Soybean farmers are worried about making a profit on their crop this year as China is not buying American soybeans.
China has been a top importer of American soybeans for decades, but following tariffs on imported goods imposed by the Trump Administration earlier this year, the country has turned to South America.
According to the U.S. Department of Agriculture, China accounted for 51 percent of soybean exports from the United States last year, purchasing over $12 billion.
This year, between January and May, China spent $2 billion on American soybeans. Between June and August, China didn’t buy any American soybeans.
While the U.S. has recently struck trade agreements with Taiwan for soybeans and corn, Don Lamb, director of the Indiana State Department of Agriculture, said the gap in the market left by China is hurting already struggling grain farmers.
“They've been such an integral part of our market in the past,” Lamb said. “It's impossible for any one trade deal, such as Taiwan, to make it up for that.”
The USDA expects farmers to produce around 4.3 billion bushels of soybeans this harvest season. However, the export forecast has been reduced by 1.69 billion bushels.
For years, China has been importing soybeans and grains from South America and the U.S. Now, it is importing record amounts from Brazil and none from the U.S.
Between January and August, China bought 2.4 billion bushels of soybeans from Brazil, accounting for 76 percent of the country’s soybean exports. In August, 85 percent of Brazil’s soybean exports were to China.
Lamb said the lack of trade agreements with China has worsened the market for grain farmers.
“The market is really tough right now,” Lamb said. “Corn and soybean farmers in particular are struggling financially with making this work.”
Lamb said American grains are of better quality, but the U.S. cannot currently compete with the quantity of soybeans produced by Brazil.
Earlier this week, Taiwan signed new trade deals for American soybeans, including a couple in Indiana. The Taiwan Vegetable Oil Manufacturing Association signed a letter of intent with the Indiana Soybean Alliance, agreeing to purchase $4.2 billion in soybeans over the next four years.
“There's a lot of effort being put into creating as many other markets as we can develop, just to help offset what we're losing from China,” Lamb said.
China has not been a top importer of Indiana soybeans since 2022. Instead, Indiana processes many of its soybeans into oils and other products and exports soybeans to South Korea, Japan and Taiwan, according to the USDA. However, Lamb explained the price point for soybeans is set by the Chicago Board of Trade on a nationwide level.
In addition to the loss of trade deals with China, high farming expenses paired with low crop prices are causing financial struggles for farmers, according to Lamb.
“Farmers are at the will of the input suppliers on cost, and we're at the will of the Chicago Board of Trade on our returns,” Lamb said.
Lamb explained that harvest season is the point when farmers have spent money on planting and raising their crops, and they are waiting for the crop price to be profitable. The USDA forecasts soybean season average price to be $10 per bushel, down nearly $5 since September 2022. He said grain farmers are feeling negative right now.
“You get yourself to a point where you can't afford to put out another crop,” Lamb said. “There will be some farmers that will get out of business based on this.”