China is pigging out on American exports, and U.S. farmers are bringing home the bacon.
The United States is on track to ship a record $37.2 billion of farm goods to China in 2021, the U.S. Department of Agriculture forecasts, as the People’s Republic gorges itself on everything from beans to beef.
Under a trade deal in early 2020, Beijing made lofty promises to scoop up U.S. agricultural products. But all bets were off as the pandemic swept in, prompting Washington to step in with aid for farmers.
Then, as government payments started to dry up, leading USDA economists to forecast an 8% dip in farmer income this year, a flood of new agricultural exports to China came just in the nick of time:
- In May, China’s imports increased over 50% from a year earlier – the biggest jump in a decade. The menu features soybeans, corn, wheat, beef, and poultry cultivated on American farms.
- The overseas buying spree leaves China responsible for 23% of total U.S. agricultural exports, currently estimated at $164 billion.
The Brazil Bonus: With Brazil’s drought curbing supply, corn and soybeans are looking more like delicacies than commodities. The global surge in food prices is also helping U.S. farmers get their ducks in a row.
Appetite For Construction: China’s not just interested in snacking. The People’s Republic is also dropping major yuan on raw materials, even as prices for metals like steel and copper soar amidst receding worldwide lockdowns. Sometimes, money is no object.