Analysts from Rabobank have issued a stark warning that U.S. soybean prices could fall below $9 per bushel if President-elect Donald Trump’s proposed tariffs ignite another trade war with China. This would mark a significant decline, potentially reaching the lowest prices since 2020, and would be well below farmers’ production costs.
Key Highlights:
Potential Price Drop:
Current U.S. soybean futures are around $9.98 per bushel.
Analysts predict that tariffs could push prices down, affecting farmers’ profitability.
Impact on Global Trade:
Brazil could significantly increase its share of China’s oilseed imports, potentially supplying up to 80% of China’s total needs.
In the 2023-2024 marketing year, 74% of China’s soybean imports came from Brazil.
Tariff Threats:
Trump has announced plans for a 10% tariff on global imports and a 60% tariff on Chinese goods, raising fears of retaliatory measures from Beijing targeting U.S. agricultural products, especially soybeans.
Historical context: Trump’s previous tariffs in 2018 initiated the last trade war.
Impact on American Farmers:
U.S. farmers have already experienced a nearly 23% drop in net farm income since 2022.
Should a new trade conflict arise, farmers might reduce soybean plantings by up to 5 million acres this spring, affecting domestic feedstock for biofuel suppliers.
Changing Dynamics:
China’s reliance on U.S. soybean imports has decreased since Trump’s first term, as the country has diversified its imports and built up its state reserves.
Adjustments in livestock feeding practices have also reduced dependence on imported soy.
Future Outlook:
Rabobank analysts indicate that a new trade war could effectively shut U.S. soybeans out of the Chinese market entirely.