U.S. farmers are stuck with fields full of weather-damaged corn – a crop they planted after the U.S.-China trade war killed their soybean market. Many don’t know yet what crops they’ll plant next season among a host of dicey options. In Texas, Kansas and Colorado, farmers are weighing whether they should plant fewer acres of corn and more sorghum, even though China has all but stopped buying it. That’s because sorghum costs about half as much as corn to plant, which appeals to farmers wary of investing too much for an uncertain return.
U.S. President Donald Trump announced last month that China had agreed to double its pre-trade war purchases of U.S. agricultural products over the next two years as part of a Phase 1 trade deal. That brought little comfort to U.S. farmers because China still has not confirmed the commitment or signed any deal.
Trump administration officials say the Phase 1 trade deal with China will be signed in January, though many tariffs will remain in place during further negotiation. Commodity market analysts and agricultural economists warn an agreement won’t be an immediate fix for the U.S. farm economy because the conflict has spurred China to develop new supply chains.
China has, for instance, deepened ties with rival exporters such as Brazil and Argentina. Brazilian soy cultivation is expanding after record exports to China in the past year and China is investing in South American ports. Farmers in export-dependent regions say they can’t continue to sell their crops for below the cost of production without a third round of subsidies to cover the losses.
source: reuters
