It seems like every week farmers suffer another kick in the ass as an outgrowth of the current president’s ill advised and poorly conceived trade war with China. This week brought the news that China and Argentina agreed to a deal that will have Argentina exporting soymeal to China.
While China has been a major buyer of Argentine soybeans, they have avoided buying the crushed beans. This is a major move and is being hailed in Argentina.
What is great news for Argentina is certainly not good for the US and especially for Iowa. From Reuters last Wednesday:
MESSAGE FOR TRUMP
Argentine soy industry insiders said the U.S.-China trade war had helped make Argentine soymeal exports more alluring as Beijing looks to diversify its supply and to send a message to the United States that it had other options on the table.
The pact, which came together faster than many expected, could help local crushers make up lost ground on U.S. rivals, who have benefited from lower domestic prices linked to a glut of U.S. beans. U.S. farmers, meanwhile, lamented the deal.
“Of course we’re sorry to see it,” said Ron Heck, a corn and soy farmer in Perry, Iowa, adding he expects that China may pay more than world market prices for Argentine soymeal to avoid buying crops from the United States. (my bolding – ed.)
“China has shown a willingness to pay extra to punish the United States, which falls on me.”
As we hear the constant lies from the Trump administration about how we are winning the trade war, the reality is we are not only losing now but we may be losing for a long, long time. Markets lost will not come back easily. China is acting fast to fill their needs. We do not have that many options for selling our goods.
Elections have consequences. In this case the consequences may be very permanent for a group of people who believed a fast talking confidence man. Joni Ernst still backs that fast talking con man to the detriment of Iowans.