Try Brazil
https://www.reuters.com/article/us-china-soybean-imports/supply-woes-brazil-cuts-into-u-s-soybean-market-share-in-china-idUSKBN1D30GCWhy China Is Hungry For Brazilian Soy
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This article was originally published at Stratfor.com.
• Brazil's poor infrastructure has long hurt the competitiveness of its soybean exports, but the country's producers will benefit greatly as new rail and port projects come online in the Amazon region.
• Problems for its main soybean export rivals, the United States and Argentina, will strengthen Brazil's trade relations with China this year.
• Brazil's soybean exports to China will increase further because the South American country has an abundance of land suitable for producing soybeans with higher protein levels.
It's a long way from the southern reaches of the Brazilian Amazon to China, but it's a path that many more are set to tread. In the early 2000s, China didn't even figure among Brazil's top five export markets, but in every year since 2009, Beijing has been Brasilia's main trade partner. Today, China is a major market for Brazil's soybean exports, which account for over 40 percent of its total exports to the Asian country. And because of Beijing's trade spat with the United States and ambitious infrastructure investments in Brazil, Brazilian soybean exports to China are poised to keep growing.
From Iowa:
There are repercussions for the entire rural economy'
"Farmers are feeling a real pinch," said Heisdorffer, president of the American Soybean Association. "If we can't get these commodity prices up ... we are going to start losing farmers. There's no way of getting around it.
This year's U.S. farm income is forecast to be half of what it was in 2013, primarily driven by falling corn and soybean prices.
China's latest tariffs on $50 billion of U.S. products came hours after President Donald Trump announced tariffs on a similar number of Chinese products.
Looking at soybeans alone, the U.S. economy could lose $3 billion annually within a couple years, due to lost export markets, a Purdue University analysis shows.
China, with a population of more than 1.4 billion, imports about 60 percent of global soybean production.
About 40 percent of China’s soybean imports come from the U.S. and were valued at $14 billion last year.
Initially, China would still look to the U.S. for soybeans, said Wallace Tyner, a Purdue agricultural economist.
But Brazil and other countries soon would take advantage of the 25 percent tariff to undercut U.S. producers.
"Brazil has the capability to expand substantially," Tyner said. "Over time, we'd lose global market share, because other countries would take advantage of the 25 percent wedge that the tariff represents."
The U.S. could lose 40 percent of its global market for soybeans, Tyner said. That would cut the need for soybean acres by about 16 percent. "Those are big numbers," he said.
"There'd be a lot of adjustment in U.S. agriculture," Tyner said, adding that falling soybean prices would depress corn prices as well, with growers switching acres.
"There are repercussions for the entire rural economy," he said.
Kirk Leeds, CEO of the Iowa Soybean Association, said tariffs will create "a lot of market disruption at a time when farmers can't afford any disruptions."
"If we go into a long, sustained period of low prices, it will impact some farmers' ability to stay on the farm," he said.
"For farmers on the edge, this could be very detrimental," Leeds said.
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