China Stops All Purchases Of U.S. Agriculture Products As Trade Wars Rage On
Just as there was a little positive news coming from China regarding planned U.S. China negotiations, China threw a wrench into that.
Former Lieutenant Governor of Iowa Patty Judge, ‘says it’s going to be a rough ride for U.S. farmers. Judge said despite talks in the past to repair the trade wars, she doesn’t believe the outlook will be better.
Agriculture has been the bargaining point between the U.S. And China for the last year. As China backs out of all purchases, U.S. Farmers are going to lose untold amounts of revenue. China has always been the largest customer of U.S. Farmers, with this loss it is completely devastating to the industry.
Deere farm equipment and like companies will also be impacted by this latest blow. The industry has been crippled due to mother nature’s non stop rains and flooding. With this turn of event, it’s feared that many farmers will not be able to survive this loss.
If China Continues to block all U.S. Agriculture purchases, it would Cause Chaos Among All Sectors
Pat Westhoff the director of Food and Agriculture Policy Institute of the University of Missouri is fearful. Westhoff says, “Sales have already been lower this crop year due to existing tariffs.”
Westhoff went on to explain, ‘we went from some tariffs to no sales at all to China, it’s a devastating blow.’ The U.S. Census reported that China bought 5.9 billion dollars of U.S. agriculture products from the in 2018.
China is the world’s largest buyer of soybeans, and was responsible for 60% of U.S. soybeans sales last year. Westhoff said the sale price of soybeans has dropped over 9% in just the year since the trade wars began.
From the period of September 2017 to May of 2018 China bought close to 30 million tons of soybeans. During the same exact time period in 2018 to 2019, the amount dropped to only 7 million tons, that’s a 70% drop.
Experts Warn As The Demand For Soybeans Falls Off Farmers Plant More Diverse Crops
Westhoff warned of another prevalent issue surfacing due to the China pulling a plug on sales. It is believed that there has been a 4 billion dollar loss in sales due the trade wars. That number was reported before China announced that it will completely stop buying farm and agriculture products.
Experts throughout the industry say that the lack of soybean sales to China, forces farmers to plant more diverse crops. Perhaps crops like corn, which will then lower the price of corn, because of the over saturation of that crop.
Former Lt Governor of Iowa Judge says, ‘this is all setting up to be a very dangerous situation.’ Judge added, “there are going to be some very serious repercussions for farmers. Judge also explained that the trade agreements with Canada and Mexico are not solid yet either. Which also creates huge concerns for markets across the board.