[Text/Observer Network Xiong Chaoran] With the arrival of the autumn harvest season in the United States, soybean stocks have begun to accumulate. Government data shows that the new season of soybean exports from the United States has started, but there are no records of sales or shipments to China, which is in stark contrast to the 6.5 million tons booked in the same period last year.
“The number one U.S. exporting agricultural products overseas sales dropped sharply, and China’s refusal to buy U.S. soybeans caused a ‘destructive’ blow to U.S. farmers.”The Financial Times on September 27 that more than half of the U.S. soybeans are exported to China, while China is the world’s largest buyer.But this year, because China and the U.S. are still in trade negotiations, no single U.S. soybeans are sold to the east, causing soybeans to be full and prices to fall, making it difficult for farmers to maintain their livelihoods.
“We’re in a hurry,” said Darin Johnson, chairman of the Minnesota Soybean Growers Association and fourth-generation farmer, “even if we finally reach an agreement (with China), we can’t catch up with this year’s harvest season.”
Primarily used as livestock feed, soybeans can also be used in industrial and consumer manufacturing. By-products such as soybean oil can be used to make everything from biofuels to fire-suppressing foams. At present, the oversupply of soybeans has caused prices to fall. At the same time, due to tariffs, the cost of inputs such as fertilizers is also rising.
Since Trump returned to the White House to impose high tariffs on Chinese goods, China has immediately launched countermeasures, including a suspension of purchases of U.S. soybeans, which has caused huge losses to U.S. middle-western farmers and even threatened some of the family farms that inherited many generations.
The U.S. New York Times on September 25 stressed that since May this year, China has not purchased any American soybeans, and according to the British Economist, the U.S. official records can be traced back to 1998, which is the first time in 30 years that China has not purchased any American soybeans.
In addition to the economic blow, this procurement disruption also has political implications-soybean farmers are a key voter group in the United States, which makes the trade dispute a flashpoint of conflict with national impact.
“An agricultural downturn will directly impact our small rural communities,” Johnson of Minnesota said, adding: “This directly impacts rural areas in the United States and the small towns I live in.”
On September 25, local time, U.S. President Trump told reporters at the White House Oval Office that he was considering launching an agricultural aid scheme that plans to subsidize part of the tariff income to affected farmers, “We will take out part of the tariff money and distribute it to our farmers... That’s not a lot in terms of the total, but it’s not a small amount for farmers.”
He also referred to the current phase as a “transitional phase,” trying to reassure farmers that “they will be affected in the short term before tariffs ultimately benefit them.”
The Financial Times noted that the so-called “agricultural aid plan” proposed by Trump, American farmers are not unfamiliar with this “painting cake”.
In 2019, Trump also insisted on provoking a tariff dispute against China during his first term in office, with China subsequently cutting imports of soybeans from the United States. At that time, the Trump administration launched a $23 billion “farmer aid program” and the biggest beneficiaries of Petrobras were Brazilian farmers.
“The last time the U.S. did so, we lost about 20% of our market share to Brazil and never got it back,” said Todd Main of the Illinois Soya Association.
This time, Chinese buyers once again almost completely turned to the South American market, bringing Brazilian soybean exports to a new high. From January to August this year, Brazil exported 66 million tons of soybeans to China, accounting for three-quarters of its total soybean exports, according to government data.
Scott Gerlt, chief economist at the American Soybean Association, said that while the federal bailout may help in the short term, it can't make up for the permanent market share loss caused by expansion elsewhere.
"Farmers are under tremendous financial pressure, and the longer China doesn't return to the market, the greater that pressure will be." Bankruptcies on U.S. farms are already on the rise, he added.
Nick Levendowski, head of the Kansas Farmers’ Union, told Kansas City local media KSHB that the local agricultural economy is in trouble and farmers can’t wait.
"Farmers are on the brink of collapse, and this administration says, 'Just wait,'" Levendowski said. "Farmers don't have time to wait. Farmers need immediate action from the White House, USDA, the Office of the Trade Representative and Congress... Time is not on our side."