LITTLE ROCK (KATV) — Arkansas farmers may be relieved to hear that China has just agreed to resume buying soybeans from the U.S. this year, after halting imports in the spring amid the trade war between the two countries.
The loss of the Chinese market has been a major factor in the agriculture economy crisis farmers are facing.
China is the largest importer of soybeans in the world, not so long ago importing about a third of the U.S.’s annual production.
It has been used as leverage this year.
“These trade wars have created some long-term damage,” said Brandy Carroll, director of commodity activities and market information for the Arkansas Farm Bureau.
Negotiations between President Trump and Chinese President Xi Jinping yesterday appear to have gone well.
U.S. Treasury Secretary Scott Bessent says China has agreed to buy 12 million metric tons of soybeans this year, and at least 25 million metric tons each of the next three years.
“As lieutenant governor and soybean farmer, I’m certainly encouraged by President Trump being able to negotiate a deal for American farmers,” said Arkansas Lt. Gov. Leslie Rutledge.
And soybean future prices have risen in response, but that’s not enough for Arkansas soybean farmers, who are projected to lose on average $85 an acre this year.
“We saw a small jump in the prices up around $11 a bushel, but we’re going to need even more. We’ve got to get the cost down. And that’s where the next play has got to be — we’ve got to lower the cost in order to have these outputs of soybeans and to make sure that farmers can afford to pay their bills in addition to being able to sell their products,” Rutledge told KATV.
And then there’s the question of whether the trade deal with China is followed up on.
“You know final sales can be cancelled — and are, all the time,” Carroll said.
Arkansas soybean farmers are also facing greater global competition.
China has been investing in other soybean exporters’ infrastructure to meet its needs, and recent trade wars have allowed countries like Brazil and Argentina to gobble up what used to be the U.S.’s commanding market share.
“They rely more on Argentina and Brazil, so it is going to be tough to maintain that market share — to get back to where we used to be,” Carroll told KATV.
“We’ve got to invest now. We’ve got a three-year deal from China. Let’s take advantage of these three years. Let’s put the investment in. America must look at other opportunities to invest in our own infrastructure — to have more crushing plants for soybeans,” Rutledge said.
Any doubts aside, the news of China buying soybeans again came at a good time. It’s harvest time and peak export season for U.S. soybeans.
