Coronavirus may delay ag exports to China

Feb 07, 2020

The U.S. would have to be tolerant of any hold-ups, Secretary Perdue said

By Diego Flammini
Staff Writer
Farms.com

A disease outbreak in China could delay the country from fulfilling its ag obligations in the new trade deal with the U.S.

The agreement the two countries signed in January outlined China’s commitment to purchase US$55.8 billion of American ag goods within the first two years of the deal.

But the recent coronavirus outbreak could put a hold on those increased ag imports. The disease has infected more than 28,000 people across more than 25 countries and has killed 565 people. Most of the deaths occurred in China.

The outbreak has caused multiple shipping companies to reduce the number of vessels heading to China while the country tries to manage the coronavirus situation.

The U.S. ag industry has to recognize that the coronavirus outbreak could keep China from holding up its end of the trade agreement, said Agriculture Secretary Sonny Perdue.

“If (the Chinese are) really trying and (the coronavirus) really just blows the economy out of the water, then we could have to be understanding of that,” he told reporters Feb. 5 at a cattle convention in San Antonio, Texas, Reuters reported.

The trade agreement between the two nations also includes a clause that covers unpredictable circumstances.

“In the event that a natural disaster or other unforeseeable event outside the control of the Parties delays a Party from timely complying with its obligations under this Agreement, the Parties shall consult with each other,” the deal says.

So far, the disease situation in China hasn’t affected commodity markets.

“Nothing at all; it’s all an overreaction,” said Moe Agostino, chief commodity strategist with Farms.com Risk Management.

China has taken steps to ensure products still arrive at its ports during the outbreak.

The country announced on Thursday it is cutting tariffs on more than 1,700 U.S. products.

Import taxes on soybeans will drop from 30 per cent to 27.5 per cent. Tariffs on beef will be lowered to 30 per cent from 35 per cent, and duties on pork will decrease from 60 per cent to 55 per cent.

These tariff reductions could help farmers in the future, Agostino said.

“Hogs were limit up yesterday,” he said. “If we can lower tariffs and see Chinese buying, eventually in the next 12 to 18 months the price moves will be dramatic regardless of when (the increase happens)."

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.