Negative impacts are still being felt by US soybean producers as trade disputes between China and America continue following the recent Chinese tariffs on American soybeans.
We’ve previously reported that Iowa Farm Bureau Director of Research and Commodity Services Dave Miller met with Chinese officials from the China Feed Industry Association and the China National Association of Grain Sector. He points out that even though the Chinese government believes they can adjust and find other countries to purchase soybeans from, Miller believes China still needs large quantities of soybeans.
“We think there’s a gap of about 20-million-metric-tons, which would be about 700,000-million bushels (of soybeans). If they didn’t buy any US (soy)beans that they would have to find a way to adjust that many beans out of their market. They import normally about a little over 1 billion bushels from the US. We think they can get an extra 200-300 million (bushels) out of Brazil and Argentina.”
As far as the stock market goes, Miller says commodity prices continue to take hits from the tariffs and trade negotiations.
“The frustrations we obviously have from US producers that are feeling the pain of (a) decade of low prices. I mean we’re looking at soybeans prices the lowest they’ve been in at least ten years, corn prices close to the low they’ve been in ten years, hog prices that are 50-percent or more off their highs from a year or two ago, and cattle prices that are down somewhat. So we’re looking at some depressed prices in the ag sector across pretty much every sector.”
Miller adds that one way he thinks the negative impacts could be slowed is by diversifying soybean exports. We saw this earlier this week when President Donald Trump announced an agreement with the European Union to halt further tariff talks and allow the EU to purchase more US soybeans. However, Miller noted that the Chinese officials he spoke with were confident that in the long-run they want to go back to their regular purchasing of US soybeans, but Miller sees the retaliatory tariffs as a politically motivated issue and not an economically motivated issue.