Latest Trade War Salvo Gives Farming Giant ADM a More Valuable Cash Crop

American farmers are stuck between the plow and the deep furrow of the US-China trade war. For Archer Daniels Midland, that’s a good thing. 

On Wednesday, shares of the crop trading and processing giant soared to a 52-week high as the president threatened “retribution” over China’s decision to stop buying US soybeans. So how is ADM making hay out of market chaos?

Oil Slick

“Tough” doesn’t begin to describe the year for US soybean farmers. China has long been a top buyer of the US crop, purchasing roughly half of all the soybean exports in 2024. That amounted to an estimated $12.8 billion in revenue for US farmers, per CNBC estimates. This year has been much different. As part of the tit-for-tat trade war, Beijing has slapped US soybeans with a 23% tariff. In reality, the tariffs have amounted to an all-out embargo; from May through at least September 11, China hasn’t made a single US soybean purchase, according to the US Department of Agriculture. Instead, the country has largely relied on importing massive amounts of soybeans from South America.

US farmers have been devastated. The White House has floated a bailout of at least $10 billion for the industry (the president of the American Soybean Association, meanwhile, recently told NPR that farmers would prefer a trade deal that reopens markets to a bailout). Now, the administration has also found its likely form of retribution: a complete embargo on Chinese cooking oils. That’d be a win for ADM, one of the major oilseed processors in America, hence its 2.4% jump on Wednesday. It’s also an escalation of a years-long, bipartisan mission to protect American cooking oil producers:

• Last year, the US purchased a record $1.2 billion worth of Chinese cooking oil, according to Census Bureau data, representing 43% of all Chinese exports of the good. The rise came as the cooking oil was repurposed to make renewable diesel fuel.
• That sparked concerns that US farmers were losing out on a growing market, which prompted the Biden administration to block the foreign product from qualifying for key tax credits. In June, the Trump administration imposed further barriers to discourage the importing of foreign cooking oils for use in renewable diesel fuel.

Fellow Soy Boys: Domestic soybean farmers aren’t the only ones receiving a bailout from the US government. Last week, the White House announced the framework for a $20 billion financial lifeline to Argentina to help prop up the nation’s flailing currency. That has sparked backlash from farmers, who view Argentina as a key competitor. In lieu of American soybeans, China has begun purchasing massive amounts of Argentine soybeans since Buenos Aires temporarily dropped its grain export taxes. In a trade war, it seems best to play both sides.