New Tariff Could Mean Trouble For Local Farmers

MISSISSIPPI (WCBI) – You’ve probably heard the word “tariff” in the news a lot lately.

Tariffs are fixed taxes on imported or exported products, and in the past couple of decades they’ve largely taken a back seat to Free Trade Agreements.

Recent trade moves by the Trump Administration and responses from the Chinese Government have tariffs front and center, even here in Mississippi, and one of our top exports is caught in the crosshairs.

The additional tariffs total around $50 billion, and if they do go into effect it could mean trouble.

The tension between China and the U.S. is sparking rumors of “trade war,” and Mississippi farmers are finding themselves in the middle of it.

“There’s just a lot of concern about it. I mean, margins are real tight as it is,” said Assistant Extension Professor at Mississippi State, Dr. Brian Williams.

Williams says it’s not so much the tariff being imposed, it’s the country who’s imposing it.

“In terms of soybean exports, China is our biggest customer,” said Williams. “So kind of breaking the numbers down, looking at the numbers themselves, we as a country, the U.S. export roughly half of our total soybean production, and of that 60% of it goes to China.”

Soybean production has grown dramatically in the state of Mississippi.

Last years soybean crop valued around $1.12 billion, almost double the production value of cotton ($562 million), the state’s number two row crop.

The news of these tariffs comes at a bad time, as a lot of farmers won’t be able to veer towards another crop.

“A lot of planting decisions, a lot of the seed, a lot of the inputs have already been purchased by a lot of our producers, so it’s going to be kind of difficult for them to really make some major changes and what they’re planning to produce,” said Williams.

The tariff only takes cents off of soybean bushels, but as Williams tells us, that adds up quickly.

“If we talk fifty cents a bushel and a producer is making 40 bushels an acre, that’s $20. If they have a thousand acres, that’s $20,000. That could be the difference in making money and losing money,” said Williams.

On top of this, there are threats of more tariffs to be placed on U.S. exports.

Hopefully, that doesn’t happen.