Here’s a little story that seems to have slipped under the radar that perhaps merits a little more attention: China has stopped buying U.S. agricultural products, and that is bad news for American farmers and the companies and consumers that both supply and rely on them.
With China officially pulling out of buying U.S. agricultural products, American farmers are losing one of their biggest customers. It could be a devastating blow in an already tough year for crops and commodity prices. It may also dent U.S. gross domestic product and hurt companies like Deere, whose business is directly tied to farming in the Heartland.
“Sales have already been lower this crop year because of the existing tariffs. If we went all the way to no China exports whatsoever, that would of course result in even larger market and price impacts,” said Pat Westhoff, director of the Food and Agricultural Policy Research Institute at the University of Missouri. “Cutting China completely out of the market would be a very big deal.”
That’s our fourth largest agriculture market according to a chart further down in the article $5.9 billion dollars, out the window, down the shitter, gone like a fart in the wind, pick your pejorative. And what will we do will all those soybeans?
China made up $5.9 billion in U.S. farm product exports in 2018, according to the U.S. Census. It’s the world’s top buyer of soybeans and purchased roughly 60 percent of U.S. soybean exports last year. Westhoff estimated that soybean prices have already dropped 9% since the trade war began last July.
From September 2017 to May 2018, soybeans exports to China totaled 27.7 million tons. That number dropped by more than 70% to 7 million tons during the same nine-month period in 2018 and 2019, according to an analysis by University of Missouri.
If you read a little further down, the market for soy as animal feed here at home “has softened” thanks to floods and swine flu. So maybe Americans can finally learn to love tofu and tempeh?
As the opening paragraphs make clear that’s not just bad news for farmers—it’s bad news for companies like Caterpillar and other farm supply manufacturers.
China’s end to agricultural buying may also hurt sales at U.S. companies like Deere and Caterpillar, which rely on farmers for much of their business. Deere said in May that farmers were delaying buying products based on uncertainty. Shares of Moline, Illinois-based Deere dropped 4.8% Monday after reports that China would stop buying U.S. farm products.
Sucks to be you, John Deere! And sucks to be you, farmers! Your profit margins were already screwed by President Trump’s tariffs, climate change, and all the other pressures facing your industry, and now the guy you voted for is fucking up your lives once again!
Well the poor old dirt farmer, how bad he must feel.
He fell off his tractor, up under the wheel.
And now his head is shaped like a tread, but he ain’t quite dead.
Well the poor old dirt farmer, he can’t grow no corn.
He can’t grow no corn, cause he ain’t got a loan.
He ain’t got no loan, can’t grow no corn
He ain’t got no loan
No, I haven’t forgotten that y’all did this to yourselves. And to the rest of us, for that matter.
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