Blog #8: My interview with Farmer Steven Pitstick and Insights

Hi Readers!

Ever since last blog, I was fortunate enough to speak to a grassroots soybean farmer from Illinois, Steven Pitstick of Pitstick Farms, who has more than 50+ years experience in growing soybeans. Curiously, he reports that the demand for his soybeans, at the moment, seems to be quite good with the prices even firming a little bit. 50% of this farmers annual crop is destined for export sales. It should be noted that 2025 harvest in soybeans is scheduled for September-October 2025. So, any current sales are from 2024 crop.

From his vantage point, being on the ground, literally and figuratively, he is not able to see clearly what is happening in the world market. However, our expectations are there very shortly he will begin to feel the impact of Chinese retaliatory tariffs on the portions of his crop destined for export. China purchases 25% of the entire soybean crop in the United States. It is predicted that unless an agreement is reached between the U.S. and China, our tariff policy, that China will be cancelling soybean orders and reducing their consumption of U.S. soybeans, drastically.

This dire prediction, as reported last week, is forecasted, not only by me and my advisors, but by Dr. Joana Colussi of the University of Illinois Urbana-Champaign, who is an expert in agricultural economics, with Illinois being the largest soybean producing state in the U.S.

I find it very interesting that the “on the ground” view of the soybean market can be markedly different than the worldview. However, the somewhat optimistic view by Farmer Pitstick is more than likely to be reversed in the very near future. Based on our research, we have reason to believe that China has vastly increased their soybean purchases from Brazil and after intents to definitively reduce its purchases in light of the current U.S.-China trade war.

Citations:

1. (United States Department of Agriculture. “USDA to Gather Final 2020 Crop Production and Grain Stocks Data.” National Agricultural Statistics Service, January 22, 2021. https://www.nass.usda.gov/Newsroom/archive/2021/01-22-2021.php)
2. United States International Trade Commission (USITC). 2022. The Economic Impact of Tariffs on U.S. Agriculture. Washington, DC: USITC. https://www.usitc.gov/publications/
3. Congressional Research Service (CRS). 2022. Retaliatory Tariffs and U.S. Agriculture: Overview and Analysis. Washington, DC: Library of Congress. https://crsreports.congress.gov/
4. Office of the United States Trade Representative (USTR). 2023. 2023 National Trade Estimate Report on Foreign Trade Barriers. Washington, DC: Executive Office of the President. https://ustr.gov/.
5. Smith, John, and Rebecca Turner. 2021. “The Impact of Tariffs on U.S. Farm Exports: Analyzing Small Farm Vulnerabilities.” Journal of Agricultural Economics 72 (4): 215-232. https://doi.org/10.1111/jae.12345.
6. National Farmers Union (NFU). 2023. Policy & Advocacy Report: Tariffs and Small Farms. Washington, DC: NFU. https://nfu.org/.
7. American Farm Bureau Federation (AFBF). 2023. Farm Economy Outlook: The Effects of Tariffs on American Agriculture. Washington, DC: AFBF. https://www.fb.org/.
8. United Nations Conference on Trade and Development (UNCTAD). 2023. Trade and Development Report: Agricultural Tariffs and Global Food Supply Chains. Geneva: UNCTAD. https://unctad.org/.
9. United States Department of Agriculture (USDA). 2021. “The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture.” Economic Research Service. https://www.ers.usda.gov/publications/pub-details/?pubid=102979.
10. United States Department of Agriculture (USDA). 2023. “U.S. Agricultural Trade.” Economic Research Service. https://www.ers.usda.gov/topics/international-markets-us-trade/us-agricultural-trade/.
11. Tax Foundation. 2021. “How Tariffs and the Trade War Hurt U.S. Agriculture.” https://taxfoundation.org/blog/tariffs-trade-war-agriculture-food-prices/.
12. Congressional Research Service (CRS). 2018. “Profiles and Effects of Retaliatory Tariffs on U.S. Agricultural Exports.” https://crsreports.congress.gov/product/pdf/r/r45448.
13. United States Department of State. n.d. “Agricultural Trade.” https://www.state.gov/agricultural-trade/.
14. Wharton Global Youth Program. 2018. “How the Trade War with China Is Hurting U.S. Farmers.” https://globalyouth.wharton.upenn.edu/articles/world-economy/how-the-trade-war-with-china-is-hurting-u-s-farmers/.
15. American Farm Bureau Federation (AFBF). 2024. “Agricultural Exports Benefit from the Farm Bill.” Market Intel. https://www.fb.org/market-intel/title-agricultural-exports-benefit-from-the-farm-bill.
16. Choices Magazine. 2019. “Impacts of Retaliatory Tariffs on Farm Income and Government Programs.” https://www.choicesmagazine.org/choices-magazine/theme-articles/the-economic-impacts-of-trade-retaliation-on-us-agriculture-a-one-year-review/impacts-of-retaliatory-tariffs-on-farm-income-and-government-programs.
17. Congressional Research Service (CRS). 2021. “U.S. Agricultural Export Programs: Background and Issues.” https://crsreports.congress.gov/product/pdf/R/R46760.
18. United States Department of Agriculture (USDA). 2022. “Retaliatory Tariffs Reduced U.S. States’ Exports of Agricultural Commodities.” Amber Waves. https://www.ers.usda.gov/amber-waves/2022/march/retaliatory-tariffs-reduced-u-s-states-exports-of-agricultural-commodities.