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Analyst: U.S. can’t quickly replace lost Chinese demand

The Trump administration is exploring ways to offset lost ag exports to China, but a market analyst says there’s no quick and easy way to make that happen.

Ted Seifried with Zaner Ag Hedge says “it really feels like they’re desperately trying to find any solution to a problem that doesn’t have a near-term solution.”

On Thursday, Ag Secretary Brooke Rollins said she’s been talking with two countries that want to buy U.S. ag products, and the U.S. is in discussions with some countries in South America to crush soybeans.    

Seifried tells Brownfield “the problem with that is it doesn’t look like there’s a lot of crush capacity in other countries that would be enough to offset the lack of Chinese export demand.”

He says in addition to negotiating new trade agreements, the U.S. needs to develop the infrastructure to crush an extra 800 million bushels of soybeans to offset the lost demand from China.

Seifried says the commodity markets didn’t respond to the trade headline, despite the escalation in the U.S. and China trade war that’s happened in the last week.