By Illinois Radio Network
SPRINGFIELD – The trade dispute with China, a disease that halved its hog herd, and thus the demand for U.S. grains to feed them, and robust competition from South America all have had Illinois soybean farmers dealing with a reduction in demand.
Phase 1 of the new trade deal with China was expected to help alleviate some of those issues, with China’s agreement to buy $32 million in U.S. agricultural products in 2020.
But the coronavirus epidemic has put a wrench in the works, said Joseph Camp, manager of AgriVisor and an analyst specializing in grains.
The epidemic has fewer people in China are going to work or out in public at all; they are eating less and spending less, Camp said. In addition, port activity is sluggish because of travel restrictions and other fears, and the government is re-allocating its resources to fight the disease.
“The bigger picture is just this sort of impact that we’re seeing on the Chinese ability to import goods across the board, whether we’re talking about manufactured goods or commodities like soybeans,” Camp said. “China is suffering from reduced capacity to bring in the soybeans, and they’re also just simply not spending a lot of resources on trying to follow up on this Phase 1 of the trade deal and make the purchases that we had expected to come by now.”
It is too soon to make predictions about whether the virus will soon be contained and whether the Chinese will quickly recover,” he added.
“If the Chinese do come in and they start to buy from the U.S., we are going to see market prices react favorably,” Camp said, “Whereas they’re going to continue to drive prices lower if Chinese purchases are delayed any further. It’s now at a point where we need to see the sale actually materialize.”
Illinois Radio Network can be reached at News@WJBC.com.