China's Soybean Boycott Leaves American Farmers Reeling

Strategic Insights -

As the fall harvest gets underway, American farmers are bracing for the consequences of China's retaliatory tariffs, which have made the price of American soybeans unattractive for buyers in China. The country, which bought 52% of all American soybean exports last year, has stopped buying since May, with total soybean exports down 23% this year. The absence of China as a major buyer is expected to exacerbate the situation, with farmers facing a tough few months ahead.

Key Takeaways:

  • China's retaliatory tariffs on American soybeans have made the crop unattractive for buyers in China, leading to a complete absence of purchases since May.
  • Total soybean exports are down 23% this year, with other countries like Egypt, Taiwan, and Bangladesh buying fewer soybeans from the United States.
  • The sale of soybeans in the spring and summer is always slow, but this year's slow sales are compounded by the expected bumper corn crop and concerns about storage space for grains.
  • Politicians from big farming states, like Senator Chuck Grassley of Iowa, have highlighted the harm to farmers from the trade dispute with China, calling for negotiators to reach a deal.
  • Farmers need to stop relying on China as a major agriculture purchaser, and the Trump administration is developing more international markets for American crops through trade deals.
  • The value of American soybean exports to China last year was $12.6 billion.
  • China bought 51% fewer American soybeans through July compared to the same period last year.
  • The new marketing year for soybeans began on September 1, but China's absence as a buyer has continued.
  • Argentina, which faces economic turmoil, has suspended its tax on exports of key crops, including soybeans, leading Chinese companies to buy more than one million tons of Argentine soybeans.

Sources:

  • "U.S. Soybean Exports Missing in Action as Farmers Worry About Storage Space." The New York Times.
  • Reuters.
  • White House National Economic Council.