U.S. farmers finishing their harvests are facing a big problem – where to put the mountain of grain they cannot sell to Chinese buyers.
For Louisiana farmer Richard Fontenot and his neighbors, the solution was a costly one: Let the crops rot.
Fontenot plowed under 1,000 of his 1,700 soybean acres this fall, chopping plants into the dirt instead of harvesting more than $300,000 worth of beans.
Across the United States, grain farmers are plowing under crops, leaving them to rot or piling them on the ground, in hopes of better prices next year, according to interviews with more than two dozen farmers, academic researchers and farm lenders. It’s one of the results, they say, of a U.S. trade war with China that has sharply hurt export demand and swamped storage facilities with excess grain.
U.S. farmers planted 89.1 million acres of soybeans this year, the second most ever, expecting China’s rising demand to give them better returns than other bulk crops.
But Beijing slapped a 25 percent tariff on U.S. soybeans in retaliation for duties imposed by Washington on Chinese exports. That effectively shut down U.S. soybean exports to China, worth around $12 billion last year. China typically takes around 60 percent of U.S. supplies.
Read more in Reuters.