Solutions prove elusive for Minnesota soybean farmers caught in trade war with China

Jim Purfeerst’s soybeans went straight from his fields to storage this fall.

The fifth-generation farmer outside of Faribault plans to offload them in December. By then, he hopes prices will improve.

The current basis, a reflection of local prices linked to demand, makes it tough to turn a profit. “From 2022 ‘til this year we lost 40% on the bean price,” he said. “It makes you watch every penny you spend.”

Purfeerst isn’t an outlier in storing soybeans this year. Many other Minnesota farmers are following suit, waiting it out until a more favorable day arrives.

The chances of a return to 2022 prices appear dim on the horizon as long as soybeans remain a central commodity in the U.S.-China trade war, which has the agriculture industry grasping for solutions.

A hole all the way to China 

China really, really wants soybeans. In a country with more meat consumption than anywhere else, the legume is crushed into feed for livestock.

Only so many places produce soybeans. At 28% of global production, the U.S. is second only to Brazil — at 40% of production — in growing the crop.

The U.S. and China should be natural trading partners, right? 

Yes, provided there isn’t a trade war. 

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China bought nearly 27 million metric tons of soybeans from the U.S. in 2024. At $12.64 billion, China was by far the biggest buyer — the distant, next closest was the European Union’s $2.45 billion. 

President Donald Trump’s trade standoff with China led the country to turn away from U.S. soybean exports this year, a follow-up to what happened during his first term. Brazil and Argentina seized on the opening.

The latter country received a $20 billion bailout from the U.S. this month. Almost immediately afterward, according to the American Soybean Association, Argentina waived taxes on soybean exports and sold 20 shiploads to China. 

It was poor timing for American farmers, said Darin Johnson, president of the Minnesota Soybean Growers Association. Supplies from the ships will likely hold China over for months. China essentially bought time as much as it bought soybeans. 

The U.S. is now scrambling to find other markets for soybeans, either via new international buyers or a growing domestic biofuel industry. Farmers in Minnesota, among the nation’s leaders in soybean production, are feeling the squeeze in the meantime.

“It’s very concerning right now what this is going to look like moving forward in the next month,” said Johnson, a farmer in Faribault County. “We definitely need to get these trade deals done and finalized and keep our soybean export pipeline moving.”

Minnesota mirrored the U.S. in exporting most of its soybeans to China in past years. In 2024, Minnesota’s export value to China totaled $1.7 billion, or 52% of Minnesota soybean exports. Mexico was the next biggest market at $310 million. 

Right about now, said grain market economist Ed Usset, the U.S. would’ve had about 60% of soybean sales for the next year on the books with China. No such sales are happening now. 

Usset works at the Center for Farm Financial Management at the University of Minnesota. Losing China as an importer is contributing to soybean prices staying in the $9-$10 per bushel range, he said, compared to being at least $3 higher within the last five years.

“Those prices are below production cost for just about everyone,” he said. 

Asked about the profitability of soybean agriculture right now, farmer Bob Worth said there isn’t any. 

“We’re in the negative number,” said the Lincoln County soybean farmer. “Is that partly because of low prices? Yes, and partly because our input costs are so high. There are a lot of young farmers who aren’t going to survive.”

High inputs and lost export markets represent a “double whammy” hitting farmers this year, said Joel Schreurs, a soybean farmer in Lincoln County. Fertilizers, equipment and other input costs are higher, some attributable to tariffs.

Restoring trade relations with China would alleviate part of the issue, Schreurs said. He’s not bracing for an end to the tension in the near term, though.  

“China is a long-game player,” he said. “They’ll take a hit for a year or two to win in the next eight.”

Other ways around the gargantuan hole in the market are time consuming in their own right, perhaps too much so for some farmers.

Mediation notices, a tool used by farmers in the hopes of avoiding foreclosures, are at their highest point since 2019, according to Brownfield News. The 144 notices in Minnesota in August were reportedly three times higher than in August 2024.

Farm bankruptcies are also up this year, according to Federal Reserve data. The Ninth District, which includes Minnesota, had nine in the second quarter, the most since 2021, a total that remains low compared to historical baselines.

Planting the seeds

Schreurs recently welcomed a trade mission from southeast Asia to his farm, part of an attempt to piece together markets in China’s absence. The farmer said more of this will be needed in the months ahead.

But just like there are only so many soybean producers, Usset said there are only so many countries with the capacity to handle whole beans. “A country may want more soybeans but their crushing capacity is what it is,” he said. “To take more soybeans you need to build crushing plants.”

More than half of Minnesota’s soybeans get exported, traveling by train to the Pacific Northwest for shipment to China or other Asian counties, or by barge to Louisiana. Much of the rest may be stored or sold to processing plants like the ag cooperative CHS, resulting in oils and feed.

Johnson heard crushing plants in southern Minnesota are humming right now, a contrast to railroads to the northwest. Although this remains an important market for growers, prices aren’t as high as they’d like, partly due to the hole in the international market.

Purfeerst brings a lot of his beans to Mankato’s crushing plant. He expects it to be a popular choice for his peers this year, impacting prices.

“Outside demand just isn’t there after losing China,” he said. 

On Wednesday he and his family hosted Gov. Tim Walz and agriculture group leaders to discuss stressors on the soybean industry. Walz’s visit followed a Democratic National Committee press call Tuesday on the same issue.

At Purfeerst Farms, Walz talked about the urgency needed to relieve pressure on farmers.

“It’s really important right now that we both solve our trade issues as quickly as we can, but we also think about domestic markets for these products and making opportunities available,” he said.

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He expressed concerns about storage on Tuesday’s call. Yields, unlike prices, were relatively high this year. All those soybeans need to go somewhere, and storing it can come with a cost.

Purfeerst at least has a storage facility for his soybeans until the right time comes to sell. He lived through the 1980s farm crisis, as did Worth and many of the other remaining farmers in the state who watched prices bottom out and mass foreclosures abound.

The current climate in agriculture reminds Worth of those times. He’s confident in new markets becoming available, but not so much in them materializing soon.

“It’s going to take us a while, but it will get done,” he said. “I just hope we can survive by then.”

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