China Ag Embargo Affecting Northwest Wheat Growers

Sep 9, 2019

Washington wheat ready for harvest
Credit Washington Ag Network

Northwest wheat growers are in the midst of their fall harvest, but the embargo on U.S. agricultural products by China is playing a role in the price and how farmers will sell their product this year.

Prices are currently not as high as many growers would hope for. Officials with the Washington Association of Wheat Growers say the break-even price is about $6.50 per bushel. On Friday, the average price was 5 dollars a bushel.

One factor that is playing a role in pricing to some extent and the market overall is the recent embargo by China of all U.S. agricultural products.

Michelle Hennings of the Washington Association of Wheat Growers says in the 2017-18 year, China was the fifth largest buyer of Washington state wheat. But leading up to this year's embargo, the Chinese stopped buying.

She says the overall effect for many farmers is their harvested wheat will sit in elevators unsold until a new buyer can be found.

“The problem is you have farmers that need to pay their bank, and they need to pay their expenses, and so a farmer doesn’t need to see their wheat sit in a bin for three years. They actually need to sell that wheat in order to pay their bills,” she said.

Hennings says losing a customer like China has a negative long term impact as well.

"The way you get markets is long standing relationships and the quality of wheat you send over there. So when you take that out and you're not able to sell to that country anymore, or can’t provide to that country anymore, it causes...we may never get it back,” she said.

Hennings says growers are hoping for more certainty in the market once Congress ratifies a treaty with Mexico and Canada that will ensure markets for their product in those countries.