CHICAGO, (Reuters) – A rain-damaged soybean harvest in the U.S. Mississippi Delta is heaping more pain on farmers already suffering from a damaging trade war between the United States and China that has dragged prices to lows not seen in a decade.
Late-season storms, including bands of showers from Hurricane Florence, soaked ripe soybeans from Memphis, Tennessee, to northern Louisiana in September, enhancing mould and fungus growth and causing some beans to rot in their pods, grain traders said.
Now those soybeans do not meet the market’s crop quality guidelines, so farmers that sold soybeans through forward contracts are facing a penalty because they cannot deliver beans with the quality required, they said.
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The crop quality woes come as farm income has plunged by half over the past 5 years and as the deepening U.S.-China trade war harms demand for soybeans, the most valuable U.S. agricultural export product. China bought $12.3 billion of the $21.5 billion in U.S. soybean exports in 2017.
“The export market’s not in a good position to take a lot of the off-grade quality this year because of the issues we’re having without the Chinese (market),” said J.O. Norman, vice president at Oakley Grain in North Little Rock, Arkansas, which operates six elevators in the region.
China halted purchases after slapping 25 percent tariffs on U.S. shipments on July 6.
