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Corn could offer clues to China’s $17 billion ag purchase pledge

An ag economist says he’s watching for signs China is moving toward fulfilling its $17 billion non-soybean ag purchase commitment.

Ben Brown with University of Missouri Extension says China has been ramping up corn purchases recently due to production challenges, and there are only a few commodities that could realistically account for a large share of China’s commitment.

“There’s really three categories historically: corn, beef and cattle products, and cotton,” he says. “Those make up two-thirds of shipments. We don’t have enough beef products to send them to eat at that $17 billion total. Cotton is a bigger question. China is a big buyer of cotton and we’d like to export more, but with some of the drought in the southern United States, cotton exports are likely going to be limited. If you take those off the table, along with pork and soybeans due to definition, corn and corn products are what’s left.”

One of the details that emerged from last week’s meeting was a new “30-for-30” trade framework, that identifies about $30 billion in goods from the U.S. and China that could receive more favorable tariff treatment. Brown says the U.S. list includes several ag products, including corn, beef and cotton.

“I think maybe that was them starting to hint at the $17 billion in non-soybean commitments. We’ll see,” he says. “China still hasn’t bought a whole lot of non-soybean ag products from us. Some, but not much, and certainly not enough to fulfill the $17 billion in ag products.”

Brown says he’s not expecting much additional progress as trade negotiations continue through the end of the year.