Trump’s Phase One China Trade Deal May Not Save Soybean Farmers

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Trump’s Phase One China Trade Deal May Not Save Soybean Farmers
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Trump’s Phase 1 China trade deal may not save soybean farmers

in October he said that China would be buying $40 to $50 billion in U.S. agricultural products. However, no time frame has been given and the details for Phase One are still being hammered out.

If China has stepped up its soybean purchases or if the market believes that it will there should have been a rebound in its price. Unfortunately, it seemed to peak right after Phase One was announced and has recently gone on a skid to under $9 per bushel.It is important to know how important soybeans are to American farmers. In 2018 the value of corn was $51.5 billion, with soybeans coming in second at $39 billion. The next largest crop was hay, a distant third at $17 billion.

However, soybean exports to China fell by 53% in the 2018-2019 marketing year or by 546 million bushels. Assuming an average price of $9 per bushel this created $4.9 billion in lost income.While there was a pickup in exports to other countries, the net impact was just under 100 million bushels or $900 million. Overall soybean farmer’s income took about a $4 billion hit from the export market.

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