US soybean farmers hurting after China cancels contracts

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Video transcript:

Contessa Brewer, in Portland, N.D.: “Last week the administration admitted that there were no high level trade talks going on right now with China.”

Rick Brandenburger, manager of agricultural product producer Richland IFC, responds: “Oh, your serious. I was not aware of that. Wow,seriously? That’s interesting. So we are just going to close the door and walk away. Interesting. That’s not good. I don’t think that tariffs are ever a good thing for either side. I gotta believe that there are methods of working on differences without taking the hammer out.”

 
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The Chinese will be back. They have no choice as they cannot fulfill their demand for soybeans without the US crop.
 
Shows what a bad idea it is to rely on other nations for food or money.
 
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Annie said:
Shows what a bad idea it is to rely on other nations for food or money.
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If you are suggesting that international trade is a bad idea, implementing that suggestion would stop the U.S. economy cold. Many, many people would lose their jobs.
 
We’re in a bad position then, aren’t we?

I don’t think we should stop all trade with foreign nations, but we lack the capacity to build or grow some of our own stuff, and that is a bad position to be in.

China, otoh, can build these things: they are currently building them for us.
 
Brazil doesn’t grow enough soybeans to satisfy Chinese demand. The Brazilians will be raising their prices soon.
 
Annie said:
I don’t think we should stop all trade with foreign nations, but we lack the capacity to build or grow some of our own stuff, and that is a bad position to be in.
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Seems to me that we grow an abundance of food crops - enough to feed the U.S. and export for profit to other nations. The soybean farmers went to the expense to grow soybeans for export but now can’t sell those soybeans for cost.
 
Zzyzx_Road said:
The Chinese will be back. They have no choice as they cannot fulfill their demand for soybeans without the US crop.
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EXCERPT:
  1. Isolate the U.S.
China can play the waiting game — President Xi J(name removed by moderator)ing plans to stay in power indefinitely, which means he can take his time forging trade partnerships with other countries around the world and isolate the U.S. We’re already seeing China court Europe, while Canada and China have had trade talks, too.

If China really wants to make a splash, it could join the Trans Pacific Partnership, which the U.S abandoned when Trump took office and then have more open trade with 11 countries. Tariffs between China and these countries would be reduced or eliminated, and it would get much easier to move goods from one place to another after trade deals get put in place. “Imagine if China decides to come in,” Baig said. “That would be a big global trade agreement.”

This is a long-term play as trade deals don’t happen overnight, but Baig said it might be the most effective from China’s perspective. With the U.S. also fighting trade wars with Canada, Europe and others, countries across the globe may be more willing to form new trade alliances — and leave the U.S. behind.
 
We can grow a lot of huge crops like corn and soybeans, but where do our other foods come from?

And where are our orchards? Aside from oranges, fruit comes from other countries.
 
Talked to a grain dealer yesterday who trades for a huge grain company. He says the “China” problem is, at most, a hoax. He says dealers are taking advantage of it to do short selling to drive the market down in order to pick it up cheaper later.

He says nobody in the industry thinks the China threat is anything significant. Much more significant, he said, is the crop failures in South America, which the traders believe will soon drive China into the international market.

I hope the grain companies are right and make a ton of money off China.
 
Most of China’s revenue and profit comes from the US market. China has to import quite a lot of stuff, including but not limited to oil, natural gas and soybeans. They take us down, they’re going to tank their own economy. Sure Xi stays in power indefinitely in theory. In practice, if the Chinese economy tanks, there will be at least a hundred million Chinese in the streets and Xi’s regime is deeply at risk in this scenario. Not to mention they’ve yet to have their own banking crisis, their banks are incredibly overextended. Why is it there are so many rich Chinese who take their money out of the country, circumventing China’s strict capital controls along the way, so they can shelter their wealth from their own government?
 
Do you have any more info about “the dealers?” I’m wondering if the dealers will export crops to a third country from which it will be sold to China at a profit…
 
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He did mention that, but we were at a social function and I didn’t really want to take up too much of his time talking about it. I didn’t get the impression so much that grain would be sold to other countries who would sell to China as that grain will just be sold through dealers in other countries without the soybeans actually ever going to those third countries.

all of that is a pretty complicated business, and while I enjoy talking about it with people who know it, it’s not the easiest thing to follow.

But for sure, saying “I won’t buy your soybeans” is a lot like saying “I won’t buy your oil”. Both are commodities that aren’t distinguishable once they are transported.
 
But it’s not that they want specifically to ban U.S. soybeans… They want to hurt U.S. farmers, and in that they are succeeding. Farming is not a nimble enterprise… time has a big impact.
 
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