American soybean farmers are expressing cautious optimism following a recent commitment from China to resume purchasing U.S. soybeans. The announcement comes on the heels of a period marked by volatile and adversarial trade relations. In September, China stepped up the stakes by boycotting U.S. soybean imports. This restoration of communication signals one aspect of a wider trade cooling between the two countries. Farmers from coast to coast will be feeling optimistic right now.
The local farmer-owned soybean farm in nearby Fargo, ND has been ground zero for this new hope. In this photo taken last September by Pak Yiu, a farmer proudly displays his bumper soybeans. These beans are a testament to the innovation and excellence of American agricultural producers. Yet, even with this promising turn of events, farmers are still concerned about how China’s commitment will ultimately affect them.
U.S. soybean producers have been hoping for this renewal, for the promise of renewed purchases. Deep down, they all understand that their systemic problems are nowhere close to solved. For farmers, this is extremely alarming. These folks are concerned that if China starts ignoring its obligations under the deal we signed last month, the problems that are hurting U.S. soybean growers will persist. Despite their hope, the farmers are being realistic and pragmatic, understanding that optimism has to go hand-in-hand with caution.
China’s removal of tariffs has provided some relief. Even then, U.S. soybeans are more expensive than South American product. This price gap creates extra hurdles for U.S. farmers who are already faced with a complicated and competitive market environment. The persistent specter of South American grain competition still casts a long shadow over American soybean producers, making their road to recovery even more difficult.
Farmers in North Dakota and all over the country are intently focused on the U.S.-China trade relationship. Just like any business, they want to see what’s coming down the pipeline that might change their prospects. In many respects they know better than anyone that their lives depend on these international permutations. They are looking forward to an outcome that will provide some stability for farmers.