Minnesota soybean growers can be forgiven if they are a little on edge lately.
About half of the 380 million bushels they produced last year were exported.
China is by far their largest customer, and Minnesota soybean sales to China reached nearly $1.2 billion in 2016.
So the risk of an escalating tariff war between the U.S. and China -- and the chance that it may suck in agricultural products -- is receiving their full attention. It would be the worst possible time to lose export markets, some say, because bumper U.S. crops for the past three years have created a national oversupply of grain that has already depressed prices.
"Right now, markets for farmers are not very good, and the grain elevator margins are very slim," said Bob Zelenka, executive director of the Minnesota Grain and Feed Association. "We can't afford any bad news on the trade front."
The chance that China may take actions to slow or restrict U.S. soybeans from entering the Chinese market is not far-fetched.
It happened earlier this month with a different grain -- sorghum -- a few weeks after President Donald Trump imposed tariffs on imported solar panels and washing machines from China and other countries. China suddenly announced that it would investigate U.S. exports of sorghum, used mainly to feed Chinese hogs, to determine whether the U.S. unfairly subsidizes sorghum producers. The one-year probe is expected to drastically reduce the $1 billion export market for sorghum growers in Kansas, Texas, Colorado and Oklahoma.
Although China gave no official reason for the sorghum investigation, trade experts including the chairman of the American Chamber of Commerce in China see it as part of a familiar pattern of the country's retaliation on trade issues, and wonder whether soybeans may be next.
"You just have to put two and two together," said Ed Usset, grain marketing specialist at the University of Minnesota. "China is good at sending messages and I think that's what is happening with these actions so far."
Adding to the tension, U.S. Commerce Secretary Wilbur Ross last week recommended stiff tariffs and other trade actions on imports of steel and aluminum from China and other nations. Trump must decide the matter, and has said that the imports have hurt U.S. producers and contributed to a widening trade deficit, costing U.S. jobs.
"It makes us pretty jittery," said Keith Schrader, a soybean farmer southeast of Northfield in Rice County. "Four rows out of every 10 that we plant go to China, so they are the big gorilla in the room."
China's huge appetite for soybeans has grown as its middle class expands and consumers demand more protein, especially pork, Usset said. The imported soybeans are crushed for cooking oil, and the soybean meal is a major component of Chinese livestock feed.
"China's soybean imports today are as big as what we produced in our entire country five years ago," he said. "The numbers are incredible, and they've done nothing but grow for two decades."
Usset said he wouldn't be surprised to see more Chinese actions if trade disputes escalate.
Su Ye, chief economist and market research leader with the Minnesota Department of Agriculture, said China would need to think long and hard about trade retaliations against the U.S. that included soybeans.
Making those changes would hurt both countries, she said, because China has grown to depend on huge soybean imports to supply its immense soybean crushing industry and its expanding dairy, cattle, hog and poultry farms.
"I'm not saying it would not happen, but using soybeans to retaliate would be a very stupid act on their part if they ever wanted to do that," Ye said.
Kent Thiesse, vice president at MinnStar Bank, said China isn't the only country to be worried about.
"Trade is very complex, and the three top trading destinations for U.S. ag products are China, Canada and Mexico," he said. "We're in negotiations or adverse trade debates with all three, and that makes most folks in agriculture a little nervous."
Some of the more contentious trade issues may have little or nothing to do with food, Thiesse said. "But because agriculture is a big part of the export-import situation, it kind of gets dragged into the mix. Unfortunately, that's their bargaining chip coming back at the U.S."
Federal estimates show that China, Mexico and Canada purchased nearly half of total U.S. agricultural exports in 2016, with Mexico the top buyer of U.S. corn.
Trump has denounced the North American Free Trade Agreement (NAFTA) that involves the U.S., Canada and Mexico and has called it a "bad deal" for the U.S. He has threatened to abandon the accord unless the three nations can agree on revisions. The agreement includes far more than just agricultural products, and critics say it also needs stronger labor and environmental standards. The next round of NAFTA talks is scheduled to begin this week in Mexico.
Usset said uncertainty about the future of NAFTA has already affected U.S. trade with Mexico, which has started buying wheat from Argentina. That makes no sense economically because the U.S. and Mexico have an efficient rail connection that has successfully transported wheat, corn, soybean meal and other products for decades.
"But if you're a Mexican wheat buyer and you're wondering where all this rhetoric is going about NAFTA, they might just decide to explore Plan B and look elsewhere, even if it does cost them more," Usset said.
Uncertainty about the future of ag exports to major trading partners is likely to continue, leaving farmers worried that sales could be lost, contracts canceled and export partnerships replaced by competitors such as Brazil and Argentina.
"We have product that we need to be sure we're moving, and when you put some of these political scenarios on top of it, it's very concerning because of the whole environment that's been created," said Patrick O'Leary, who grows corn and soybeans and raises hogs on a west-central Minnesota farm near Benson. "Export of these products is significant to us, and it's what's driving profitability for many farmers."