Relations have been, and still are, rocky between the U.S. and China. That much is obvious. It has been a full six months since China retaliated against President Trump’s 25 percent tariff on $34 billion worth of Chinese goods. That tariff, which took effect July 6, 2018, has rocked the foundation of a decades-old trade relationship U.S. soybean farmers built with China, the largest market for American beans. And, it has resulted in halted sales, plummeting crop prices, and a lack of security for farmers seeking funding for the 2019 season, according to the American Soybean Association.
Davie Stephens, a soybean grower from Clinton, Kentucky, and president of the American Soybean Association, stated, “We are anxious to see real progress to end this trade war quickly. With Ambassador Gregg Doud of the Office of U.S. Trade Representative (USTR) and Under Secretary Ted McKinney of the United States Department of Agriculture (USDA) among the delegation in China to discuss trade, we are hopeful that real progress is forthcoming.” Stephens continued, “This has been a long and costly half year for farmers, and we need stability returned to this market. We cannot withstand another six months.”
The value of U.S. soybean exports to China has grown 26-fold in 10 years, from $414 million in 1996 to $14 billion in 2017. China imported 31 percent of U.S. production in 2017, equal to 60 percent of total U.S exports and nearly one in every three rows of harvested beans. Over the next 10 years, Chinese demand for soybeans is expected to account for most of the growth in global soybean trade, making it a prime market for the U.S. and other countries.
U.S. soybean growers have realized a nearly 20 percent drop in soy prices since the threat of tariffs began last summer, and the future of soy growers’ relationship with China continues to be in jeopardy. In addition, China has found new imports from other exporting countries, particularly Brazil.
In good news this week, China has confirmed five genetically modified crops for import, the first in about 18 months in a move that could boost its overseas grains purchases and ease pressure from the United States to open its markets to more farm goods, according to Reuters.
With the completion of this review in China, the industry can proceed with commercialization of a Liberty tolerance trait from BASF and Bayer’s TruFlex trait. Once these two traits and Corteva’s Optimum GLY are fully commercialized, the industry expects Canadian growers will produce $400 million more canola every year using the same amount of land – a step-change for canola productivity. New seed genetics in combination with the new traits will improve yields, weed control, disease resistance and resilience to heat, cold, drought and excess moisture, as well as agronomic factors like reduced harvest loss, according to Canola Council of Canada.