Export boom to China boosts U.S. agriculture sector

Donald Trump’s trade war with China left American farmers dependent on government financial support to survive, but China is now at the center of a shift in farmers’ fortunes as booming exports and rising food prices drive a recovery in the agricultural economy of USA.

The North American nation is on its way to send Farm products to China worth a record $ 37.2 billion this year, led by the sale of soybeans, corn, tree nuts, beef, wheat and poultry, according to the forecast of the US Department of Agriculture (USDA, for its acronym in English). The sum is equivalent to 23 percent of total US agricultural exports, estimated at $ 164 billion.

Increased demand for ChinaAlong with constraints in corn and soy supplies from a drought in Brazil, it fueled an increase in world food prices, providing an additional boost to US farmers.

“Things really took a turn,” he said. Mark Wilson, a corn grower from Toulon, Illinois. “It looks pretty good right now.”

American farmers received unprecedented government subsidies after China responded to Trump’s tariffs with punitive levies on American agricultural products in 2018. An expected temporary relief in early 2020, when Beijing committed to massive agricultural purchases under a trade deal With the US, it quickly disappeared as the pandemic spread, prompting Washington to provide more aid.

Government payments pushed US net farm income in 2020 to its highest level since 2013, adjusted for inflation. The economists of the USDA they expect revenues to fall 8 percent as many of those payments disappear in 2021. But at $ 111.4 billion, the total will still be 21 percent above the median annual income between 2000 and 2019.

Soy, which is ground to produce pig feed and vegetable oil, has historically been the largest US agricultural export to China. But the Asian nation also entered the U.S. corn market in a big way, with 23.2 million tonnes shipped or booked for the business year ending in August, compared with less than 200,000 tonnes five years ago, according to data from the government.

Corn and soybean prices this spring approached record highs when a brutal drought in the summer of 2012 devastated US production. While the growing season is at the beginning, analysts are expecting healthy harvests this year, allowing farmers to take advantage to sell soybeans at more than $ 15 per bushel (27.22 kilograms) and corn above $ 6 per bushel. (One bushel of corn equals 25.40 kilograms).

“The financial aid was just a band-aid to help us get through the storm, we always hope to see this type of demand and these types of prices,” he said Dave Walton, an Iowa corn and soybean grower. “We have decent conditions, we just put the crop in the ground and it looks great right now. So there are many things to be thankful for ”.

Strong sales from the US agricultural belt to China come as tensions between Washington and Beijing intensify. In recent days, the administration Biden declared dozens of Chinese companies off-limits to US investors on national security concerns, while most of Trump’s tariffs on Chinese goods persist.

Beijing promised to import at least $ 80 billion of U.S. agricultural products over two years in its early 2020 trade deal with the White House. China was 22 percent short of its commitment for 2021 in April, but “quickly regains ground,” according to the American Farm Bureau Federation, a lobbying group.

Joseph Glauber, a former chief economist at the US Department of Agriculture, was reluctant to attribute the increase in sales to the preliminary trade deal. He pointed to the country’s partial recovery from African swine fever, which decimated the country’s pig herds, as a force behind demand for feed grains.

“I don’t think this is a temporary phenomenon,” Glauber said. “I think China will continue to be a very strong importer.”

The trade war that began in 2018 made parts of the agricultural industry wary of dependence on Chinese purchases. John Baize, a consultant to the US Soybean Export Council, said diversifying demand was a “primary goal,” with the industry spending on marketing in Southeast Asia, North Africa and the Middle East.

“We are very dependent on China right now,” he said. Baize. “But, you know, China is also very dependent on the rest of the world for its soybeans.”

The American Farm Bureau Federation he said he will not pressure Washington for more subsidies. “We are not in the business of asking for money or alleviating suffering when things are better,” he said. Veronica Nigh, an economist at the federation, adding that if exports “fall”, farmers will need more help.

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