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China is back buying US commodities

By: Jake Putnam
Published in Video on  August 31, 2020

WASHINGTON: China is buying more U.S. commodities for the upcoming marketing year, according to the American Farm Bureau.

AFBF Economist Veronica Nigh says the analysis includes corn, wheat, potatoes, sorghum, and cotton.

“So far, soybeans sorghum and cotton have quite a lot of advanced new crop sales, greater than what they’ve been the last few years. Corn sales, a little bit slower. Even though we are seeing reports of big sales by volume, when you look at those sales as a share of total production that’s expected this year, those sales are still pretty moderate,” said Nigh.

Economists say large new-crop sales kick-start exports for the new marketing year, but don’t necessarily lead to greater total exports. She says current data shows China is behind its Phase 1 commitments.

“Through the end of June, China was behind on their purchases that they would need to make in order to reach that commitment. So, unfortunately, it’s going to come down the wire, but we’ll still be looking very closely over these next few months to see how the pace is going,” said Nigh.

There are many factors that can influence trade with China. “There’s a lot of dynamics going on, those that are market-driven and those that are politically driven. And so, one thing we do watch pretty closely is canceled sales. That would be commitments for purchase that never actually materialized into exports. And then I think it’s also important to remember that we’re only a part of the larger China-U.S. relationship.

A relationship that includes Idaho potatoes and hay.

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