Despite a global pandemic and a slow start, 2020 was a really good year for U.S. agricultural exports — with a significant increase in exports to China in the fourth quarter. The last three months of 2020 were three of the four best months in the history of U.S agricultural exports to China, said Gregg Doud, the immediate past chief agricultural negotiator with the Office of the U.S. Trade Representative.
More than half of U.S. agricultural exports to China in 2020 took place in October, November and December, he said during the Farm Foundation’s forum on agricultural trade. “That’s going to be a really important thing going forward here I think, and we did that in the midst of a pandemic,” he said. Everyone understands the importance of the Phase One agreement with China. It increased the number of U.S. companies eligible to export from 1,500 to well over 4,000, he said.
“This is a very big thing to keep in mind as we go forward,” he said. So many more products have access now, and that’s a major change, he said. To be successful going forward, the U.S. has to be price competitive — not just in China but around the world, he said. “So much of our challenge in the last few years has been a strong dollar and particularly as we deal with competition from Brazil,” he said. Infrastructure is another challenge. Since September, the U.S. infrastructure for bulk agricultural products and what it can sell has been maxed out, he said. “Our window is not going to expand … so we have to be able to maximize what we can do in that window,” he said.
Another thing to keep in mind is volatility, he said. “The volatility that we are going to see going forward as a result of China and everything else going on I think is something that we all have to wrap our head around,” he said. China has the potential to import 30 million tons of corn from the world, but pork prices in China are falling and corn in China is $11 a bushel, he said.
“I can’t tell you whether China is going to import 5 million tons of corn or 30 million tons of corn. We all have to keep this in mind, this is not going to be smooth,” he said. Soybean demand in China is going to be important. It dropped from 94 million tons to 82.5 million tons, and two years later it increased to 100 million tons. There will be continued volatility going forward, he said.
Meat and poultry imports by China are another area to watch. Those imports went from $11 billion two years ago to $28 billion in 2020. China’s total agricultural imports from around the world went from $136 billion two years ago to an estimated $170 billion in 2020. “That trend is obviously something we need to keep in mind,” he said. He thinks that increase is more in consumer-finished product, a meat discussion more than a bulk soybean and grain conversation, he said. Source: https://www.capitalpress.com/nation_world/agriculture/china-s-agricultural-imports-big-but-volatile/article_889