China Stalls U.S. Soybean Buys as Harvest Begins, Raising Storage and Price Risks

China, the largest purchaser of U.S. soybeans, has yet to make a purchase from this fall’s crop. Agri-Pulse Newsmakers asked executive head of Terrain Ag John Newton how long the lack of purchasing could go on, if U.S. grain storage capacity can accommodate the bin-busting crop with limited export markets, and how softening interest rates may affect the farm economy.

Plus, Krista Swanson from the National Corn Growers Association discussed a recent survey that shows a majority of corn farmers see an economic crisis brewing, and Brandon Lipps with Caprock Strategies explained the potential far-reaching impacts of the Make America Healthy Again Commission’s final report on other pieces of policy like the Dietary Guidelines for Americans.

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Lydia Johnson: Welcome to Agri-Pulse Newsmakers. Here we aim to take you to the heart of ag policy. I’m your host, Lydia Johnson. Our guest this week is the executive head of terrain, John Newton, who joins us to discuss trade and the farm economy. But first, here’s this week’s headlines.

New polling shows that a majority of U.S. ag producers see an economic crisis, or the possibility of one on the horizon. A Farm Journal survey commissioned by the National Corn Growers Association in late August, and early September, showed that almost half of the 1,000 farmer respondents agreed that the U.S. is on the brink of a crisis. An additional third of respondents said the farm economy might be headed that way. The growing anxiety will also likely affect the bottom lines of farm equipment and input suppliers. Almost 60% of respondents said concerns over the farm economy would likely cause them to postpone equipment purchases in the coming year. 38% said they would scale back fertilizer application.

The Environmental Protection Agency issued a long-awaited proposal exempting some small oil refiners from U.S. biofuel blending mandates. The EPA is proposing two options either full reallocation or a 50% reallocation for small refinery exemptions that were granted in full or in part for 2023 and 2024, as well as those projected to be granted for 2025. The move follows opposition from makers of corn, ethanol, renewable diesel, and other sustainable fuels to Biden era mandates under the Renewable Fuel Standard. The biofuel industry felt those renewable volume obligations were set far too low and hurt production and profits. EPA plans to hold a virtual public hearing on Oct. 1 for the proposed rule.

Ag Secretary Brooke Rollins says USDA officials are watching commodity markets as they weigh how much economic aid farmers may need this fall to keep their operations afloat. Speaking at the National Association of State Departments of Agriculture annual meeting, Rollins acknowledged the difficult position farmers are in as commodity prices remain low and trade disruptions chip away at export markets. With the economy in dire straits, the pressure on the Trump administration to make trade deals to open up new markets for U.S. producers continues to grow. Rollins joined President Trump and senior administration officials in the United Kingdom for trade discussions this week. She said U.S. ethanol producers would join her to meet with potential buyers. The U.K. trade deal framework could greatly benefit U.S. beef and ethanol exports.

Harvest is beginning, and China has not yet made a purchase of U.S. soybeans from this fall’s crop. We asked John Newton, the executive head at Terrain how long this lack of purchasing could go on.

John Newton: Well, I think a lot depends on when the president is able to secure a deal with the Chinese. Typically, 70% of our soybean exports to China occur between November and April. So we don’t have a long runway for soybeans to ultimately move. But I do believe if we get a deal that we could see the Chinese, you know, continue to buy our soybeans for a longer period of time and forego maybe making those purchases to Brazil. So I think there’s still a tremendous opportunity ahead of us to move those soybeans if we get a deal with China.

Lydia Johnson: And China has pretty ample storage now. And it’s interesting. Brazil’s second crop will be harvested later this year in March. I mean, what threat do you see Brazil posing to the US global market access. And, you know, can China avoid making commodity purchases from the US all together with their harvesting season?

John Newton: Well, what we do know is that the stocks to use level on soybeans in China is very high and likely in preparation for where we are now. You know, a potential new trade agreement. They needed a window of opportunity to negotiate. Could they survive without purchasing U.S. beans? Potentially by drawing down their stocks and then relying on that next Brazilian harvest. But you have to rely on the weather. You have to rely on the acres. Mother nature is a heck of a business partner. So it’s a big risk for them to try to sit out of the US market. And so I think ultimately we’re going to get something, something done. But Brazil is not going away. They’re huge competitor. Whether it’s in the soybean space, the cotton space, the you know, the beef space. There are large sugar producer. They’re large ethanol producer. They’re our largest competitor in the agricultural market globally. And they will continue to be that.

Lydia Jonnson: You know, obviously, U.S. producers want to see some of that grain move, but in the short term, if it doesn’t, I want your thoughts on what domestic grain storage capacity looks like here in the U.S. and if there’s capacity to store that.

John Newton: Well, one of our analysts at terrain, Mark Rosenbaum, has looked at on farm storage and all farm storage. He’s looked at the supplies that we believe that are out there currently, and then looked at expectations for what this harvest is going to bring. Whether you look at USDA yield estimates or the yield estimates that came off the Pro Farmer Tour a few weeks ago. And the reality is it’s going to be pretty tight in some parts of the country, especially in the upper Plains. We’re going to produce more than we have storage capacity, and that’s a challenge. As we just mentioned, China’s not buying any beans. The basis in the in the Red River Valley is very low, about $1.80 under the Chicago price for beans. So that’s a concern. And if you’re not moving them out of the Pacific Northwest, you’ve got to store or move them down into the Gulf. And then our friends in the Delta, down in Mississippi, they don’t have the storage capacity. Typically, those beans. And they’re harvesting now. They’re harvested right into the export terminal. And if we’re not selling them, where are they going to store those beans? That’s the million dollar question.

Lydia Johnson: So all these questions about storage and then, you know, the record crop predictions. Do you think that all this puts pressure on policymakers to, you know, take action on biofuel issues like your own e-15, sustainable aviation fuel, renewable diesel, you know, to expand domestic market access?

John Newton: I mean, it’s an all-of-the-above approach. I mean, the Secretary’s in the United Kingdom now talking about, you know, with Undersecretary Luke Lindburg, I believe, talking about potential market access. They, they reported, record exports of wheat recently. So, export markets, domestic markets through, renewable fuels. E-15 is certainly to have clarity on e-15 from a federal level nationally will help send the signal that, you know, and it won’t be immediate. You know, maybe it’s a several years down the road that we have that fully, that full infrastructure set up to deliver it. But that’s a demand boost. Reduced regulatory burdens help a phase two agreement with China. Help. So again, it’s an all-of-the-above approach, to really help us boost the farm economy and get out of this really three-year tight margin environment that we’ve experienced for crops

Lydia Johnson: Ag committee leaders have been in support of farm aid this fall. And Ag Secretary Brooke Rollins said she’ll be watching commodity markets to weigh how much assistance farmers will need. We asked John Newton, the executive head at terrain how much emergency financial assistance farmers could need.

John Newton: Oh, that one’s probably a little bit above my pay grade. But you look at what’s been done so far through the American Relief Act, $31 billion in economic support and support for catastrophic natural disasters. Last I looked, about $13 or $14 billion had gone out the door. $66 billion in the One Big Beautiful Bill act. Importantly, a lot of that, you know, you know, for the crop that’s in the ground and getting ready to be harvested. That support won’t come until October of 2026. So there is a window there where the support that’s been authorized by Congress is not going to hit the farm, and farmers are going to go out and plant a new crop before that support ultimately arrives and crop insurance is enhanced. But I’ll leave it to congressional leaders. The secretary in the white House to determine how much and what type of support may be needed.

Lydia Johnson: And I want to get your thoughts on well and how that aid package could potentially be funded. I mean, the chairman of the House side Committee says tariff revenue can’t be used, but USDA Commodity Credit Corporation is the funding in that is running pretty low as well.

John Newton: Well, I think, you know, spending years on Capitol Hill working for Senator Boozman and knowing that, if there’s a will, there’s a way. Right. Working with leadership, working with the appropriators, working with Senator Hoven, if Congress wants to do something, if the white House wants to do something, they’ll look and see what tools they have in the toolbox and ultimately deliver for agriculture.

Lydia Johnson: I want to get your thoughts as well. The fed this week cut interest rates a little bit. You know, I’m curious how will that affect finally how will that affect farmers and ranchers as we look ahead because that provide some relief for them.

John Newton: Well, so I think it’s twofold really. And I think you saw a 25-basis point cut this week. Expectations are we could see two more of those. And that should provide, you know, some lower interest rates. Certainly, the challenges if you’re trying to restructure debt and where the treasuries are today, the ten-year Treasury, the two-month, two-year Treasury, the three-month Treasury, right now, they’re all huddled together really tightly is if you’re in a football huddle, they’re all very close together. There’s not much room. If you’re restructuring debt to find any relief on payments for a farmer. And last time we were in a downturn like this, in the crop farm economy, the interest rate environment was significantly different. You could restructure debt and actually save money, for a producer. And the other factor that’s different right now is, is that the losses are much deeper. I think according to USDA data, the average corn farmers losing $161 per acre on this crop. That’s a lot larger than what we saw during the last downturn in the form economy. So, to restructure that debt is much more difficult today. Because of where the ten-year Treasury note is and where nearby Treasury notes are.

Lydia Johnson: We’ll be back with more Agri Pulse Newsmakers. But first, Andrew Huneke has more on the concern in farm country over exports to China. In this week’s Ag by the numbers.

Andrew Huneke: USDA is projecting less than $10 billion worth of U.S. agricultural exports to China during the next fiscal year. If that number holds, it would be the lowest ag export value to China in nearly two decades. This chart shows American agricultural exports to China from fiscal year 2006, all the way to the projected total for fiscal year 2026. As you can see, exports have been above $10 billion since fiscal year 2008. Numbers were low in FY 2019, but they still did not fall below 10 billion. Chinese buyers are still avoiding American commodities. At the end of last month, China had booked no future sales for American corn, soybeans, wheat and sorghum, according to analysis from North Dakota State University. China’s current retaliatory tariffs on American soybeans is making them less competitive than other suppliers like Brazil. It remains to be seen how and when Chinese buyers will return to working with American exporters. But for now, anxiety remains high across farm country for agriculture. I’m Andrew Huneke

Lydia Johnson: New polling shows that the majority of U.S. ag producers see an economic crisis, or the possibility of one on the horizon. We’re joined by Krista Swanson with the National Corn Growers Association and Brandon Lipps with Caprock Strategies on our panel today. To begin, we asked Krista about that report and the state of the farm economy.

Krista Swanson: Yeah, so we surveyed over 1000 corn farmers from across the U.S. And like you mentioned, the results reveal some serious concerns about the state of the economy and farmers financial situations. You know, one of those questions that we asked was, how concerned are you about your farm’s financials compared to a year ago? And two thirds said that they were more concerned. Another question that we asked was, do you think that the US economy is on the brink of a farm crisis? And, nearly 80% said that they believe the US, farm economy is on the brink of crisis or maybe on the brink of crisis. And so, yeah, I think those results are really telling and really important to have out there right now. You know, especially when we think about earlier this month, USDA coming out with some farm income numbers, that, you know, would show or indicate that the farm economy is doing okay. But that includes a lot more than just the crop sector or what some of our farmers are actually feeling.

Lydia Johnson: Krista, there’s a lot of pressure on the nation’s producers, including input cost right now. So I’m curious, are you seeing producer sentiment ripple through? You know, the broader farm economy like equipment and input sales as well?

Krista Swanson: Yeah, there’s definitely that ripple effect throughout the economy. And you know, we have farm input costs, at really high levels, record high levels really since 2022. There was the big jump from 21 to 22. And then now specifically looking at the cost to produce corn, it’s stayed about the same since 2022, but prices have changed a lot since then. And yeah, that, that ripple effect, you know, one of the other results of our survey, we asked, what changes might you be considering for 2026? And 58% of farmers said, you know, cutting back on equipment purchases when we see farmers making those types of changes, the number two was cutting back on fertilizer application. So collectively, you know, if farmers are cutting back on purchases of some of those types of products, that impacts retailers and the people who work at those retail locations and the manufacturers, and really, it just has this ripple effect throughout the supply chain, which impacts, you know, the whole economy and households throughout the economy.

Lydia Johnson: And, Brandon, bring you into the conversation, the Make America Healthy Again Commission released their final report last week reviewing that. What differences do you see from the first edition? And, you know, how did you see ag groups respond to the release of that report?

Brandon Lipps: Sure. I think the response of agriculture overall to the report, was generally positive. We are excited to see that the administration has listened to the ag groups. You’ve all heard Secretary Kennedy talk about how many meetings they’ve had with ag groups between HHS, the White House and certainly USDA since their initial assessment report came out. The thing is, I think all Americans agree that we have a health problem in this country. We have help from with our children, with our adults, and it needs to be solved. And we certainly congratulate the administration for making sure that they’re focused on that but extremely encouraged that they have taken the opportunity to hear from constituents. The Secretary Rollins, I believe, has done a great job advocating for agriculture and ensuring that those across the spectrum who haven’t been involved in agriculture understand that ag inputs go, egg inputs go through a strict regulatory process and scientific review before they’re approved for use in our food supply. I think the administration across the board, under the leadership of President Trump heard that. And they’re going to look at the science and make sure that they’re not making emotional decisions on the front end with regard to agricultural inputs.

Lydia Johnson: The Make America Healthy Again Commission report could have a large influence on the Dietary Guidelines for Americans, which provides a framework for nutrition suggestions. Brandon Lipps helped lead that process in 2020 while working at USDA. We asked him what differences there could be in the new edition of the Dietary Guidelines, expected to be released this fall.

Brandon Lipps: If you listen to the Secretary, Secretary Kennedy, and certainly Secretary Rollins talk about the forthcoming dietary guidelines, they’re going to change that document really, from something that used to be intended for nutrition professionals and guidance for the USDA programs. That was then turned into a consumer facing education campaign. They’re going to go straight and make the dietary guidelines itself, the consumer education campaign. I’m excited to see what the result of that is. Americans are confused about nutrition. Government researchers have been all over the board for decades. We’ve had focus on single, nutrients like fat, sodium, sugar in the past, and that hasn’t resulted in positive change in America’s nutrition outcome. They’re going to focus on broader things to help Americans understand that. We need to focus on whole foods, on healthy foods. But not only that, but that we need to be working on our sedentary lifestyles to move that forward. So we’ve heard we’re going to see a shorter document. They’re going to focus on Whole Foods. We don’t know exactly what that means. Obviously our food supply is built on some processing of food, and not all processing is bad. There is, currently a request for information out between USDA and HHS that’s asking folks to provide input on how we would define ultra processed foods. That’s a critically important, definition as we look at nutrition in this country. So excited to see what comes in the dietary guidelines, but very encouraged. The administration is taking a science focused that they’re, slowing down a bit and making sure that they get this right.

Lydia Johnson: And, Krista I want to get your thoughts on the MAHA Commission’s report as well. I mean, we talk about the state of the farm economy, but President Trump has made, statements that he’d like to see Coca-Cola transition from using corn syrup in their products to sugar. First, your thoughts on the MAHA Commission’s report, and then, you know, do you have concerns about corn syrup demand as well?

Krista Swanson: Yeah. So, I mean, I think we were very concerned with the initial MAHA Commission report out in May. Really, you know, really from the perspective, you know, like, also we care about the science and we wanted to see, science-based approach and some of what was in that first report was not science-based, especially when it came to pesticides, which are really important to corn growers. And used across, you know, nearly all corn acres in the United States. So that was, you know, something that we worked really hard to communicate with the administration and some of the agencies engaged in this. And so we were pleased with the latest report that, you know, didn’t, you know, it took a more science-based approach and, didn’t, address some of the, you know, unfounded pesticide, attacks that were in the first one. So pleased to see that as far as the high fructose corn syrup goes, you know, right now in the situation we’re in, we’re looking at a 16.8 billion bushel corn crop. We certainly don’t want to see any threats to any demand segments, out there. And so, you know, that is, you know, uses about 400 million bushels of corn a year. So it’s a relatively small piece of our demand picture. But again, you know, all pieces of demand are important to us.

Lydia Johnson: And, Brandon, as we wrap up here, analyzing the findings from the MAHA report and looking ahead to the DGAs, you know, what changes do you anticipate to crop demand and participation and assistance programs like SNAP and WIC you know, that these reports could change demand in the future?

Brandon Lipps: In the past, certainly, the Dietary Guidelines are used to set, purchasing restrictions for government feeding programs from school lunch to Snap. But, you know, it’s been $150 billion a year. There’s a big focus on that. They’re now talking about how that might affect the VA and certainly, purchasing, food purchasing for military programs. So just from the government perspective, it can cause a huge impact on purchasing across crops, but also as they’re looking to make the dietary guidelines more consumer focused, if consumers actually listen to the government for the first time, certainly with the platform that this administration has, we could see a huge shift in purchasing with regard to what agricultural products are turned into nutritious food.

Lydia Johnson: We’ll be right back with more Agri-Pulse Newsmakers. But first, Andrew Huneke looks at the improving state of global food security and this week’s map it out.

Andrew Huneke: USDA’s most recent global food assessment report shows food security is improving and could improve significantly by 2035. This map shows the percentage change in global food security in countries that participated in the department’s global food assessment from last year to this year. Food security is expected to improve this year in all countries marked in blue. The countries marked in green are expected to have lower food security this year Every country involved in this assessment is classified as either a lower or middle income country. ERS estimates 13.5% of the population in these countries will be food insecure, which is more than 26% less than last year. Looking ahead, ERS predicts food insecurity to keep decreasing over the next decade. They believe that by 2035, nearly 45% fewer people globally will be food insecure compared to today. For Agri-pulse I’m Andrew Huneke

Lydia Johnson: Thanks for joining us for another episode of Agri-Pulse Newsmakers. Next week, both the House and Senate are out of session. We’ll bring you a special edition of the show from the Women in Agribusiness Summit in Orlando. And there’s still time to register for the Kansas City AG Outlook Forum. You won’t want to miss conversations with AG Secretary Brooke Rollins, USDA Chief Economist Seth Meyer, and other leaders on Sept. 25. Tune in next week and check our website any time for the latest developments on all things food, farm and fuel policy. For Agri-Pulse, I’m Lydia Johnson. Thanks for watching.

Agri-Pulse is a trusted source in Washington, D.C., with the largest editorial team focused on food and farm policy coverage.