Exporters sold $15.2 billion worth of American farm products to China in the first six months of 2021, raising the possibility of record sales this year, according to economist David Widmar earlier this week on the Agricultural Economic Insights blog. Sales are on pace to hit $33.7 billion, with some of the most active months for sales — during and after the fall harvest — still to come.
“Right now, analysts are saying it’s like the trade war never happened,” said Widmar. “Trade has been an area of stability amid rising tensions between the United States and China on a myriad of other issues. But China’s purchasing targets expire at the end of the year, and the Biden administration hasn’t indicated what its next steps on China trade will be.”
The 2020 “phase one” trade agreement that de-escalated the Sino-U.S. trade war called for China to import $43.6 billion worth of U.S. food, agriculture, and seafood products this year as part of $200 billion in purchases overall from America. Widmar feels that China is closer to meeting the target for agriculture than for other trade categories. Sales for January through June of this year were $8 billion, or 52%, higher than they were for the first half of 2020.
Last week, exporters reported the sale of 592,000 tons, or 21.7 million bushels, of U.S. soybeans for delivery to China in the trade year that begins on September 1.
The USDA will soon update its forecast of record ag exports of $35 billion to China this fiscal year. The current mark is $25.7 billion during fiscal 2014. Fiscal years start each October 1. On a calendar-year basis, the record is $26.4 billion in 2020, according to USDA data.
EDITOR’S TAKE:
Record exports to China is welcome news to U.S. farmers/ranchers. It goes almost without saying, more exports equal more dollars in the pockets of our producers. More dollars in their pockets leads to increased truck sales. Let’s face it, most farmers given a choice of purchasing a new piece of equipment or a truck for their operation or paying more in taxes to the government, will pick the former. USDA has already indicated that 2021 should be a very good year for net farm income and increased export sales will only help to push it over the top. So, with those facts in mind, why not help the farmers by selling them a new truck or two and topping it off with AgPack. Help them celebrate a great year!
