By RACHEL LANE

D.C. Correspondent

WASHINGTON, D.C. — American soybean and Chinese livestock farmers depend on each other for their businesses. Beginning this fall, China will need to look to U.S. farmers for soy as the Brazilian harvest season comes to an end, said Seth Meyers, chair of the World Agricultural Outlook Board for the USDA Office of Chief Economist.

Right now, Brazilian farmers provide soy to the Chinese from around Christmas to the middle of the Northern Hemisphere's summer. The United States is the primary supplier of soy for the other six months of the year.

This year, even if China buys all the soy from other countries and the U.S. sells soy to other countries, China will end up needing more while U.S. farmers will have too much, Meyers said.

After months of tension and tariffs, Chinese officials are exploring ways to decrease their dependency on imported soy. Chinese farmers may use less soy-based feed for livestock and may increase soybean cultivation within the country – but it is not a long-term solution for the demand for soy within the country.

Currently, most of China's soybeans are used for human consumption, Meyers said. The limited area of land that is appropriate for soybean production is already being used for other crops. If more soy is grown, less of something else would be planted. Corn prices in China are already higher than in most of the world.

Changing the feed to other protein plants may help reduce China’s dependency on soy imports, but it is a change that would take time and still wouldn't be as efficient a feed for livestock as soy.

Joe Logan, president of the Ohio Farmers Union, said China doesn't have the capacity to grow all the soy it needs; however, in the last two years, Brazilian farmers have planted an additional 2 million hectares of soy, or roughly the equivalent of soy grown in Ohio.

Logan thinks China may increase investments in South America, specifically Brazil. If the Chinese government steps in to improve the infrastructure and reduce corruption in Brazil that slows the supply chain, Brazil could supply it year-round.

The Argentinean ambassador to China has said talks about a free-trade deal between China and South American countries could begin in 2019.

“Folks in the agriculture industry have been talking about Brazil’s potential for years … Brazil has enough potential farmland that could be brought into production (to supply soy to China),” Logan said.

Shrub land currently used for livestock could easily be switched over to soy. Other possible land – like the Amazon rainforest – would face environmental challenges.

With announcements of tariffs, stock in the U.S. soy market dropped about 20 percent. It was expected the amount of U.S. soy sold would decrease, but little change has been noticed, Logan said. With the lower market prices in the U.S. and higher prices for Brazil soy, other countries have been purchasing the cheaper U.S. supply.

The result is that this year there likely won’t be less soy sold – but it will be to different markets.

Over the last few years, soybeans have passed corn as the largest crop in the U.S. Logan said wheat was abandoned by many farmers years ago and corn has decreased recently, as soy consistently had the highest returns. Instead of rotating, farmers started to plant only soy.

With corn and wheat prices still low, and soy decreasing this year, farmers are running out of profitable options. The best option might be to plant specialty crops, but USDA support programs such as crop insurance don't cover many, Logan said.

He has been working with other farmers to try to inform Congress about the need to expand crop insurance coverage in the 2018 farm bill, but neither the House nor Senate versions currently in conference committee contain such changes. He hopes to still get more support for specialty crops into the final bill.

Farmers can't keep sending soy to other places, he said. Other countries don't need enough soy for it to be a sustainable solution.

Steve Suppan, analyst at the Institute for Agriculture and Trade Policy, said another option to reduce soy imports to China would be to reduce the amount of pork eaten in that country or increase imports of pork products. While its citizens would likely object if pork isn’t available for major holidays, reducing consumption on a weekly basis wouldn't draw much criticism.

He doesn't know how much pork China might have stored, but the supply won't last forever, much like how U.S. farmers and elevators can't afford to store soybeans for long.

“Farmers are underwater. They were getting prices below the cost of production well before the announcement of tariffs that President Trump announced,” Suppan said.

Futures speculators look at what is happening in the world; right now, they’re betting against the price of U.S. soy. It will drive down the price per bushel to the elevators, and elevators will pay farmers less because they need to save money to store, dry and stir the increased grain supplies.

Farmers will continue to struggle to pay their bills, Suppan said. In Kansas, a survey indicated about 30 percent are having difficulty repaying their loans. Landowning farmers will have some options, but those who rent land will likely have to sell equipment, he explained.

No one knows when the $12 billion emergency aid will reach farmers. Right now, it's a one-time payment, and no one knows how long a trade war might last.

At the same time, the 2018 farm bill versions in conference cut conservation program funding and change eligibility on many of the nutrition assistance programs, he said.

“From a geopolitical viewpoint, farmers just don’t know which way to turn – and neither do their bankers,” Suppan said.