American soybean farmers are feeling a wave of cautious optimism after last week’s positive news for U.S.-China trade relations. China is importing more U.S. soybeans after a long period of imposing tariffs. This move ignites hopes for more purchases from the biggest importer of soybeans in the world. Farmers have good reason to be dubious about China’s newfound, long-term dedication to such purchases. Their skepticism comes from a past failed boycott and the low-ball offers of South American grains.
Even if trade hostilities are placed on a short-term hiatus, U.S. soybeans are still dearer. They still have a bigger price tag than their South American bred counterparts. This price gap brings into question the competitiveness of American soybean producers in the global marketplace. Removing tariffs likely wouldn’t lead to a massive increase in purchases from China. China must fulfill its promises in order for that to occur.
In September, farmer Dave Dufault displayed his soybeans during Bean Day at the North Dakota State University research farm in Fargo, N.D. It highlighted the superior quality of U.S. soybeans. This farmer just didn’t know if China would resume purchases after adopting a boycott on American agricultural goods for several months. Pak Yiu’s photo splendidly embodies that harvest season state of mind. At the same time, it tells of the hope and the worry experienced by local producers.
China’s last boycott of American soybeans had a serious impact on U.S. farmers. The stressed finances and uncertain future of these ambitious projects made them even more intimidating. The latest temporary peace in the trade negotiations has led to China’s agreements to buy U.S. soybeans. Farmers say they are still wary of this dynamic. At the same time, they know their issues will continue to fester if China fails to follow through on any of its commitments.
These challenges from the world of international trade still significantly overshadow American soybean farmers. Many have already started to reap the rewards of a healthier trade climate. As The Post noted, some remain unconvinced that these changes will stick. Permitting climate conditions, South American grains have a powerful competitive advantage at the moment. This competitive edge would severely limit any recovery for U.S. soybean sales without a reversal making U.S. prices more competitive.