In September 2023, we highlighted that Brazil, one of the BRICS nations, had overtaken the United States in becoming the world's top corn exporter. The sudden shift of China buying Brazilian corn over the US lacked a clear motive at the time. However, now, a new Bloomberg report reveals the shift appears to be "partly in retaliation" against a wave of legislation aimed at stopping Chinese citizens and companies from owning US farmland.
US Agriculture Secretary Tom Vilsack suggested that China is purchasing Brazilian corn and soybeans mostly in retaliation against Republicans in red states that have enacted or are considering laws barring foreign ownership of farmland.
Vilsack pointed out a recent conversation with his counterpart in China, who mentioned a situation in which the Arkansas government forced seed company Syngenta AG, controlled by China's Sinochem Holdings Corp., to dispose of 160 acres of farmland in the state.
Republican governor Sarah Huckabee Sanders signed into law the legislation banning foreigners from owning Arkansas farmland. The US ag official said this was part of the constant "ripping" of China that prompted Beijing to ditch US farm goods for ones in South America.
"We had a trade deficit of $6 billion in the first quarter of this fiscal year; China's purchases are $6 billion less than they were a year ago," Vilsack said in an interview on Tuesday, adding, "Why would that be? Is it just Brazil, or was there a reason why the Chinese ag minister asked me about Syngenta?"
Vilsack warned that the conservation with the Chinese ag minister is a major "signal" for American farmers.
He pointed out that US farmers need to "diversify away from over-reliance on China" on ag exports and focus on other countries in Asia, Africa, and Latin America.
China's retaliation against the US will only grow as more than two-thirds of states - primarily Republican-controlled - enacted or are considering laws limiting or barring foreign land ownership.
China is "an enemy," South Dakota Gov. Kristi Noem, a Republican and Trump supporter, recently said.
"They are buying up our entire food supply chain and when America can't feed itself and we rely on another country to feed us it becomes a national security issue," Noem recently said. Last month, the governor signed into law a bill that bars China and five other countries from purchasing farmland in the state.
While China shops in South America and Bidenomics has been a failure for blue-collar America as inflation remains elevated, recent US Department of Agriculture forecasts show US farmers are poised for another year of financial misery. They are estimated to face the largest income drop since 2006 this year.
Whatever happened to China following the various phases of the trade agreement under Trump and meeting certain quotas on purchasing US farm goods?
