Farmers in North Dakota are currently grappling with a severe crisis as they scramble to find additional storage space for a surplus of soybeans. The primary cause of this predicament is the halted purchases from their largest customer, China. On a particularly windy September morning, farmers Josh and Jordan Gackle convened to discuss the unprecedented challenges confronting their 76-year-old soybean farm.
For the first time in their history, the Gackle family farm, which spans 2,300 acres, faces a staggering projected loss of $400,000 in 2025 due to the absence of soybean exports to China. Soybeans that would typically be harvested and shipped to Asia are now accumulating in large steel bins, highlighting the dire circumstances. The situation worsened when President Trump implemented tariffs on Chinese goods in February, prompting Beijing to retaliate by ceasing all purchases of American soybeans. This decision has had catastrophic consequences for North Dakota farmers, who previously exported over 70 percent of their soybeans to China.
Unless China resumes its purchases as part of a future trade agreement, farmers dependent on this market face steep losses that could lead to widespread bankruptcies and foreclosures across the U.S. agricultural sector. The reluctance of China to buy American soybeans and other agricultural products is anticipated to dominate discussions as U.S. and Chinese officials convene for economic negotiations in Spain this week. These talks are being led by Treasury Secretary Scott Bessent, who has been tasked with securing a favorable trade deal for the U.S.
Interestingly, Secretary Bessent himself owns thousands of acres of farmland in North Dakota, valued at up to $25 million, which produces soybeans and corn. His investments reportedly yield up to $1 million in annual rental income. While Bessent's financial interests are tied to the agricultural sector, the struggles of family farmers striving to sell their soybeans are far more acute.
The current economic climate, characterized by high interest rates, soaring input costs, and declining prices, draws parallels to the 1980s farm crisis that devastated much of rural America. “The stress level is much higher now than it was then,” Jordan Gackle remarked, emphasizing the urgency of the situation. He fears that prolonged trade tensions could lead to a resurgence of foreclosures reminiscent of past agricultural downturns.
In a typical year, over half of the soybeans grown in the United States are exported to China, with North Dakota farmers relying heavily on this market. However, the ongoing trade war initiated by President Trump has disrupted this relationship. Following the imposition of tariffs on Chinese goods, China retaliated with its own tariffs, which now reach 34 percent on American soybeans, making them less competitive compared to Brazilian imports.
During Trump's initial term, the relationship between the U.S. and China soured significantly, with Beijing scaling back purchases of American agricultural products to exert pressure during trade negotiations. Although a trade deal was eventually reached, China's compliance with its commitments has faltered, especially in light of the pandemic's impact on U.S.-China relations.
With the soybean harvest season fast approaching, farmers are growing increasingly anxious. Justin Sherlock, a farmer from Dazey, North Dakota, expressed that local banks are tightening lending terms, making it difficult for farmers to purchase necessary equipment for the upcoming year. “If we don’t get a deal in the next few weeks, I think this turns what is hopefully a one-year problem into a multiyear problem,” he stated.
In response to the crisis, White House officials are contemplating federal aid for farmers, similar to the support provided during the 2019 trade war. Meanwhile, top negotiators from both nations have been in discussions throughout the year, but significant differences remain, particularly regarding issues like intellectual property theft and export controls on sensitive American products.
With China’s reluctance to reinstate soybean purchases, farmers are forced to explore alternative storage solutions for their harvests, utilizing makeshift containers or seeking additional space. At Arthur Companies, Kevin Karel is rapidly constructing temporary storage to accommodate potentially up to seven million bushels of soybeans.
The ongoing trade tensions and disruptions within the soybean supply chain pose a significant threat to North Dakota's agricultural economy. As farmers hope for a resolution, they remain acutely aware of the stakes involved. “These are turbulent, turbulent times,” remarked Bill Wilson, a professor of agribusiness at North Dakota State University, highlighting the unprecedented challenges facing the agricultural community. Without a resolution, the future of soybean farming in North Dakota remains uncertain.
