Speaking on March 4 at the 2019 Annual Meat Conference in Dallas, Texas, Aho mentioned a Wall Street Journal article that he had just read, which stated that the China market may reopen soon for the U.S. soybean industry.
Formerly the largest buyer of U.S. soybeans, China essentially stopped the import of U.S. soybeans around the beginning of the 2018-2019 crop year amid trade wars between the two countries.
Aho, Poultry Perspective economist and consultant, said China, which is the largest global user of soybeans, now relies much more heavily on Latin American countries for its supply, making it more difficult for the U.S. to regain its market share.
“If the Wall Street Journal is correct in their reporting, China will start buying some more soybeans from us, but I think it’s important to remember that we will probably never capture that entire market back again,” said Aho. “We lost some market share to Brazil and Argentina, so we’ll start selling soybeans to China but not as many as before.”
Present soybean surplus
During his presentation, Aho showed a slide that revealed that U.S. soybean exports to the European Union market more than doubled during the 2018-19 crop year. A similar situation occurred with exports to the rest of the world. However, U.S. soybean exports as a whole are down significantly when compared to the previous three crop years, which in turn has led to a surplus of soybeans and lower prices.
“Where did those soybeans go? Well, they went into storage. So, in 2019 our storage will be nearly a billion bushels of soybeans,” said Aho.
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