China's buying spree of Argentine soybeans is dealing another blow to U.S. farmers, particularly in Illinois, where growers say they have been effectively shut out of their largest export market. The surge in purchases followed Argentina's surprise suspension of its 26% soybean export tax earlier this week, a move that doubled Chinese buying virtually overnight and priced U.S. soybeans out of the global market.
The shift comes just as the Trump administration provided financial relief to Buenos Aires to stabilize its economy, a step that indirectly gave Beijing an opportunity to secure cheaper supplies from South America. "U.S. farmers are shut out of various markets," said Andrew Larson, director of government relations at the Illinois Soybean Association. "Obviously, we would love to be able to fill the demand, but we know that Argentine farmers do too."
Argentina, one of the world's largest grain suppliers, reimposed the tax just two days after reaching its $7 billion export sales cap. But by then, importers in China had booked at least 35 cargoes - equivalent to roughly 2.27 million metric tons - according to people familiar with the transactions. Most of those shipments are expected to load in November, and some have been booked from Argentina's next harvest.
For American farmers, the timing could not be worse. The U.S. Department of Agriculture reported that as of Sept. 11, China had not booked a single U.S. soybean cargo for the new marketing season - the first time that has happened since records began in 1999.
Illinois, the top soybean-producing state, has been hit especially hard. Farmers there were already reeling from a 20% retaliatory tariff imposed by China during the ongoing U.S.-China trade war. Ty Higgins of the Ohio Farm Bureau warned that "as the harvest ramps up, the piles of corn and soybeans will not have the markets they once had, causing further downward pressure on commodity prices and the farmers' bottom line."
The Trump administration has signaled it may once again step in with financial aid. A White House official told Axios that "the soybean farmers have been screaming for assistance since we took office. So this isn't new. And the president is going to help." The administration previously paid out $28 billion in subsidies to offset losses during the 2018 trade war.
Agricultural economists warn that China's purchases from Argentina could meet its entire near-term demand, bypassing the U.S. entirely. Purdue economist Joanna Colussi said current data suggest Beijing could "skip U.S. soybean purchases altogether this year" if Argentina and Brazil maintain supply levels.
Republican lawmakers from farm states are voicing alarm. "This is a bitter pill for North Dakota soybean farmers to swallow," Rep. Julie Fedorchak (R-N.D.) said. But calls for urgent trade negotiations with China are growing louder from farm groups, including the American Soybean Association, which urged President Trump to secure an "immediate deal" to avoid further damage to rural economies.
