Acadiana soybean farmers are bracing for the worst case scenario after China imposes tariffs on American products.
The tariffs are in retaliation to tariffs imposed on Chinese imports by the Trump administration.
Among the American goods affected are soybeans.
"If these tariffs aren’t straightened out here within the next month or two, that the economic recession here in Louisiana will be felt by retailers and everything because Louisiana grows 1.3 million acres of soybeans," said Louisiana Soybean Promotion Board Chairman and St. Landry soybean farmer Charles Cannatella.
Soybeans are the highest earning crop in Louisiana, earning $680 million dollars in revenue last year.
Soybeans are also the state’s second highest earning export behind oil.
Louisiana has 2,300 soybean producers with 1.2 million acres of farmland devoted to the crop.
But, soybean farmers are worried that if these tariffs stick, they will have far-reaching impacts on the state’s economy.
"Our biggest customer and the biggest customer that consumes soybeans in the world is China, and Chinese people buy about sixty percent of the soybeans that are grown in this country alone," said Cannatella.
Cannatella knows first-hand about the Chinese demand for soybeans. He’s played a major role in marketing soybeans to the Chinese pork industry. Now, he’s worried that the trade dispute between the U.S. and China could hurt his and other producers’ bottom line.
"It makes our commodity more expensive than it actually is, you know. If we didn’t have a tariff and we could sell on a free market, you know, the Chinese people would pay us $8.50, but if you got a tariff, a 25-percent tariff on that, it brings that price back up to $10 dollars," said Cannatella.
Canatella says since the trade dispute began, he’s lost about $100,000 dollars just because of market uncertainty.
The LSU Ag Center expects South America, particularly Brazil, to capture the majority of the market-share of U.S. soybean exports into China.
However, even in the short term, those tariffs could have unintended consequences.
"You know, the rural economy is all reliant on AG, and when the price of commodities goes down, the farmers don’t have the money to spend the money on new equipment, so they just don’t spend. You just sit tight and wait until times get better, and so you’ll see it everywhere from the grocery stores to the car lots," said Canatella.
Canatella says he hopes the tariffs are resolved before harvest season starts in October.
