Tariffs To Shift Soybean Markets, Benefit Brazil

July 27, 2018 04:18 PM
While the world will continue to consume the same amount of soybeans as previous years, the Chinese tariffs on the crop will shift where U.S. soybeans are sold.

While the world will continue to consume the same amount of soybeans as previous years, the Chinese tariffs on the crop will shift where U.S. soybeans are sold. 

“We export a lot of soybeans and the major destination for those soybean exports is China,” Wallace Tyner a professor at Purdue University told AgriTalk host Chip Flory. “Sixty-eight percent of our beans go to China.”

According to Tyner, based on those numbers it’s not hard to figure out that U.S. soybean production and prices will go down as a result of the tariffs. Still, the U.S. won’t lose 68% of soybean exports. 

“Brazil is going to take the Chinese market to the extent they can, but they can't take it all,” Tyner explained. “Brazil doesn't have enough soybeans to keep their own markets plus get the Chinese markets. Since they'll get 25% more, close to that, in China, they're going to focus on China, but then we'll take the markets they lose.” 

Tyner’s research shows the estimated total loss in exports for the U.S. is 29%. 

“Now that's not small potatoes. That's a big loss, but it's not the 68% loss that that we have to China,” Tyner says. “So, Brazil takes a good chunk of our Chinese market we take some of their market.”

When the tariffs become a significant problem is if they stay on for several years. That’s because Brazil has 9 million acres of opportunity to grow soybean production. 

“If it stays on long enough for them to make the decision to do that, we're going to lose that that production, we're gonna lose that share of the market,” Tyner says. “So that's the real danger.”

According to Tyner, the one-year, $12 billion payment program announced by USDA on Tuesday will help producers this year but doesn’t solve the longer-term problem of losing market share. He says their analysis shows the U.S. and China both lose with tariffs in effect. In the U.S. Tyner estimates the losers are soybean producers, but in China anybody who feeds livestock or uses soybean oil loses. 

“We estimate that both the U.S. and China lose $2.6 billion a year, every year that this thing is in effect. So, it's lose, lose for both the U.S. and China,” Tyner says. “The winner’s Brazil. Brazil gains $2.2 billion a year.”


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Spell Check

Alan Hoehne
7/30/2018 09:39 AM

  Anna-Lisa, Thanks for proving the point that your views/facts are more worthless than a used piece of TOILET PAPER!!!!! can you say FAKE news? So China looses 2.6 billion, USA looses 2.6 billion. Brazil gains 2.2 billion. Lets do the math together-2.2-2.2+2.6=-1.8 billion lost, or is it in the Clinton foundation, or lost in Hillary's e-mail servers, or was Obama's Iran deal planned that far in advance to recoup the money he was GIVING away? We all know that is not news, that is just the way it has to be. I know there are other players/countries, but we are talking about the big players here, Most countries do not have a rain forest with an infrastructure running right through it to be able to jump right in the game and be a game changer! Oops, neither does Brazil, they can't handle what they have right now efficiently. Unless they have a FAKE PRESS reporting a bunch of liberal nonsense! To close we are not even taking into account the increased business we will/are going to get from other countries around the world, who unlike our fake press, realize or are beginning to realize , the only and the best game "in the World" is us, as in the USA. Sad you cannot grasp/report that President Trump is the law!!! I will quote an old old song to try to get you up to speed "I fought the law and the law won I needed money 'cause I had none I fought the law and the law won" lets all join the USA (law) and get on with WINNING!!!!! sick and tired of your reporting. Us, as in USA, do not have time for you! Because OUR President Donald J Trump has been and is MAGA!At a "HUGE" fast pace! Bet you cringe at not being able to lambast President Trump for saying "HUGE fast pace," But No, just, me, a farmer from Nebraska multi tasking like all farmers know how to and doing your job reporting "AND THATS THE WAY IT IS" borrowed that one too, Thanks Mr. Cronkite. Back from when the news was "the REAL news." and no more!!! https://www.youtube.com/watch?v=G5tdqojA2

Lubbock , TX
7/30/2018 08:07 PM

  Thank your Dr Cordonnier for your scientific factual statement instead of the political nonsense from the Trump supporter, who like his President, simply prefers to ignore the hard facts. China is already moving to finance expansion in Brazil to include storage, portage, rail service & other infrastructure. Unfortunately American farmers largely serve on government payments, a form of welfare. As a result this trade war is not going to end well for them or for the American consumers.

Eastern, NE
7/31/2018 07:27 AM

  Sheesh Alan from Stanton! I think you need to take your meds. We have no one to blame, but ourselves with regard to Brazil's dominance. Tariffs and embargoes from the 70's and 80's put them on the course they are today. Add in Trump's crap and we see our market share drop further. How many acres can Trump's buddy Putin bring into production further eroding our market share? This spat will not end well for the American farmer.


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