INVESTING CHECKOFF DOLLARS
Pause on trade war CHINA RESUMES U.S. SOY PURCHASES DURING TRADE TALKS BY MATTHEW WILDE
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ISA President Lindsay Greiner, and his son, Keaton, say raising pigs on contract adds needed income and lowers crop input costs when commodity prices are down.
30 | JANUARY 2019 | IASOYBEANS.COM
cease fire in the U.S.-China trade war came at an opportune time for U.S. soybean farmers sitting on a record crop and China with dwindling stocks. China purchased about 2.63 million metric tons of U.S. soybeans (more than 96.6 million bushels) in mid-December, weeks after the nations agreed to halt trade hostilities and work out their differences. Analysts and government officials expect China will buy more U.S. agricultural products as the countries negotiate a trade deal. China placed a 25 percent tariff on U.S. soybeans and other ag products last July in response to U.S. duties on its goods. It all but halted sales to the country and sent soy prices tumbling to 10-year lows. Trade developments are a step in the right direction, Iowa Soybean Association (ISA) leaders say. Ships full of U.S. soy heading to China will hopefully boost prices. “This is good news, it’s what we’ve been waiting for,” says ISA President Lindsay Greiner of Keota. “The U.S. placed a moratorium on new tariffs as negotiations proceed, and China responded favorably by buying boatloads of U.S. soybeans. Additional demand is sorely needed.”
The temporary trade truce Dec. 1 followed a dinner meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Argentina. Trump agreed to hold off raising tariffs, scheduled to go into effect Jan. 1, on Chinese imports worth hundreds of billions of dollars — implemented to end China’s unfair trade practices, intellectual property theft and narrow the nearly $400 billion trade deficit. China said it would negotiate structural and policy changes pertaining to intellectual property protection, forced technology transfer and non-tariff trade barriers, which have hurt the soybean industry. In the days following the G-20 meeting: • Trump tweeted: “Farmers will be a very BIG and FAST beneficiary of our deal with China. They intend to start purchasing agricultural products immediately.” • Treasury Secretary Stephen Mnuchin confirmed in a CNBC interview that China has offered to buy about $1.2 trillion worth of U.S. products. • National Economic Council Director Larry Kudlow said he’s confident the nations will resolve their differences and
