WEST LAFAYETTE, IN - Last year was an interesting year when it came to trade between the United States and China.
Late in 2020, China began purchasing large quantities of American agricultural goods while attempting to meet the obligations of the Phase One Trade Agreement.
David Widmar is an Ag Economist with Agricultural Economic Insights and says 2021 is picking up where 2020 left off late last year.
“In the data, 2020 looked like it was a pretty strong year, but not as exciting as we would have hoped early in the year with the Phase One Trade Deal. It’s a year where we had seven or eight months of lackluster activity and then a flurry of activity in the last few months. Some of that is expected because of the seasonality of China’s purchases of soybeans, especially, but it was really strong late in the year, and we’ve carried that over. And there was a lot of enthusiasm about whether China will purchase a record amount of ag goods in 2020, and we didn’t get there for a host of reasons. Now, it looks like we could be off to the races for a record level of excitement.”
Widmar says the question for 2021 and beyond is how long China will be in this corn-purchasing phase, and what will the size of those future purchases look like?
He says U.S. soybean supplies are as tight as they’ve been in years, and will there be enough to meet the overseas demand domestic crush is unknown.