As we continue to see the hurt in farm country, I continue to hear how we need to get China back as our key soybean trading partner. The tariffs are causing real hurt amongst farmers staring down loan payments, declines in their equity, farm liquidity and so on.
But here’s the problem that I’m really starting to believe. China is not coming back.
For the last 25 years, administration after administration here in the United States has done virtually nothing when it comes to trade and diversifying our markets. The people at various agriculture and commodity groups have done wonderful things to try and strengthen relationships and diversify our markets. But when it comes to hard lined trade deals, have we really seen anything meaningful in the last 25 years? Bush, Obama, Trump 1.0, Biden and now Trump 2.0 (although the jury is still out on many of the frameworks being announced and negotiated currently). USMCA was something. The TPP failed. What else has been meaningful?
At the administration level, we have slapped each other on the backside and said how good we are at growing the world’s best crops and everyone loves us and will never leave us. Meanwhile, China has been preparing for the moment it can walk away from sourcing the bulk of their business from us. They have been building out infrastructure in South America. Big grain elevators in Brazil with Chinese writing on the side. Roads. Rail. River systems.
All of this so when the time was right, which is apparently now, they can say we don’t need your soybeans anymore. We have what we need from South America.
And to further compound the frustration, this week’s Argentina announcement by Treasury Secretary Scott Bessent has upset the nation’s soybean farmers. In a post on X, Bessent said the U.S. would offer financial support to Argentina to help prop up its ailing economy. Argentina is a key competitor of the U.S. when it comes to the global soybean market.
Well almost immediately after the post and the announcement by the Argentine government of an export tax holiday, a reported 20 cargoes of Argentine soybeans were sold to China. It was nearly $7 billion dollars worth of soybeans! All of this while the U.S. continues to not sell any of our soybeans to China.
American Soybean Association President Caleb Ragland was not pleased with the developments. “Soybean farmers have been clear for months in saying the administration needs to establish a trade deal with China,” Ragland said. “China is the world’s top soybean customer and our top export market.”
A spokesman from the Chinese commerce ministry was asked this week when China might resume buying American soybeans. He said the U.S. should remove what China describes as unreasonable tariffs and create conditions that help expand trade between the two nations.
Reuters said Senior Chinese Trade Negotiator Li Chenggang’s meeting with leaders from the Midwest may signal the world’s second-largest economy might be willing to buy some U.S. soybeans ahead of more wide-ranging talks. “U.S. action on the unreasonable tariffs would create possible trade expansion,” said a commerce ministry spokesperson.
At the end of the day, I really feel that China is not coming back. At least in a meaningful way, to buy U.S. soybeans and other products.
I HOPE that I eat these words and they do come back. But looking forward, I hope our industry is ready to seek out new export partners AND quickly develop more domestic uses for our products. Unlock renewable diesel. Fully unleash E-15 year round. Find other new sources to grow our domestic use.
I won’t get into the talk of more farmer payments right now, but that is probably going to have to be a necessary evil at the moment to make sure we continue to have farmers in this country and food on our tables. If we don’t do something in the interim, everyone might start asking why their grocery store shelves are empty.
It seems that we are at an agricultural crossroads in the United States and I hope we figure out soon what path we are going to take.
You can hear me talk about this more during Segment Four of Friday’s episode of AOA:
China’s Not Coming Back (At Least it Seems That Way)
As we continue to see the hurt in farm country, I continue to hear how we need to get China back as our key soybean trading partner. The tariffs are causing real hurt amongst farmers staring down loan payments, declines in their equity, farm liquidity and so on.
But here’s the problem that I’m really starting to believe. China is not coming back.
For the last 25 years, administration after administration here in the United States has done virtually nothing when it comes to trade and diversifying our markets. The people at various agriculture and commodity groups have done wonderful things to try and strengthen relationships and diversify our markets. But when it comes to hard lined trade deals, have we really seen anything meaningful in the last 25 years? Bush, Obama, Trump 1.0, Biden and now Trump 2.0 (although the jury is still out on many of the frameworks being announced and negotiated currently). USMCA was something. The TPP failed. What else has been meaningful?
At the administration level, we have slapped each other on the backside and said how good we are at growing the world’s best crops and everyone loves us and will never leave us. Meanwhile, China has been preparing for the moment it can walk away from sourcing the bulk of their business from us. They have been building out infrastructure in South America. Big grain elevators in Brazil with Chinese writing on the side. Roads. Rail. River systems.
All of this so when the time was right, which is apparently now, they can say we don’t need your soybeans anymore. We have what we need from South America.
And to further compound the frustration, this week’s Argentina announcement by Treasury Secretary Scott Bessent has upset the nation’s soybean farmers. In a post on X, Bessent said the U.S. would offer financial support to Argentina to help prop up its ailing economy. Argentina is a key competitor of the U.S. when it comes to the global soybean market.
Well almost immediately after the post and the announcement by the Argentine government of an export tax holiday, a reported 20 cargoes of Argentine soybeans were sold to China. It was nearly $7 billion dollars worth of soybeans! All of this while the U.S. continues to not sell any of our soybeans to China.
American Soybean Association President Caleb Ragland was not pleased with the developments. “Soybean farmers have been clear for months in saying the administration needs to establish a trade deal with China,” Ragland said. “China is the world’s top soybean customer and our top export market.”
A spokesman from the Chinese commerce ministry was asked this week when China might resume buying American soybeans. He said the U.S. should remove what China describes as unreasonable tariffs and create conditions that help expand trade between the two nations.
Reuters said Senior Chinese Trade Negotiator Li Chenggang’s meeting with leaders from the Midwest may signal the world’s second-largest economy might be willing to buy some U.S. soybeans ahead of more wide-ranging talks. “U.S. action on the unreasonable tariffs would create possible trade expansion,” said a commerce ministry spokesperson.
At the end of the day, I really feel that China is not coming back. At least in a meaningful way, to buy U.S. soybeans and other products.
I HOPE that I eat these words and they do come back. But looking forward, I hope our industry is ready to seek out new export partners AND quickly develop more domestic uses for our products. Unlock renewable diesel. Fully unleash E-15 year round. Find other new sources to grow our domestic use.
I won’t get into the talk of more farmer payments right now, but that is probably going to have to be a necessary evil at the moment to make sure we continue to have farmers in this country and food on our tables. If we don’t do something in the interim, everyone might start asking why their grocery store shelves are empty.
It seems that we are at an agricultural crossroads in the United States and I hope we figure out soon what path we are going to take.
You can hear me talk about this more during Segment Four of Friday’s episode of AOA:
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