American Soybeans have been one of the two hardest hit sectors by the trade war with China. The price of soybeans has fallen at least twenty percent, if not more, since it all began. But why has Brazil not swooped in and taken over the export markets?
Audio: World of Agriculture
With Brazil being our biggest competitor in soybeans, why have they not been taking advantage of America?s export woes in the soybean market? There is some issue with this year?s crop not being as good as years past, but what about the stockpiles they already have. China is looking to buy tariff free beans, and Brazil has them.
It seems Brazil may be its own worst enemy in the export business. Recently, Brazil imposed new rules which drove up freight costs nearly 150 percent. Brazil instituted these new rules to appease freight haulers during the trucker?s strike earlier this year. This strike was in response to higher fuel costs.
Just like with American farmers, Brazilian producers would rather hold on to their supply rather than take a big financial hit. Brazil?s soy producers are storing their grain and halting sales. This is weighing heavily on Brazil?s ability to get more soybean stocks to export. Farmers in Brazil are worried they may bear the brunt of this freight cost. Not only are they having to find ways to store the grain they have, but their input costs are skyrocketing due to the increased freight costs on supplies they need.
Remember while we are concerned with what markets we will be able to sell to; Brazil?s farmers are worried about getting their product to market. It is both relieving and unnerving to know we aren?t alone in an uncertain time for agriculture. It seems farmers around the world are having to face tough decisions.
