China Trade Deal Leaves Agriculture Questions Unanswered

Now that the relief of having a trade deal with China has sunk in, giving a boost to soybean futures, persistent questions are coming to the fore from the ag sector.

According to U.S. Treasury Secretary Scott Bessent, China has agreed to purchase at least 12 million metric tons of U.S. soybeans by the end of 2025 and at least 25 million metric tons annually for the next three years (2026-2028) as part of its new trade deal. At this writing, an official source from Beijing has yet to confirm those figures.

The agreement also includes China resuming trade in other U.S. agricultural products, like sorghum and hardwood logs.  Soybean futures pushed past $11 a bushel for the first time since July 2024, according to Trading Economics. However, ag observers note that while this is positive news, those Chinese commitments are still below historical purchase volumes. Figures from the U.S. Department of Agriculture from before the government shutdown estimate that soybean farmers will face a net operating loss of about $100 per acre this year.

Beijing has confirmed that China will suspend retaliatory tariffs on U.S. imports, including duties on farm goods, after last week’s meeting of the two countries’ leaders, but imports of U.S. soybeans still face a 13 percent tariff. That leaves Brazilian beans still cheaper than U.S. soybeans.

The ongoing shutdown means that reliable figures to chart whether China is keeping its promises won’t be available for a while. During President Donald Trump’s first term, China committed to buying a certain amount of soybeans under the Phase 1 agreement resolving tariff disputes. But under Joe Biden’s tenure, it never followed through.

In recent days, China has stepped up its purchases of Brazilian soybeans, in part because Brazilian soybean prices eased due to the announcement of the U.S.-China trade deal. The continuing tariff was another reason. Reuters’ Joe Cash, Ella Cao and Ethan Wang quoted a trader as saying, “‘We don’t expect any demand from China to return to the U.S. market with this change. Brazil is cheaper than the United States, and even non-Chinese buyers are taking Brazilian cargoes.’”

State soybean associations are calling on Trump to release $12 billion in relief payments he promised to soybean farmers hurt by China’s response to U.S. tariffs.

In the meantime, soybean markets have not been standing still in China’s absence from the U.S. market. Economist Ken Eriksen, managing member of Polaris Analytics and Consulting, asked, “If there are firm commitments of the 12 million metric tons for this year and 25 million in future years — which would be about half or more of the current export forecasts — what will happen to other markets wanting U.S. soybeans?

“The export forecast for 2025/26 is 45.9 million metric tons and may not have China factored in it. Assuming China is not in the forecast, the question is, if China does follow through, what happens to the other countries that have filled the void left by China’s absence?”

He continued, “The United States Soybean Export Council has worked diligently with its farmers, and members that include exporters, to reach other markets. As it is, soybean ending stocks for 2025/26 are forecast to be tight at 300 million bushels. It’s not like extra soybeans can be found to fulfill China’s commitment, whatever it is or becomes, in addition to the demand from the other markets.”