LEILA FADEL, HOST:
Now, China consumes more than half of all soybeans exported from the U.S., so this trade war is hitting America's soybean industry hard. Caleb Ragland is watching the tariffs and retaliatory tariffs between the U.S. and China from his farm in Magnolia, Kentucky, where he grows soybeans and serves as president of the American Soybean Association. Good morning, Caleb. Thanks for waking up early with us.
CALEB RAGLAND: Good morning. Happy to be here.
FADEL: So the U.S. has 145% tariffs on Chinese goods - China, 135% on American goods. How do these impact soybean farmers like you and the industry at large? One hundred and twenty-five percent, sorry. I correct myself there.
RAGLAND: Well, it's hard to keep up at the current rate.
FADEL: Yeah.
(LAUGHTER)
RAGLAND: But we're very concerned. As you mentioned, China is the largest buyer of U.S. soybeans internationally. We export right about 50% of all soybeans produced in the U.S., and China purchased 52% of U.S. exports last year. So if you see a soybean field, every fourth row of soybeans went to China last year.
FADEL: Wow. So what does this mean for farmers then?
RAGLAND: Well, we have a precedent from the first trade war. At that time, 1 out of 3 rows went to China. And when the dust has settled, we have lost about 9% of all U.S. production and exports to China. That's been replaced by our competitors in South America, mainly Brazil. China has even invested majorly in infrastructure there in ports and bridges and rail and roads. And we're likely not to get that back.
Our grave concern is we could permanently lose another big chunk of our export market that we are dependent on for our production. And if we don't have that demand internationally, we're going to have to find more uses here domestically. And the result will be, at least in the short term, that we'll lose price due to low demand and high supply. And the U.S. farm economy is in a tough spot, and we just don't have any room for error right now.
FADEL: I mean, can you weather this trade war? I mean, can your farm survive it? Can other people's farms survive it?
RAGLAND: Well, we're very concerned, quite frankly. Last year, we're told that there were four times more defaults on farm loans due to the weak farm economy. And working capital is low, interest rates are higher. Costs of production are at record highs. Inflation has wreaked havoc on everything that we use - whether it be equipment or whether it be chemicals, whether it be seed - because everybody down the supply chain that takes care of us, their costs are higher, too. So it's a tough spot. We desperately need strong demand for our soybeans so we can receive a good price. So we're needing opportunities both domestically and abroad now, and not just in the future (laughter).
FADEL: Yeah. I mean, you know, you have been very public about your support for the president. You voted for him three times. But you've also - I'm listening to you talk about the pain that you felt during the first administration with the tariffs that were put then, kept during the Biden administration. Now these steeper tariffs, which he promised on the campaign trail. So did you not vote for these tariffs in some ways?
RAGLAND: Well, we knew that that was a possibility. What we also know is that President Trump put a Phase 1 trade deal in place with China during the first administration. And we also had precedent that we didn't have much trade activity in the past four years as well, so we had to make a decision based on a lot of different factors. But I believe President Trump and his administration have the opportunity here to get some major trade deals done. And we hope that's what they're doing because we must have trade, as I've said. And that is what our farmers are dependent on. We are great at producing soybeans and other ag products as well, but soybeans are the No. 1 ag export, so we're kind of the tip of the spear here.
FADEL: What do you want the president to do, if you could ask him or tell him what to do in this moment and what farmers need?
RAGLAND: We are actively in discussions with the administration, and we need trade, and we need trade deals. And that's the bottom line. And I believe the president wants to do that. I think he cares about our country. But we must have trade, and we need opportunities now. And our...
FADEL: Do you want him to reverse these tariffs?
RAGLAND: We want him to get the best deal possible. If that means tariffs for a short term, fine. But we can't be in a tariff war for years on the end because we'll die before then.
FADEL: Caleb Ragland is a soybean farmer in Magnolia, Kentucky, and president of the American Soybean Association. Thank you so much for your time.
RAGLAND: You're welcome. Transcript provided by NPR, Copyright NPR.
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