Soybeans singled out in U.S.-China trade war, but small farmers bear the brunt

In theory, closing off China’s soybean market due to the trade dispute with the U.S. on top of generally low prices for the commodity should affect all industry players, big to small. Agriculture economist Pat Westhoff begged to differ. “The impact on total revenue may be very similar across the scale of production,” according to Westhoff, who’s an ag economics professor at the University of Missouri. “But sometimes the effect on net revenue can be very different. So a given price that may be difficult for a large producer can be catastrophic for a small producer.”In other words, if you’re a farmer who plants only soybeans on relatively few acres, you’re probably in trouble.Cargill CEO David MacLennan told Yahoo Finance in late January that the company has “had to shift supply chains from North America to South America” — buying instead soybeans from Brazil and Argentina.Those places, Westhoff noted, aren’t in a trade war with China, and are markets that the multinational corporations already work in.“South American soybeans are going to be capturing a premium in the Chinese market than would they would have had, had it not been for the tariffs,” he said.