Glaub Farm Management

Mobile Menu

Importance of U.S. Soybean Exports

Recent U.S. tariffs and retaliatory actions by China have significantly impacted U.S. soybean farm prices and exports. Historically, the U.S. exported almost one out of every three field rows to China. However, that market has nearly disappeared amidst the trade tensions of 2018.

The U.S. exports approximately 60% of our soybean production, but exports dropped 41% in 2018. Exports to other countries have increased 71%, though not enough to offset the losses of the Chinese market. Interestingly, Argentina, who is a large soybean producer, has doubled its imports of U.S. soybeans, and the EU has tripled its imports.

After the G20 Summit in Argentina on Dec. 1, the U.S. and China agreed not to place any more tariffs on one another and work towards a trade deal over the following 90 days. China also agreed to resume purchase of U.S. agricultural products, including soybeans. On Dec. 12, news reports indicated that Chinese state-owned companies had purchased soybeans, but the quantity disappointed markets.

Being optimists, we think the U.S. and China will reach a trade agreement and improve economic ties—although there are major issues regarding intellectual property rights, non-tariff barriers and cyber-crime that must be resolved. However, there is growing concern that even with a comprehensive agreement, the U.S. may not reclaim its previous large share of Chinese soybean exports. The Chinese may decide to keep a more diversified soybean import market. Additionally, the Chinese have recently released new animal feed standards lowering the protein level in feed by 1.5%. Unfortunately, this move will likely reduce demand for U.S. soybeans.

Graph is from the USDA-Foreign Agricultural Service

Copyright ©2011 Glaub Farm Management. Hosting by Pleth