Soybeans on a farm near Towanda in central Illinois Sept. 12

Soybeans on a farm near Towanda in central Illinois Sept. 12. By Sept. 1, nearly 10% of the crop was still not setting pods.

President Donald Trump touted China’s promise to buy as much as $50 billion in agricultural goods over two years in a trade deal, a boost to Midwest soybean farmers suffering from the current slump in trade. But a deadly disease in China has killed off many of the pigs who would have eaten those American soybeans, possibly putting that target out of reach.

“Meeting this target will be quite challenging because around 70% of China’s agricultural imports from the U.S. before the trade war were soybeans” and almost all soybean imported into China are used for animal feed, Nomura economists led by Lu Ting wrote in a research note. Hog stocks are down about 40% in the last year, and even though farmers are restocking it will take a while to return to earlier levels.

China aims to buy at least $20 billion of agricultural products in a year if it signs a partial trade deal with the U.S., and would consider boosting purchases further in future rounds of talks, people familiar with the matter told Bloomberg last week.

That would take China’s imports of U.S. farm goods back to around 2017 levels, before Trump began a tit-for-tat tariff feud with Beijing. In the second year of a potential final deal, purchases could rise to $40 billion to $50 billion, if Trump removed remaining punitive tariffs, said the people, who asked not to be named because talks are private.

But Chinese negotiators have made clear that their purchases will be based on real demand, and if there’s fewer animals to eat the feed, then that means imports may not rise as much as some expect.

“Even considering the rising output of poultry and other meat, we expect a 15% contraction in soybean import demand in 2020” from the level in 2017, Nomura said, even if China adds to its strategic reserves.

There’s also the question of whether American farmers would be willing and able to increase exports enough to meet the target. There’s still a lot of uncertainty in negotiations between the U.S. and China, and Nomura argued farmers may be unwilling to significantly increase plantings or divert shipments to China from other destinations if there’s a risk that China could stop buying again.

From a peak of almost 34 million tons in 2016, Chinese imports of U.S. soybeans dropped to 14 million last year. That could rise to 43 million tons over the next year, Nomura estimated, but that’s still nowhere near enough to meet the high target.

And there’s limited room to ramp up exports of other agricultural goods such as grains, pork, and other meats, the Nomura economists said, due to issues such as supply constraints and the possibility of angering other suppliers and breaking World Trade Organization rules by directing trade to U.S. goods and away from Australia, Brazil and others.

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