China Opens Door to Resumed Ag Imports

Action likely will have little effect on Michigan farmers this year

When China suspended the import of agriculture products in August, some Michigan farmers were very concerned.

After all, soybeans are Michigan’s largest food export. Farmers across the state produced 109 million bushels of soybeans in 2018, a value of $941 million. In 2018, $185 million of the state’s soybeans were exported around the globe, according to the Soybean Promotion Committee.

Recently the freeze on exports thawed a bit.

The United States and China acknowledged that the two sides have reached some sort of trade agreement, which includes resumption of China importing agricultural products, according to the Washington Post.

 Treasury Secretary Steven Mnuchin said the agricultural purchases could scale up to $40 billion to $50 billion annually as part of a partial trade deal, potentially more than doubling the $24 billion in agricultural and related products China purchased from the United States in 2017.

While that sounds like it should boost Michigan’s farmers’ spirits, it could just result in continued status quo.

“The China market is not going to come back,” Jim Byrum, president of the Michigan Agri-Business Association, said in August after the ban was imposed. “Michigan soybean farmers will be out of luck when it comes to any future resolution” between the U.S. and China.

Sonja Lapak, communications director for the Michigan Soybean Promotion Committee and Michigan Soybean Association, said in August the China market has essentially been gone for more than a year because of the trade war, and the import ban will just prolong the industry’s loss.

Even if China lifted the prohibition on U.S. imports today, Michigan farmers might not be able to export as much as they want.

Why? Blame rain and below-normal temperatures.

This spring was disastrous for farmers and producers, as Michigan experienced the third-wettest year in the state’s history. As a result, farmers were mostly unable to get their planned crops planted, or did so in wet soil, which affected yields.

Farmers such as Andy Todosciuk, owner of Andy T’s Farm in St. Johns.

He was planting soybeans in his wet field in the spring while he discussed the state of agriculture in Michigan and the impact it would have on farmers.

“We missed the traditional planting, and it (sweet corn) isn’t even tasseling yet. It isn’t even close,” he said in August. “I usually figure we should have sweet corn by July 15th or 20th, but now it is looking late July. I can’t be sure until I see a tassel.”

According to the Wall Street Journal, farmers have seen similar trade agreements turn into disagreements before.

In December 2018, the two countries were seemingly on good terms following the G20 Summit, and China resumed buying U.S. soybeans. However, tensions resumed after the U.S. increased its tariffs to 15% on $200 billion worth of Chinese goods.

“We get this new story that we’re going to have this great deal as we had back in the spring, and then the Chinese went home, and a week later, it went away,” Blake Hurst, president of the Missouri Farm Bureau and a soybean farmer, told Yahoo Finance. “Then we didn’t have negotiations for several months, so once bitten, twice shy. We obviously have to wait and see.”

Late planting and cool, rainy weather have Michigan farmers bracing for a bad season. The soybean production in Michigan was projected at 75.7 million bushels, a 31% decrease from last year and the lowest since 2008, said Michigan Farm Bureau Field Crops Specialist Theresa Sisung.

 

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