Tag Archives: soybeans

After nearly three months of negotiations, President Trump and Chinese President Xi could not reach a conclusion and bring to an end tariffs imposed on soy growers by China since July 2018, a measure that would have brought great relief to soy growers.

Davie Stephens, a soybean grower from Clinton, Kentucky, and American Soybean Association (ASA) president stated, “We are glad that talks between these two countries will continue without the tariff hike previously expected at the 90-day deadline later this week, but we need resolution and are discouraged that it’s still hard to see a tangible end in sight.”

The Chinese government has recently announced and begun to make good on government-to-government commitments to purchase American soybeans totaling around 20 million metric tons (735 million bushels), which is a positive step. However, ASA continues to push for more than piecemeal purchases and see open access to the China market restored through the removal of tariffs.

The value of U.S. soybean exports to China has grown exponentially the past 20 years, from $414 million in 1996 to $14 billion in 2017. China imported 31 percent of U.S. production in 2017, equal to 60 percent of total U.S exports and nearly one in every three rows of harvested beans. Over the next 10 years, Chinese demand for soybeans is expected to account for most of the growth in global soybean trade, making it a prime market for the U.S. and other countries.

While ASA is pleased that the Administration has announced that negotiations have been positive and will continue past Trump’s imposed 90 day window, soy growers continue to urge the Administration to rescind the tariffs and instead make soybeans a part of reducing our trade deficit with China.

China is proposing additional purchases of U.S. agriculture products of $30 billion a year in trade talks with the United States. Bloomberg reports the offer would be on top of pre-trade war levels and continue for an undefined period of time. Agriculture Secretary Sonny Perdue told reporters Thursday it was “premature” to comment on the proposal, adding he didn’t want to raise expectations.

But, if an agreement is reached, Perdue says the U.S. structural reforms can “recover markets very, very quickly.” The proposal is part of the talks between trade officials from the U.S. and China taking place in Washington, D.C. this week. In response, Arlan Suderman of INTL FCStone, expressed caution, noting “China will say what needs to be said to get a deal, but the key component will be in the verification and enforcement.” The talks face a March 1 deadline, although President Trump has recently suggested he would consider extending the deadline.

The American Soybean Association says trade talks are good, soybean purchases are good, but lifting the tariff that China slapped on U.S. soybean imports would be better.

The ASA says it’s the only way U.S. soybean producers can regain commercial access to China, their most significant overseas market. “It’s encouraging that the administration is keeping soybeans in their trade conversations with China,” says Davie Stephens, ASA President. “The Chinese Vice Premiere’s commitment to buy another five million tons of soybeans is encouraging, but it’s not the answer. We need an agreement at the end of the 90-day period that specifically rescinds the tariff that China has imposed on U.S. soybean imports.”

The ASA president says the “good-faith” purchase commitment is a positive sign that both countries are working towards the real progress that soybean producers are looking for. However, the purchases don’t offset the damage done to the soybean industry since tariffs were imposed. It also doesn’t repair the long-term damage the tariffs have done to a relationship that was decades in the making. ASA is joining other organizations in asking congressional members to help strengthen their message to the Administration that rescinding the tariffs are vital to the health of the farm economy.

WASHINGTON (AP) — Soybeans account for less than 1 percent of all the goods and services the United States sells the rest of the world.

But somehow the humble legumes are upstaging weightier, thornier issues as the Trump administration tackles trade disputes with China, the European Union and other trading partners. Critics worry that focusing on getting foreigners to buy soybeans and other U.S. goods is a distraction from the push them to make deeper economic reforms that would offer longer-lasting benefits to the United States.

The outsize importance of soybeans — mostly used as animal feed but also consumed by humans in everything from General Tso’s Tofu to soy lattes — was apparent again recently in two days of U.S.-China trade talks.

The world’s two biggest economies didn’t make much progress on their differences over the aggressive tactics — including cybertheft — that Beijing is allegedly using to challenge U.S. supremacy in cutting-edge industries like driverless cars and artificial intelligence.

But to the president’s delight, they did agree on one thing: In an unexpected deal that even surprised the top U.S. trade negotiator, China said that it would buy 5 million metric tons of American soybeans over an unspecified period.

“China as a sign of goodwill has agreed to purchase a tremendous, massive amount of soybeans,” Trump told reporters.

He said he had consulted with Agriculture Secretary Sonny Perdue and learned that “our farmers are extremely happy.”

“It’s a nice kind of olive branch,” said Peter Meyer, head of grain and oilseed analytics at S&P Global Platts.

Soybeans, which accounted for just $21.5 billion of $2.4 trillion in U.S. exports in 2017, seem to be punching above their weight in U.S. trade policy.

Farming is one of the few areas in which the United States sells more to the rest of the world than it buys, China included. Powerful lobbies represent American agricultural interests in Washington. And farmers tend to be enthusiastic Trump supporters.

The emphasis on soybeans has drawbacks, critics say. In the confrontation with China, for example, it diverts attention from the tough tech issues that divide the world’s two biggest economies and may decide whether Beijing or Washington presides over the economy of the future. And it implies that the Chinese might be able to avoid substantive concessions on their economic policies simply by agreeing to buy more American stuff and putting a dent in the massive U.S. trade deficit with China. That amounted to $336 billion in 2017 and was likely higher last year.

“There’s confusion about what the administration’s objectives are,” said Rufus Yerxa, president of the National Foreign Trade Council and a former U.S. trade official.

In a letter last week, Senate Minority Leader Chuck Schumer of New York and fellow Democratic Sens. Ron Wyden of Oregon and Sherrod Brown of Ohio warned Treasury Secretary Steven Mnuchin that any deal with China should force Beijing to end the abusive practices that put U.S. tech firms at a competitive disadvantage and to enact fundamental economic reforms that would make the Chinese market more accessible to U.S. and other foreign firms.

An agreement that settles for Chinese purchases of American goods, intended to narrow the trade deficit, would be viewed on Capitol Hill as “an abject failure,” they wrote.

Soybeans have taken a prominent place in previous Trump administration trade talks. The United States and the European Union at least temporarily backed away from a potential trade war over cars last July when the Europeans agreed, among other things, to load up on American soybeans.

America’s trading partners are well aware of the outsize influence farmers enjoy in Washington. When Trump last year started slapping import taxes on Chinese goods and on foreign steel and aluminum, they targeted their retaliation on the American Heartland, imposing tariffs on soybeans and other farm products.

China’s soybean tariffs had a devastating effect. Before the trade hostilities erupted last year, China bought nearly 60 percent of the soybeans the United States exported. Then the tariffs kicked in: In the first 10 months of 2018, U.S. soybean exports to China dropped to 8.2 million metric tons from 21.4 million metric tons a year earlier — a 62 percent freefall, according to the U.S. Department of Agriculture.

The backlog of unsold soybeans also pushed down U.S. prices, spreading more pain in farm country.

“We need some good news,” said Blake Hurst, a soybean and corn farmer in northwestern Missouri’s Atchison County and president of the Missouri Farm Bureau.

So Hurst and other farmers welcomed China’s decision to buy American beans. But their relief is limited. Hurst worries it’s a one-time purchase and not the resumption of business as usual.

China bought 31.7 million metric tons of American soybeans in 2017 and 36.1 million in 2016. Five million metric tons doesn’t do much to fill the gap.

“It’s still woefully short of what they used to do,” said Ron Moore, who grows corn and soybeans in Roseville, Illinois and serves as chairman of the American Soybean Association. “We’re not there yet.”

Even after U.S.-China trade tensions ease, soybean industry consultant John Baize said it might be a good idea for the U.S. and China to scale back their soybean trade. The economic and geopolitical rivals are likely clash again over issues such as trade, Taiwan and Chinese territorial claims in the South China Sea. Soybeans could once again be held hostage.

So Baize says the U.S. should sell more to other markets — such as Southeast Asia, Pakistan and Egypt — where demand for soybeans is growing as people earn more money and eat more meat, increasing the need for animal feed. Meanwhile, China should buy more from alternative suppliers like Brazil that probably aren’t potential adversaries, he said.

“We will wind up with more reliable customers, and they will wind up with less-disruptable suppliers,” he said.

China continues to purchase U.S. soybeans with a more than one million metric ton buy on Friday, and another 600,000 metric ton purchase reported Monday.

Following a round of trade talks last week, China pledged to purchase another five million metric tons of U.S. soybeans. Friday’s purchases by state-owned firms were believed to be destined for China’s state reserves, and thus immune from high import tariffs, according to Reuters.

The 25 percent tariffs, imposed last summer in retaliation for U.S. tariffs on Chinese goods, remain in place for U.S. soy imports by commercial crushers in China. With ongoing trade talks, China began purchasing U.S. soybeans at the end of December. China halted the purchases of U.S. soybeans when the tariff was put in place and purchased most of its needed supply from Brazil. Trade talks between China and the U.S. have a March 1 deadline.