Farmers and economists say there is an elephant in the room when it comes to any talk about U.S. agricultural exports: China. But with no way of dealing with the beast, they are worrying about other things.
“I think everybody’s guessing (in regards to trade with China),” says Iowa Soybean Association President Lindsay Greiner. “Farmers are getting impatient.”
But Greiner says he and his fellow farmers can’t do much about the trade war between the United States and China other than to remind the Trump administration about the importance of that trade relationship.
Instead, he says, they are looking at other market opportunities and trying to address issues where they can make a difference.
There is some good news on that front, according to Iowa State University economist Chad Hart.
Although the new USMCA deal with Mexico and Canada has not yet been approved by Congress, the fact it has the approval of the leaders of each of the three nations has helped, Hart says. And a handshake deal with the European Union appears to be working so far. Exports of U.S. soybean meal to the EU have gone up fairly dramatically.
Those EU sales have been the shining star for farmers looking for good news on the trade front, Hart says.
Meanwhile, beef and pork exports are up. For pork, the quantity is up while the value is not, thanks to the shipment of lower-quality cuts. For beef, both the quality and the quantity are up, Hart says. Again, the USMCA has been an important reason for that increase, so approval by Congress will be vital.
Greiner says the way the USMCA progressed offers some hope for negotiations with China. There was deep concern about those negotiations with Mexico and Canada shortly before a deal was announced.
Soybean producers, like other commodity groups, are trying to deal with the present uncertainty by working on efforts to develop other markets in different parts of the world. For example, he says, soybean exports to the Middle East are up, and exports to Egypt are up by 300 percent from a year ago.
Still, he says he hopes that more agreements are inked soon. Sales are good and handshake agreements are good, but long-term agreements are better.
Nobody outside the negotiating room knows what is going on with China, so Greiner says farmers are stuck watching and hoping that the fact the two sides are still talking is good news.
Until then, U.S. agricultural exports to China are a fraction of what they were. For example, about 60 percent of soybean exports were going to China before the dispute began last year. Today, that figure is closer to 10 percent. That’s an 800 billion bushel shift, or as Hart describes it, all of Iowa and two-thirds of Illinois.
“You can’t understate how large that is in the trade story,” Hart says.