Phase One of China Trade Deal Won’t Save U.S. Soybean Farmers: Chief Economist, Farm Bureau
Chief Economist with the Farm Bureau John Newton said that the success seen by the U.S. soybean industry over the past 20 years has been indelibly tied to China. Since China joined the World Trade Organization, U.S. soybean exports came close to doubling to exceed 2 million bushels for the 2017/18 marketing year, and U.S. soybean acreage increased by 20 percent, or 15 million acres, in 2018.
However, a widespread outbreak of African swine fever in China, and an ongoing trade war that has seen soybean prices drop to as low as $8 per bushel, have served a double-hit to U.S. farmers who are not only seeing prices drop, but stockpiles growing larger. Newton said that even if Phase One of a possible cease-fire between the U.S. and China is achieved, it will likely result in a short-term rebound on prices, but in the long-term, U.S. farmers will still lose out as China develops new long-term supply lines. In the following article, Newton closely examines the state of the U.S. soybean industry, current trade economics, and the fallout for U.S. growers.