New data released last week shows China is continuing to purchase more U.S. farm commodities. Micheal Clements shares details on what this means for U.S. farmers.
Clements: The U.S. Trade Representative’s Office last week provided an update on export data to China. American Farm Bureau Federation Chief Economist John Newton says China has committed to nearly three-quarters of its Phase One agreement goals for 2020.
Newton: We saw a report from USTR this past week that indicated China’s made purchases, this includes products that have been exported as well as products that have yet to be shipped, totaling nearly $24 billion, that’s approximately 71 percent of their Phase One goal for calendar year 2020.
Clements: Newton says the key here is that export commitments turn into actual shipments of products.
Newton: We’ve obviously seen the Chinese make a number of structural changes to further advance agricultural trade with the United States. We’ve seen strong new crop purchases of corn and soybeans in particular. China’s been a big player in the pork market this year as well. So, I think all of this is a step in the right direction. We do need to see those export commitments turn in to actual shipments for this goal to be realized.
Clements: Newton says the improved export demand has led to increased commodity prices.
Newton: When we look at where commodity prices are today versus where they were several months ago, we’ve seen commodity prices really rally on the back of lower inventories and strengthening demand from the export market. New crop export commitments for corn and soybeans are record high, we also see very, very strong export inspections. So, I think that’s led to higher prices for farmers over the last few months. But again, we need to see those commitments turn into actual shipments for that price rally to last.
Clements: Micheal Clements, Washington.