Chicago | Reuters — The U.S.-China trade war has accelerated Brazilian efforts to erode the United States’ share of the world soybean export market, and some of the shifts in global grain flows could last for years, according to executives at CHS Inc., the largest U.S. farmer co-operative.
Even with a so-called ‘Phase One’ trade pact expected to be signed in January, uncertainty over Chinese purchases of U.S. farm products — specifically what goods China has agreed to buy, in what volumes and which timeframes — means that some of the profound trade changes that have occurred during the past 18 months are at risk of becoming permanent, they said.
“It’s difficult to believe that we can just rewind the clock, and everything goes back to where we were before,” said John Griffith, senior vice-president of CHS’s global grain marketing and renewable fuels, told Reuters in an interview Thursday.
Such uncertainty is fueling agony across a U.S. farm sector that has suffered from years of falling farm incomes, low crop prices and a glut of grain.
Griffith said while President Donald Trump and one of the largest buyers of U.S. farm goods have been battling it out with tariffs, the map of how foodstuffs flow around the planet has changed.
“New customer connections have been made on the face of the planet, new infrastructure improvements have been made,” he said.
CHS has been more acutely impacted by the U.S.-China trade war than many of its agribusiness rivals because the company’s operations are concentrated in northern Midwest and Plains states such as North Dakota, which ships the bulk of its soybeans to Pacific Northwest terminals for export to China.
“We won’t go immediately back to where we were 18 months ago, maybe not for a long time,” CHS CEO Jay Debertin told grain producers at a farm conference in North Dakota last week.
“The profound trade changes resulted in new trading partners and new sources of grain for markets the U.S. once served,” Debertin said. “That is now the new world.”
U.S. Treasury Secretary Steven Mnuchin said on Thursday the United States and China would sign their ‘Phase One’ trade pact at the beginning of January, adding that it was completely finished and just undergoing a technical “scrub.”
— Reporting for Reuters by P.J. Huffstutter and Karl Plume in Chicago.