By Jesse Newman
China is once again the U.S.’s chief customer for agricultural goods, three years after the start of a bruising trade war that prompted American farmers to try to wean themselves off their biggest market.
U.S. agricultural exports to China in 2020 rose to 55.5 million tons and comprised one-quarter of all farm shipments, according to U.S. Agriculture Department data. China is now buying more farm goods than it did before the trade war, and U.S. agricultural officials expect Chinese demand to grow further.
Josh Gackle, a North Dakota farmer who grows corn, soybeans and other crops, said sharply higher commodity prices have allowed him to show his bankers this year—the first in six—that his farm will turn a profit.
“It’s definitely encouraging to see China back in the market,” Mr. Gackle said, adding that he plans to build a $500,000 shop on his farm for fixing equipment.
Like other farmers, Mr. Gackle had
bet big on China in recent years, planting soybeans across half his 6,000 acres. In 2018, the year the trade conflict began, U.S. soybean exports to China fell 74% by volume. Prices for the oilseeds tumbled, too, and the Trump administration launched a relief program that ultimately would dole out
more than $23 billion in aid to struggling farmers.
U.S. farmers, industry groups and government officials
hurried to woo buyers in markets beyond China, including Europe and Southeast Asia. Launching a project to make up for lost sales to China, soybean officials joined regional trade exchanges overseas and led prospective buyers on tours of U.S. farms and shipping infrastructure.
China’s race to fatten its hogs helped drive a 53% jump in U.S. soybean exports to the country last year compared with 2019, representing the second-highest volume on record and more than half of all soybean shipments, according to USDA. Corn exports soared more than 20-fold to a new high.
In the first eight weeks of this year, Chinese buyers have purchased nearly triple the amount of U.S. soybeans compared with the same period a year earlier. Prices for the oilseeds are up 64% from year-ago levels. In response, U.S. farmers are
expected to plant a record 182 million acres of corn and soybeans this spring, boosting soybean acreage by seven million from 2020, according to a USDA forecast.
Grain-trading giants that are pumping out feed ingredients for Chinese hog farmers say they expect the strong demand to continue. Chinese purchases are helping draw down U.S. corn and soybean stockpiles, prompting domestic processors to rush to lock in supplies and boosting some food prices for consumers.
“This is not a one-year phenomenon,” said Ray Young, financial chief at grain-trading firm
Archer Daniels Midland Co.
ADM 0.40% during a conference last week. Cargill Inc. said Thursday that it would plow $475 million into its U.S. soybean facilities, expanding processing plants in Ohio and Iowa and automating some loading operations in Kansas and Missouri.
Farmers and agricultural officials caution that China’s rapid return must not impede recent U.S. efforts to court buyers in other world markets.
Brian Pridgeon cradles a piglet on his farm, which raises 70,000 pigs a year. U.S. soybean exports to China jumped 53% last year as the country raced to fatten its own hog herds that were devastated by disease.
Michigan hog farmer Brian Pridgeon said China’s pork-purchasing spree is exciting. But he said he worries it will wane as China’s own production rebounds.
“We can’t just be reliant on one partner,” said Mr. Pridgeon, who raises 70,000 pigs a year.
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