rates add to farmers’ debt, the Journal & Courier reported .
“I know there are some farming operations that are living on a very thin line,” said Kevin Underwood, a Tippecanoe County councilman and a soybean farmer.
More than half the crop produced in Indiana is exported, with China being one of soybean’s main importers, Underwood said. The potential tariffs could lower soybean prices by up to 20 percent, he said.
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“Trade war doesn’t usually go well for Indiana,” Underwood said.
China could turn to Argentina and Brazil for soybeans if it enacts tariffs, said Marshall Martin, an agricultural economics professor and the senior associate director of agricultural research at Purdue University.
Indiana produced 320 million soybean bushels last year, equaling about $4 billion. West-central Indiana was responsible for more than 40 million soybean bushels last year.
“(The) two most important crops in Indiana are corn and soybean,” Martin said.
Farmers typically alternate between growing soybeans, which pulls nitrogen from the air into the soil, and corn, which benefits from the nitrogen in the soil, Underwood said.
Information from: Journal and Courier, http://www.jconline.com