USDA Report Challenges Trump’s Claims on China’s Soybean Purchase Commitments

OMAHA, Neb. – Recently unveiled data from the U.S. Department of Agriculture is casting doubt on China’s commitment to purchasing substantial amounts of American soybeans, a promise highly publicized by the Trump administration following a pivotal meeting between President Donald Trump and Chinese President Xi Jinping. The USDA’s report, released post-government shutdown, indicates only two confirmed Chinese purchases of U.S. soybeans since the summit in South Korea, amounting to 332,000 metric tons. This figure falls significantly short of the 12 million metric tons that Agriculture Secretary Brooke Rollins claimed China had pledged to buy by January. Furthermore, it pales in comparison to the 25 million metric tons anticipated annually over the next three years. U.S. farmers, who have long relied on China as their top customer, were hopeful for renewed trade. However, Tanner Ehmke, CoBank’s chief economist for grains and oilseeds, notes that China currently has little motivation to purchase American soybeans. This is due to their ample supply sourced from Brazil and other South American nations this year, coupled with ongoing tariffs that make U.S. soybeans pricier than their Brazilian counterparts. “We remain far from meeting the expectations set by the U.S. regarding the agreement’s potential,” Ehmke remarked. While Beijing has not confirmed any specific soybean purchase agreement, they have acknowledged reaching a “consensus” on enhancing trade in agricultural products. Ehmke suggests that even if China did agree to buy American soybeans, it might have been conditional on favorable pricing. The White House has yet to comment on the apparent shortfall in Chinese purchases or clarify whether U.S. farmers can still anticipate an assistance package. The Chinese tariff on American beans remains high at about 24%, despite a 10-percentage-point reduction following the summit. Soybean prices fell sharply by 23 cents to $11.24 per bushel Friday. Ehmke said “that’s the market being shocked by the lack of Chinese demand that was confirmed in USDA data today.” Prices are still higher than they were before the agreement when they were selling for $10.60 per bushel, but the price may continue to drop unless there are significant new purchases. Before the trade agreement, Trump had promised to offer farmers a significant aid package to help them survive the trade war with China. That was put on hold during the shutdown, and now it’s not clear whether the administration will offer farmers aid like Trump did in his first administration. American farmers have been through this before after Trump’s first trade war with China. The trade agreement China signed with the United States in 2020 promised massive purchases of U.S. crops. But the COVID-19 pandemic disrupted trade between the two nations just as the agreement went into effect. In 2022, U.S. farm exports to China hit a record, but then fell. Soybean prices are actually still a little higher than they were a year ago even without China’s normal purchases of roughly one-quarter of the U.S. crop. That’s because this year’s soybean crop is a little smaller while domestic demand remained strong with the continued growth in biodiesel production. But farmers are dealing with the soaring cost of fertilizer, seed, equipment and labor this year, and that is hurting their profits. The Kentucky farmer who is president of the American Soybean Association, Caleb Ragland, has said he worries that thousands of farmers could go out of business this year without significant Chinese purchases or government aid. China is the world’s largest buyer of soybeans. China bought more than $12.5 billion worth of the nearly $24.5 billion worth of U.S. soybeans that were exported last year. But China quit buying American soybeans this year after Trump imposed his tariffs and continued to shift more of their purchases over to South America. Even before the trade war, Brazilian beans accounted for more than 70% of China’s imports last year, while the U.S. share fell to 21%, World Bank data shows. AP Writer Didi Tang contributed to this report from Washington.