While U.S. and Chinese officials publicly set a goal of “meaningful increases” in farm exports, President Trump wants to more than double U.S. sales to China in the near term, said Agriculture Secretary Sonny Perdue on Wednesday. “The president has an ambition of $25 billion more,” he said, in a “two- to five-year period.”
China is already the No. 1 customer for U.S. food and ag exports, with sales forecast to be $21.6 billion this fiscal year, or roughly $1 of every $6 in ag exports. With sales worth $14 billion last year, soybeans are the largest U.S. commodity going to China.
Perdue’s description of the president’s goals jibed with Trump’s postings on social media on Monday that “China has agreed to buy massive amounts of ADDITIONAL Farm/Agricultural Products — would be one of the best things to happen to our farmers in many years!” and that it “will purchase from our Great American Farmers practically as much as our Farmers can produce.” The president was a little less exuberant on Wednesday, tweeting, “Our Trade Deal with China is moving along nicely, but in the end we will probably have to use a different structure in that this will be too hard to get done and to verify results after completion.”
The USDA was part of negotiations last week with China over reducing its trade surplus. In a joint statement, the countries said China would significantly increase its purchase of U.S. goods and services. “Both sides agreed on meaningful increases in United States agriculture and energy exports. The United States will send a team to China to work out the details.”
In last week’s negotiations, agriculture officials discussed ways to increase commodity sales but “didn’t quite get that” $25 billion, said Perdue. “But we think we can grow into that amount. We’re probably going to be at half that area right now as we … [start] working out details of that.” The talks, set to continue next week in Beijing, would address trade barriers to U.S. ag imports and China’s process for approving the sale of new GMO crops developed in the United States.
Soybeans, rice, sorghum, poultry, corn, and the livestock feed known as DDGS are on the list of U.S. products for potentially larger sales. “There’s several commodities in that basket that we’re capable of selling a lot more of to China,” said Perdue.
Reaching Trump’s target would mean a doubling of sales. “That’s the potential. You can’t do that in the next year or so,” said Perdue. Asked if it could happen over the next three, four, or five years, he referred to a “two- to five-year period.”
Since taking office, Perdue has promoted farm exports as the lever to lift U.S. farm income, which is now just half what it was in 2013 at the peak of the commodity boom. The USDA forecasts farm exports of $139.5 billion this year, which would be the fifth-highest total on record. The four best years for export sales occurred between 2013 and 2017.