China just placed its largest order of U.S. soybeans in two years, offering a sign of improving trade conditions after months of China snubbing American soybean farmers.
This week, the U.S. Department of Agriculture announced the sale of 792,000 metric tons of soybeans to China. The move follows a meeting between President Donald Trump and Chinese leader Xi Jinping at the end of last month to ease trade tensions, with China committing to resume orders of U.S. soybeans and purchase 12 million tons of of the crop by the end of the year, as well as at least 25 million tons in each of the next three years.
Earlier this month, China bought 332,000 tons of U.S. soybeans, bringing the total so far in November to more than 1 million tons. COFCO, China’s largest state-owned agriculture and food business, had not ordered soybeans from the U.S. since May and had not purchased the crop since the 2025 U.S. harvest season began.
These fresh purchases offer hope for U.S. farmers following months of tariff disputes that disincentivized China from purchasing American soybeans and effectively priced them out of the global market. It’s a good start, industry leaders said, but farmers want more assurance of a steady market moving forward.
“We want to trust what we’ve heard,” Todd Main, the director of market development at the Illinois Soybean Association, told Fortune.
At the same time, farmers are fed up with the uncertainty that has unaccompanied the trade policy of the Trump administration.
“We are concerned about the volatility in the trade relationships,” Main continued. “It’s hard for people to make plans—whether that’s farmers planning for next year’s crop, or buyers that are planning to make big investments in equipment or facilities or what have you—where there’s lots of instability.”
In 2024, soybeans made up about 20% of U.S. “cash crop receipts,” worth about $46.8 billion, according to USDA data. While about a quarter of those soybeans went to China, retaliatory tariffs as a result of trade disputes with Beijing hobbled the U.S. soybean industry while South American countries gobbled up market share. Brazil and Argentina are replacing U.S. farmers, with Brazil making up about 71% of China’s soybean imports, according to the American Soybean Association. Three decades ago, Brazil accounted for just 2% of those imports.
A new trade era
Even with thawing relations between the U.S. and China, soybean farmers have reason to be on edge about restoring trade ties. For one, the USDA’s figures for soybean exports could be skewed and harder for economists and farmers to interpret. The USDA may not be releasing up-to-date weekly export summaries for the rest of the year as a result of the shutdown slowing down the release of key data. Therefore, farmers and economists rely more on the USDA reporting flash sales, or crop purchases that exceed a certain volume and warrant their own report.
Not everyone is sold on China’s commitment, either. StoneX chief commodities economist Arlan Suderman said in a note earlier this month that China’s data “provided no evidence to support the notion that there will be a substantial increase in state purchases to meet the 12 million metric ton commitment for calendar year 2025 as stated by the White House” and that China’s soybean processors have “zero financial incentive” to buy more U.S. supply because of the more affordable options from South America.
Main is likewise skeptical. He said during Trump’s first term, China and the U.S. similarly made an agreement to resume soybean trade, but there was a delay in initial follow-through from China.
The threat of future trade tensions hasn’t completely disappeared. The consequences of reopened tariff disputes between the U.S. and China would mean Brazil and Argentina would once again have another opportunity to expand their dominion over China’s soybean import market.
“Brazil is the largest producer and exporter of soybeans, and so the real concern has been, if we have another trade war, we’re incentivizing faster expansion in South America, which has long-run effects for us,” Scott Gerlt, chief economist for the American Soybean Association, told Fortune.
Still, soybean farmers aren’t completely at the mercy of fragile trade relations. Even before the 2025 slate of tariffs, soybean farmers have made inroads to diversify demand for their crops, including opening “soybean excellence centers” meant to provide training and best practices globally for soybean producers, as well as expand infrastructure to be able to process and distribute more soybeans domestically, according to Main. Others have found other trade partners, such as Southeast Asian buyers to partially offset lost business from China.
“It’s not going to be just, OK, everything’s all better—or, everything’s a disaster,” Main said. “It’s going to be somewhere in between going forward.”
Politics8 years ago