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It’s been a tough year for farmers.
For months, China was boycotting American soybeans in retaliation for the tariffs President Donald Trump has imposed, leading to a soybean glut and pushing down crop prices. China is the largest buyer of U.S. soybeans exports. Roughly one in four Minnesota soybean rows were sent overseas to China, according to the Minnesota Soybean Growers Association.
At the same time as that boycott was playing out, rising input costs and high interest rates were adding to farmers’ woes. The overall financial pressures were leading to a spike in ag loan defaults this year.
But on Thursday, President Donald Trump told reporters flying on Air Force One that talks with Chinese President Xi Jinping had yielded fruit and that China will resume buying large quantities of U.S. soybeans.
Treasury Secretary Scott Bessent said China has agreed to purchase 12 million metric tons of soybeans from the U.S. between now and January. And on annual basis, it will purchase 25 million metric tons of U.S. soybeans.
“So you know, our great soybean farmers, who the Chinese used as political pawns, that’s off the table, and they should prosper in the years to come,” Bessent said in an interview on Fox Business Network’s “Mornings with Maria.” He said the agreement lasts for three years.
Before the Trump-Xi meeting, Dan Glessing, president of the Minnesota Farm Bureau, was already expressing cautious optimism about a deal, based on preliminary reports that China had ordered three cargoes of U.S. soybeans.
But Glessing also said the U.S. should be thinking about how to evolve its domestic industry.
“It’s good to have options when you’re talking about trade,” Glessing said. “But we also need to increase domestic usage as well, so we can control our own destiny.”
Rate cuts provide farmer relief
On Wednesday, the Federal Reserve announced its second rate cut this year. Its benchmark short-term interest rate will now range between 3.75 percent and 4 percent, the lowest it’s been in three years.
Thom Petersen, the Minnesota Department of Agriculture commissioner, said the announcement comes at a time when farmers are feeling a lot of pressure.
“Bankruptcies are up,” Petersen said. “We know that farmers are worried about their operating loans for how they're going to put their crop in next year.”
The state’s farm-lender mediation program, which helps farmers who’ve defaulted on their loans, has also seen spikes in default notices. A rate cut announcement will mean lower interest rates, which could help farmers avoid defaulting on their loans.
“So every bit like that helps,” Petersen said.
However, he added that a big issue farmers still face is higher input costs. Fertilizer, equipment and other items that producers need to run their businesses have been affected by tariffs on imports from different countries.
So, what farmers need, Petersen said, is stable, reliable trade partnerships between the U.S. and the global market.
“It's important to have a trade deal,” Petersen said. “But then to follow through with it is the other important piece of it.”
English (US) ·