U.S. sorghum became the next victim of a trade war between President Donald Trump and China Tuesday, taking aim at one of Kansas' top crops.
The Chinese Ministry of Commerce announced plans Tuesday to make U.S. Sorghum exporters pay a temporary 178.6 percent “deposit” as part of anti-dumping duties on the grain. China is the largest consumer of U.S. sorghum abroad, according to the U.S. Department of Agriculture National Agricultural Statistics Service. Kansas has been America's top producer year after year, meaning China’s decision could have a large impact on the state's farmers.
Agriculture has been China’s main target in the trade dispute, with import duties planned for hogs, soybeans and now sorghum, since the U.S. placed tariffs on imported steel and aluminum.
In February, the Ministry of Commerce launched anti-dumping and countervailing duty investigations. Those investigations recently wrapped up, with the ministry concluding that sorghum shipments had been unfairly subsidized, harming Chinese farmers.
The investigation was believed to be a warning shot following the announcement of U.S. tariffs on Chinese-made solar modules and appliances.
China relies almost solely on the U.S. for sorghum and imports around $1 billion worth of the cereal grain each year. The grain is used to feed cattle, as well as an ingredient in the strong, Chinese liquor, baijiu.
The sorghum market has been largely Chinese driven. Sorghum has not previously seen the tariff restrictions of crops like corn, and it is cheaper to bring sorghum into south China for feed than move corn in from north China.
Regardless of the preliminary ruling, National Sorghum Producers said in a statement that U.S. sorghum is not being dumped in China.
“National Sorghum Producers is deeply disappointed in the preliminary antidumping determination issued today by China’s Ministry of Commerce,” the group said in the statement. “U.S. sorghum is not being dumped in China, and U.S. sorghum producers and exporters have not caused any injury to China’s sorghum industry.”
Farmers trying to remain confident
Jenny and Geoff Burgess operate Burgess Hill Farms in Reno and Rice counties. The two farm just over 2,000 acres, with 500 acres of sorghum. Geoff Burgess said if the tariff on sorghum goes through with no agreement reached, it will have a huge impact on Kansas producers at a time when sorghum prices are already down.
“We’ve got too much grain around,” he said. “Oversupply causes prices to fall, and when trade goes down, it just causes more oversupply.”
The Burgesses do see a potential silver lining, though.
“There’s a lot of fear-mongering going on with the U.S. and China using these tariffs to bash each other,” Geoff Burgess said. “But I think they do have a golden opportunity to come out of this with a better trade deal.”
Gov. Jeff Colyer released a statement Tuesday, declaring the tariffs "devastating."
“The announcement of China’s intent to place a nearly 179 percent tariff on U.S. sorghum will have a devastating effect on the Kansas agriculture industry and thus the Kansas economy,” Colyer said. “In the last three years, Kansas exported nearly $416 million in sorghum to China. Any effort to restrict the ability to export sorghum directly hits the pocketbook of farmers across Kansas. Foreign market access is critical to Kansas agriculture at all times, but especially when our farmers are dealing with challenges brought on by low commodity prices and extreme weather conditions. Instead of targeting fairly traded U.S. exports, China should immediately stop its unfair trading practices.”
Colyer said he reached out to the Office of the U.S. Trade Representative and the U.S. Department of Agriculture Tuesday morning regarding the proposed tariffs.
“They are working diligently on this issue,” he said in a release. “Kansas farmers cannot afford a delay in action.”
No time to delay
Kansas Farm Bureau President Rich Felts agreed that farmers cannot afford a delay. He called for the U.S. and China to re-enter negotiations.
“Free trade gives America’s farmers and ranchers an edge in the global economy, and we remain concerned about the back and forth between the U.S. and China on exports,” Felts said. “We urge the United States and China to return to negotiations and produce an agreement that serves the interests of the world’s two largest economies.”
KFB is encouraging producers to send comments to the U.S. Trade Representative opposing higher tariffs. Between now and May 11, farmers and ranchers can send that message by simply going to the Kansas Farm Bureau website, www.kfb.org, and clicking on the top story regarding the U.S. Trade Representative.
Similar to Felts and Colyer, the Burgesses hope an agreement beyond the bonds of sorghum can be reached before time runs out.
“There’s an opportunity to even go as far as renegotiating NAFTA,” Geoff Burgess said. “As well as rejoining the TPP, which would be great for local producers.”
Chance Hoener’s agriculture roots started on farms and ranches in Southeast Kansas. Now he covers Kansas agriculture as the Kansas Agland editor. Email him with news, photos and other information at firstname.lastname@example.org or by calling (620) 694-5700, ext. 320.