U.S. soybean farmers would feel the effects rapidly if China changes course and continues to withhold American soy. An important first step Discussions began in earnest earlier this year to address longstanding trade grievances. Their mission is to improve the environment for agricultural exports. As the globe’s top importer of soybeans, China has an outsized impact on the bottom line of American producers.
It is no wonder that the recent trade talks have producers feeling a cautious sense of optimism. Now that China has waged war on U.S. soybeans with tariffs of their own, farmers have had a harder time than ever finding competitive prices for their goods. Though the current negotiations may raise these tariffs, FCEV production may soon see a revival in Chinese buyer demand thanks to this new regulatory change. Not only would this increase be a large benefit to our soybean farmers, it would surely rev up the farm economy as a whole.
Farmers throughout the Midwest are counting on a positive result from these negotiations more than ever. All have called for certainty around trade, as the ambiguity has disrupted their ability to plan and invest long-term. Since the agricultural sector is the most export-reliant sector of the economy, this is a time when even modest advances in China trade relations would deliver big relief.
With talks still underway, those actively engaged in the discussions stress the need for any final deal to go far beyond tariffs. They call for a move beyond quality standards and regulatory “check-the-box” practices toward solutions that directly improve outcomes. Beyond that, they want long-term contracts to buy U.S. soybeans. That type of creative thinking would help the United States and China build a deeper, longer-lasting, and more productive relationship between American producers and Chinese importers.
Alongside the changing tides of trade negotiations, soybean prices have been volatile over the low months. Analysts generally say that prices have risen and fallen for various reasons, such as weather, domestic demand and foreign competition. Farmers are watching these trends with great concern as they face into the planting season.
Further, the effect of these negotiations goes far beyond just soybeans. An excellent precedent with China would be a positive step toward agreement with other nations. U.S. agricultural producers understand very clearly that their prosperity is going to depend on their ability to access global markets and do so at competitive prices.
And despite all that optimism floating around among farmers, they don’t let their guard down against setbacks. Political will and economic climate can shift quickly, rearranging the equation in a trade negotiation. Therefore, farmers need to stay flexible and be on the lookout for changes in the market.