USDA data casts doubt on China's soybean purchase promises touted by Trump

OMAHA, Neb. (AP) — New data the Agriculture Department released Friday created serious doubts about whether China will really buy millions of bushels of American soybeans like the Trump administration touted last month after a high-stakes meeting between President Donald Trump and Chinese leader Xi Jinping.

The USDA report released after the government reopened showed only two Chinese purchases of American soybeans since the summit in South Korea that totaled 332,000 metric tons. That's well short of the 12 million metric tons that Agriculture Secretary Brooke Rollins said China agreed to purchase by January and nowhere near the 25 million metric tons she said they would buy in each of the next three years.

American farmers were hopeful that their biggest customer would resume buying their crops. But CoBank's Tanner Ehmke, who is its lead economist for grains and oilseed, said there isn't much incentive for China to buy from America right now because they have plenty of soybeans on hand that they have bought from Brazil and other South American countries this year, and the remaining tariffs ensure that U.S. soybeans remain more expensive than Brazilian beans.

“We are still not even close to what has been advertised from the U.S. in terms of what the agreement would have been,” Ehmke said.

Beijing has yet to confirm any detailed soybean purchase agreement but only that the two sides have reached “consensus” on expanding trade in farm products. Ehmke said that even if China did promise to buy American soybeans it may have only agreed to buy them if the price was attractive.

The White House did not immediately respond to questions about the lack of Chinese purchases and whether farmers can still expect a significant aid package like Trump promised earlier.

The Chinese tariff on American beans remains high at about 24%, despite a 10-percentage-point reduction following the summit.

Soybean prices fell sharply by 23 cents to $11.24 per bushel Friday. Ehmke said “that’s the market being shocked by the lack of Chinese demand that was confirmed in USDA data today.” Prices are still higher than they were before the agreement when they were selling for $10.60 per bushel, but the price may continue to drop unless there are significant new purchases.

Before the trade agreement, Trump had said farmers would receive an aid package to help them survive the trade war with China. That was put on hold during the shutdown, and now it's not clear whether the administration will offer farmers aid like Trump did in his first administration.