WILTON, IOWA (RFD-TV) — U.S. soybean farmers are looking for more certainty in the U.S.-China trade relationship as the two countries extend their existing trade truce for another two months.
American Soybean Association (ASA) Vice President Dave Walton joined us on Friday’s Market Day Report to share why the group wants continued progress in negotiations, including removal of China’s 10 percent tariff on U.S. soybeans.
“That’s the bottom line,” Walton said in his interview with RFD-TV.
China Soybean Commitments Remain Key Market for U.S. Soy
China has committed to buying 25 million metric tons of U.S. soybeans annually through 2028. Walton said the latest figures he has heard put Chinese purchases at roughly 15.5 million to 16 million metric tons.
“They are making good progress there,” he said, noting that China meeting its commitments is critical because roughly half of U.S. soybeans are exported, with China remaining the world’s largest soybean market.
“It’s really important that we get back to those levels that we had prior to the trade dispute, Walton said.
He added that 25 million metric tons is a baseline the industry would like to see extended and even increased.
Farmers Still Face Pressure on Both Costs and Prices
Walton said trade uncertainty is only one part of the financial pressure soybean farmers face.
“We’re getting hit on all sides, really,” he said, pointing to higher fertilizer and other input costs.
Relief on the price side would help ease the margin pressure producers are facing, he said.
Stable Chinese Demand Would Help Farmers Plan Ahead
Walton said inconsistent Chinese buying has made it more difficult for farmers to plan.
“We saw the whipsaw effect on price and just trying to make plans for the future,” he said.
If China follows through on its purchase commitments, Walton said U.S. farmers would have a more stable buyer.
“When they’re in and out and in and out, really we have to kind of go across the rest of the world and find buyers for those soybeans,” he said.
Domestic biofuel demand has provided some support, but Walton said the industry still needs China as a major buyer.
More Trade Issues Remain
With the truce extended, Walton said ASA will continue watching soybean purchases, tariffs and other trade barriers. He specifically pointed to Section 301 tariffs related to shipping as another issue the organization wants resolved.
“Really, at the end of two months, we’d like to see real, real progress towards an end to this,” he said.
Walton said the two-month extension could give countries more time to negotiate a longer-term agreement.
Wet Weather Delays Harvest in Iowa
Trade negotiations are not the only uncertainty facing Walton. Wet conditions have also delayed harvest on his Iowa operation.
“It’s wet,” Walton said. “We’re raining here again this morning, so we haven’t harvested anything yet.”
He said some soybeans are ready, but producers need several days of sunshine to get back into the field.
