As the holidays approach, U.S. farmers are hoping to see a Christmas present in the form of added demand and increased exports.
In the shadow of the United States鈥 Phase One deal with China, which is set to expire at the end of the year, market analyst Karl Setzer of Agrivisor said exports have slowed down, but that doesn鈥檛 necessarily mean bearish news in the grain markets.
鈥淚t isn鈥檛 so much that we are losing their business, (China isn鈥檛) really buying from anybody right now,鈥 Setzer said. 鈥淐hina is always going to be an importer of U.S. corn, soybeans and wheat, it鈥檚 just about how much. That鈥檚 going to change from year to year.鈥
This has led to the U.S. finding other countries willing to fill the possible void left by fewer sales to China. He said Mexico has been a bigger buyer of soybeans lately, as well as corn and pork. Canada, South Korea and Japan have also shown increased interest in buying U.S. products, adding to demand.
鈥淭here鈥檚 plenty of business to fill the void created by the loss of business with China,鈥 Setzer said.
He said for China to show increased buying of U.S. grains, it may require plenty of work between the two governments 鈥 tariff wars can work both ways.
鈥淭he whole thing with China is they want give and take,鈥 Setzer said. 鈥淪ometimes we overlook the fact the U.S. has 35% tariffs on several Chinese products, so with those, China isn鈥檛 really willing to do business with us anyway. The U.S. is going to have to give up a little bit to get back some of China鈥檚 business we鈥檝e seen slip away.鈥
One challenge for the United States is how politics and leadership is perceived by China, Setzer said.
鈥淲e get a new president every four or eight years,鈥 he said. 鈥淐hina gets a new president whenever the person they have now dies. China was looking at it as the trade war being instigated by the Trump administration and they figured they would deal with this for four years. Joe Biden got elected and he鈥檚 not really willing to drop all of the tariffs and everything we had in place with China, and they were taken aback by that. Politics is definitely part of it.鈥