No American soybeans would be purchased by China since marketing year started on September 1th. These missed purchases are creating worry among U.S. farmers and traders. USDA’s latest available full-year data exposes a massive trade imbalance between the two countries. This knowledge illuminates the chronic barriers limiting their mutually beneficial economic relationship.
The deeply damaging marketing year — of which agricultural exports are a critical part — began September 1. According to recently published tracking data, the U.S. has not delivered any soybeans to China since then. This significant development was a surprise to many. As recently as a meeting on October 30, Chinese officials had committed to restarting soybean purchases from the U.S. President Donald Trump met with Chinese officials. Their hope, then, was that they could calm the trade tensions and increase agricultural exports to counteract some of the tariff impacts.
Many industry analysts had expected the commitments made at the October meeting to increase shipments. They pointed to China’s role as the number one destination for U.S. soy exports in the past as a driver of this expectation. Yet despite all of these made pledges, the recent history of purchases so far indicates dark clouds ahead in delivering on these commitments.
The U.S. Department of Agriculture’s data underscore a major crisis in our ag economy. American farmers rely on exports to be able to afford to operate their farms. China is our second largest market for soybeans. If they were to cease shopping, that would be felt deeply in the prices and general health of the housing market.
As the year moves forward, all interests in the agricultural community are keenly tuned in on what transpires in U.S./China trade relations. Further negotiations are scheduled to begin next week. Yet with the unprecedented current suspension of all soybean shipments, it begs the questions of future deals and their implementation.