In Minnesota's soybean country, trade war with China hits hard

WELLS, MINN. — Everything seems to be humming along on Darin Johnson's farm. A trencher lays irrigation tile in a field hugging Interstate 90, the highway loping over these southern Minnesota flatlands. An 18-wheeler fills up with golden grain. Planting is around the corner.

Beneath the routine, anxiety lurks. This soybean farm is on the front lines of America's trade war with China.

A day prior, Johnson, president of the state soybean lobby, welcomed a French television crew to his farm. Weeks ago, he drove to the Twin Cities to talk with a visiting Canadian delegation.

Visitors to the farm usually want to know the same thing: How will they weather the price increases?

So far, the answer is unknown.

Johnson, a tall, straight-backed farmer, almost crumpled about noon on Wednesday after he pulled out his phone to discover the latest from Washington, D.C.

President Donald Trump had paused tariffs on nations across the globe. Except for China.

Trump had raised tariffs on Chinese goods to 145%. China is the largest buyer of American soybeans — including about 1 of every 4 rows of those grown in Minnesota. Now it has retaliated with a 125% tax on U.S. goods.

"You just don't honestly know what's going to happen from one day to the next," Johnson said, shaking his head.

Soybeans are Minnesota's largest export, $2 billion annually, more than taconite and medical devices.

Some beans get trucked to elevators on the Mississippi River. But the largest share are loaded on rail cars and shipped to the Pacific Northwest for transport on freighters to Asia.

Soybeans originated as an Asian crop. They've been grown by farmers in the Midwest since the 19th century as feed for livestock. By the 1940s, production boomed across the heartland for use in everything from oils to plastics for Henry Ford's assembly line.

By the dawn of the 21st century, soybeans were flooding into biofuel plants popping up across the region. The industry has looked to sustainable aviation fuel as the future.

But in the here and now, soybean farmers rely on foreign markets, none more than China, where the high-protein crop largely feeds livestock.

"I am very confident that this is effectively an embargo," said Jason Ward, a market analyst with Northstar Commodity. "It doesn't matter [if the tariff is] 84 percent or 9,000 percent. It's not going to get purchased."

America runs a trade deficit with China. Trump administration officials have said the Chinese will feel more pain from higher prices than Americans.

From autoworkers and the Teamsters to shrimpers in Louisiana, some cheered the tariffs.

But in America's breadbasket, where the towering silver grain bins are filled with beans and corn meant for Asia, farmers are bracing for what's to come.

"I truly hope that these tariffs will lead to negotiations and get us good trade deals in the near future," said Johnson, a 1996 graduate of the high school in nearby Wells. "You just hope it doesn't last very long."

During the 2018 trade dispute with China, the United States lost its top spot for soybean production to Brazil.

The Ukraine war propelled prices in 2022, but soybean markets have softened as input costs, from diesel to fertilizer, have stayed high. Meanwhile, weather swings only aggravated low crop prices and inflationary pressures.

"The last two years, from an economic standpoint," Johnson said, "have been the worst in agriculture since 1977."

In 2021, an acre of soybeans netted farmers $230 on rented land. Last year, farmers lost $35 on that acre, according to a new report from the Minnesota State Southern Agricultural Center of Excellence.

Flooding that blew out a dam and inundated cropland started the season, and drought capped the season.

"Beans tend to be more sensitive to fluctuations in weather," said Brent Roiger, a farm business management instructor at South Central College in Mankato.

Now, as farmers are still reeling, this new trade war has begun.

On Friday, Minnesota Sen. Amy Klobuchar was the lead signatory on a letter from Senate Democrats, including Minnesota's Tina Smith, to U.S. Trade Representative Jamieson Greer.

It argues that farmers in 2025 are "less equipped to withstand ... continued volatility" after the last trade war. Moreover, senators note that a 3% drop in the soybean futures price last Friday lost farmers $1.4 billion on the 2025 crop.

By week's end, contracts on May soybeans had climbed back over $10.30.

Fortunately, the markets contain silver linings, said Northstar's Ward, who has watched growing demand for soybean oil internationally. Moreover, Ward believes many farmers won't plant soybeans, and he's optimistic that when buyers come for American beans in midsummer, a new trade deal could be in place.

"The whole thing changes if China comes back," Ward said.

Minnesota farmers near Iowa are insulated more than other areas of country from global swings. There are lots of hogs and turkeys to eat soy meal. Grain trucks cruise daily to crush plants in Mankato and Fairmont.

But in south central Minnesota, in a farm landscape built around corn and soybeans, the tighter global economic picture will be felt.

The car dealership in Wells was shuttered after the 2018 trade war. And the population has long stagnated. Towns consolidated schools in the early 1990s, following another farm crisis. Residents remember when the town had three banks and two grocery stores.

The fortunes of the farm economy, in other words, ripple across town.

"Agriculture is the fuel that drives Main Street," Johnson said.

He pulled his baseball cap up to scrutinize the latest market numbers on his phone as another truck ready to pick up grain pulled into his yard.

Brooks Johnson of the Minnesota Star Tribune contributed to this story.