With China out of the market, U.S. soybean producers look abroad for buyers

A trade mission to Nigeria. A memorandum of understanding with Vietnam. Rising purchases from Bangladesh. These countries are not typically major buyers of soybeans from the U.S. farm belt. However, desperate farmers, their trade organizations, and President Donald Trump’s administration are turning to far-flung corners of the globe in hopes of avoiding an agricultural disaster caused by a trade war that has halted China’s purchases of U.S. supplies.

So far, the efforts have failed to compensate for the loss of the country’s largest customer for the crop, according to data and interviews, with financial strain spreading to tractor manufacturers and other farm-related businesses.

For the first time in more than 20 years, Chinese importers have yet to purchase soybeans from the U.S. fall harvest, forcing farmers to store their crops in the hope that prices will eventually rise from a roughly five-year low.

Globo Rural reported on the issue last month.

It’s a risky situation that delays farmers’ ability to generate cash from selling their crops at a time when they are facing rising costs for everything from labor and energy to fertilizers.

In a sign that tough times are likely to continue in rural America, Trump has pledged to donate tariff revenues to farmers, who have been strong supporters of his presidential campaigns.

On Thursday, U.S. Treasury Secretary Scott Bessent said the government would make an announcement on Tuesday regarding aid to farmers.

The retaliatory tariffs that Washington and Beijing imposed on each other’s products this year have made U.S. soybeans too expensive for Chinese buyers, prompting importers to turn to South America instead.

However, alternative markets for U.S. soybean exports remain relatively small in comparison and have not replaced China, which has long been the world’s largest importer.

Deepening crisis in Illinois

The crisis is particularly severe in Illinois, the largest U.S. producer and exporter of soybeans. Ninety-seven kilometers west of Chicago, where the city and suburbs give way to green fields, 49-year-old farmer Ryan Frieders plans to store much of his grain in silos after selling part of his expected harvest at prices below production cost.

After months of work planting seeds, fertilizing fields, and spraying herbicides, Illinois farmers are facing average losses of up to $64 per acre this year due to low crop prices and weak exports, according to estimates from the University of Illinois.

China bought about 45% of all U.S. soybean exports last year — and typically secures around 40% of its annual soybean needs from the U.S. by early October, said Ted Seifried, chief market strategist at Zaner Ag Hedge in Chicago.

U.S. soybean exports to China fell 39% by volume to 5.9 million tonnes between January and July, before the fall harvest began, according to the latest government data. In value, shipments plunged 51% to $2.5 billion, stripping billions in business from farmers.

The U.S. saw a sharp increase in exports to Bangladesh, totaling just over 400,000 tonnes — still a fraction of China’s typical demand. Despite higher shipments to Vietnam, Egypt, Thailand, and Malaysia, total U.S. soybean exports dropped 8% by volume from the same period a year earlier, to 18.9 million tonnes.

Together with industry representatives, Frieders, who farms in Waterman, Illinois, traveled to Turkey and Saudi Arabia in February to meet buyers and visit processors on a trip sponsored by the U.S. Soybean Export Council.

“There’s talk about India and expansion there, and about Southeast Asia and North Africa — those are markets of the future,” Frieders said, adding: “There’s no lost market we haven’t looked at that could suddenly explode and become a new China.”

Source: Valor Econômico

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