China Trade War Could Cost U.S. 9 Million Acres of Soybeans

October 22, 2018 01:56 PM
Purdue agricultural economist Wally Tyner estimates the U.S. could lose 9 million acres of soybeans to Brazil permanently if the ongoing trade issues with China persist.

Planted soybean acres in the U.S. have soared the past few years. The latest estimate from USDA pegged 2018 soybean planted acreage at 89.6 million acres. While that was a 1 million acre drop from 2017, soybean acreage still surpassed corn acres this year and is up more than 10 million acres this decade.

Soybean acres

Purdue University agricultural economist Wally Tyner said as the trade war with China escalates, it’s those valuable soybean acres in the U.S. at stake. Tyner said the U.S. could lose 9 million acres of soybeans to Brazil permanently if the ongoing trade issues with China persist.

“If Brazil and other exporters that compete with us in the world market, if they're able to expand their acreage, if this goes on long enough, Brazil could have an incentive to expand their acreage, and we will not likely get that acreage back,” said Tyner.

Tyner said Brazil is a low-cost soybean producer compared to the U.S., making it a more attractive option for big buyers like China.

“They [Brazil] can compete with us in the world market, and if the prices for them stay high enough and long enough, then it could be a real problem for us,” said Tyner.

Nine million acres are at stake as a trade battle with China drags on, and the issues over trade won’t get resolved overnight. That’s why Tyner gives the trade negotiations a two to three-year timeline before acres start moving to Brazil.

“There's a lot at stake in these negotiations coming up in November,” said Tyner. “We need to get moving on that, we need to get back to markets and selling to Chinese markets. That’s really important.”

Using the U.S., Mexico, Canada Agreement (USMCA) as an example, trade officials spent more than a year negotiating and working through details. Once a trade agreement framework was announced between the U.S. and Mexico, it took Canada only a matter of days to join in on the final trade pact. Tyner thinks a cease-fire between the U.S. and China will take much longer than that.

“This is going to be really hard, because there's a lot at stake both for China and for the U.S.,” said Tyner. “Finding some common ground is not going to be easy. There's so much built-in interest at stake for both sides.”

Tyner said it’s more than just trade at the center of the debate. Intellectually property rights is the underlying issue the Trump Administration is trying to fix, but he says it’s trade that’s caught in the middle.


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