Ontario farmers watch soybean prices tumble amid China-US trade war

Grain farmers in Ontario risk becoming collateral damage in the trade war between China and the United States as a tariff on American-grown soybeans precipitated a 20 per cent drop in the price of beans.

China put a 25 per cent tariff on American soybeans in early July, after the U.S. hiked tariffs on $34 billion worth of Chinese imports.

• U.S. tariffs take effect on $34B in Chinese imports as Beijing announces retaliation
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Since China's trade action, farmers in Ontario have watched the global price of soybeans fall steadily. By mid July, reports put the price of a bushel of soybeans down about $2 US.

"That's a significant drop in a month," said Jeff Stager, who farms 100 acres of corn and soybeans in Ayr, Ont.  

"Getting caught up in a trade war is just way beyond anybody. And what can you do about it? Nothing. The irony of it is it's man-made."

Driving down the price

When China put a tariff on soybeans coming from the United States, American farmers had to find someone else to buy their beans.

With more soybeans on the global market, the price dropped at the Chicago Board of Trade, which sets the cost of all soybeans, no matter where they are grown. 

Come harvest time in September, the drop in price could have a significant impact on farmers.

Agricultural economist Philip Shaw, who also farms more than 800 acres in Chatham-Kent and Lambton counties, said farmers in Ontario could lose a total of $37.5 million in revenue, due in large part to the drop in soybean prices.

Farmers may have to absorb that loss, as there is currently no program in Canada that provides financial assistance to farmers affected by price irregularities.

The Grain Farmers of Ontario have asked the provincial and federal government to consider an assistance plan but are waiting to see whether one will be put in place. 

On Tuesday, the U.S. government promised $12 billion to support American farmers who had been hurt by tariffs imposed by China.