WASHINGTON, D.C. (RFD NEWS) — Justices on the Supreme Court of the United States (SCOTUS) are expected to release more opinions on Wednesday regarding President Donald Trump’s controversial tariff-based trade policy, and the markets are eager to see what they have to say.
Justices started the week by releasing several opinions, but so far, none have addressed the President’s use of tariffs. Typically, there is no telling when a SCOTUS decision will be handed down until shortly before it is issued, but officials with the SCOTUS Blog said more opinions are on the way as of Wednesday morning.
Economists have been waiting for the Court’s decision on tariffs since they were handed the case last September. Arlan Suderman at Stone-X tells RFD NEWS that if tariffs are struck down, the protein complex would likely be the first to feel the effects.
“When you look at the proteins and meats that we import, it’s a substantial amount since we’re down on beef numbers, cattle numbers now, because of the multi-year drought in the west,” Suderman said. “We import a tremendous amount of beef, particularly from Brazil, but also Australia, etc., and so if you lose the ability on the tariffs, we could see a big impact there, where we would see a surge of imported meat come in to hurt our domestic producers. Might be good for the consumer, you’d argue, but certainly negative for our cattle industry that we’re trying to incentivize to expand right now.”
While a lot is riding on what the high court decides, Suderman says the White House does have a “Plan B” to collect trade revenue. Treasury Secretary Scott Bessent has said in recent weeks that a ruling against the White House would be a loss for the American people.
On the other hand, U.S.-China trade relations are a good example of how tariffs have stalled the export of key U.S. commodity crops, such as soybeans. Some analysts now believe China fulfilled its 12 million metric ton soybean commitment from last year, but one trader says it could all be for nothing with South America in the picture.
“They deem to continue those purchases, to continue to build that optimism, and to do so, they would need to lift their import tariffs of 10%,” says Sam Hudson. “If they did that, I think it would provide a better avenue. But in the background, we’ve got the South American crop, growing somewhere between 170 and 180 million metric tons. The details after that don’t matter a heck of a lot when you’re going to be up against that no matter what happens here this spring.”
If analysts are correct and China has fulfilled its current soybean commitment, there is still a long way to go. China is still on the hook for an additional 25 million metric tons each year through 2028, although the Chinese government says it has not signed any kind of formal agreement on that front.
While growers wait to see if China will fulfill those totals, other economists are turning their attention elsewhere. Dan Basse, founder and president of AgResource, tells RFD NEWS it is time to rethink China’s role.
“We think China’s mature,” Basse says, speaking at an ADM Investor Services event in Nashville last weekend. “As you think about their soybean demand going forward, it’s probably going to be between 95 and 110 million metric tons. This year, we think USDA’s is too high and will come down. China is satiated with soybeans right now. Their livestock herds are declining. Their hog herd is coming down. I think we need to think about China no longer being that growth engine that it has been since 2001, when it entered the WTO. We now need to think about others — India, Africa, Southeast Asia, Bangladesh, Vietnam, Thailand. China is no longer a growth market, and American farmers need to get beyond China. But in the world soybean market, China still imports roughly two-thirds of all soybeans.”
Bosse believes better times are ahead for farm country, emphasizing the importance of keeping brokers informed about the headlines shaping today’s ag economy.
“I believe that the brokers that are here, or people in agriculture, need to understand the landscape of agriculture,” Bosse said. “And I need to kind of turn them into ambassadors in terms of, you know, what are we going to do for the farmer? What should the farmer be thinking about? And in this case, you know, my mind really goes back to thinking about the back end of the futures markets and prices above break-even and how farmers need to sell and defend to manage their risk and stay in business. Agriculture is a cyclic business, and there are times of highs and lows. We’re just in one of those lows, and so for the next year or two, we need to keep farmers in business for the better times that are likely ahead from policy changes down the road.”
Basse adds it is important for brokers to keep in mind the average price of corn is $4.65 per bushel, and beans are $10.70. When markets get above that in the back end, brokers need to be selling something.
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