Cotton growers plan to expand their plantings by a sharp 3 percent this spring, taking away land from soybeans, the most prominent casualty of the Sino-U.S. trade war, said the National Cotton Council over the weekend. Meanwhile, the USDA said the soybean stockpile will double in size by the time this year's crop is ready to harvest, creating the largest "carryover" ever.
With Trump tariff payments boosting Corn Belt farm revenue, farmer confidence shot to its highest level since last June, just before the trade war began against China, said the monthly Ag Economy Barometer published by Purdue University. Producers polled by Purdue said they expect ag exports to increase in the years ahead, an indirect sign they expect a beneficial resolution with China.
For the third day in a row, the USDA confirmed a large sale of U.S. soybeans to China, this time 586,000 tonnes. With the purchase, reported by private exporters on Wednesday, China bought 3.8 million tonnes of soybeans in three days and is well on its way to the 5 million tonnes promised during a White House meeting last week.
The tenor of Sino-U.S. negotiations is heartening but "we're still a long way" from resolving trade war between the world's two largest economies, said Agriculture Secretary Sonny Perdue at a cattle industry conference. Meanwhile, China was following through on a pledge, announced at the White House, to buy U.S. soybeans, with some trade sources putting the purchases as high as 4 million tonnes, worth $1.35 billion.
In a letter read aloud at the White House, Chinese President Xi Jinping said Beijing will buy more U.S. farm exports, a decision that President Trump hailed on Thursday as a sign of good faith in ongoing negotiations to end the trade war between the nations.
The Sino-U.S. trade war, which as stymied U.S. farm exports, "is going to be a long one, and we keep delivering the message, 'We're with you, Mr. President,'" said the leader of the largest U.S. farm group on Sunday, adding a caveat. "The runaway of our patience is going to be determined by the financial situation of our farms. We went into the battle very weak." (No paywall)
Trade officials from China and the United States discussed “China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States” during three days of talks in Beijing, said the Trump administration on Wednesday.
There are many challenges facing rural America, said the new House Agriculture chairman, Collin Peterson. "There is a new farm bill to implement, a growing economic storm in farm country to address, and the ongoing harm of a trade war to alleviate, not to mention the range of unforeseen issues that will test the mettle of the people we’re here to serve," said Peterson in a statement over the weekend.
Agriculture Secretary Sonny Perdue announced on Monday the second and final round of $4.8 billion of Trump tariff payments, meaning crop and livestock producers will collect up to $9.6 billion in cash to cushion the impact of the Sino-U.S. trade war. So far, the USDA has sent $2.38 billion in payments to producers of almonds, corn, cotton, dairy, hog, sorghum, soybeans, fresh sweet cherries and wheat.
Although ag exports are consistently larger than ag imports, that trade surplus is forecast to narrow to $14.5 billion in fiscal 2019, which would be the smallest surplus since the $12.2 billion of 2007, say USDA economists.