According to reports published yesterday, China has stopped buying U.S. Soybean supplies. The revelation comes after weeks of mounting trade tensions between the U.S. and China. The latest move by China, though not a tariff, has the potential to have a direct impact on North Dakota soybean farmers.
At the time of the tariff threats and potential trade war escalation, Republican lawmakers tried to have it both ways in farm states like North Dakota. Congressman Kevin Cramer flip-flopped on his stance by first softly standing with farmers in his state, then changed course and rushed to President Trump’s defense. He accused farmers and political opponents of hysteria.
Everyone – Republicans and Democrats – was hoping a cooling-off period would ease tensions and our farmers wouldn’t be used as pawns. Yesterday’s report indicates that may not be happening.
As the market waited for the measure to take effect, there was some hope among traders and shippers alike that relations between the nations could ease in the meantime and the trade flow would continue. But that doesn’t seem to be the case, at least for now.
There is still potential for an indirect supply of U.S. soybeans being received by China. Other countries like Canada could buy our soybeans. China in-turn can then buy from Canada. So the argument that China is still going to be getting our beans may hold. Sort of. The bottom line is if this is the scenario it still has a cost to farmers in our state. The additional cost of transportation and other expenses will be placed on their shoulders.
At a time when the farm bill is being held up in Congress by ideologues like Cramer and low commodity prices, these unexpected changes in trade are the last thing our farmers need. We need better predictability and a legitimate roadmap to stability and success. Calling for leadership with a plan while giving updates to our neighbors isn’t “hysteria” as suggested earlier.
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