WASHINGTON (Gray DC) – Following record highs earlier this year, corn, soybean, and other agriculture commodity prices have recently lost steam.
While some experts predict markets will rebound, Scott Gerlt, an economist with the American Soybean Association, says it’s impossible to be certain, though he says he can look back and dig into some of the policy that’s, in part, causing the volatility.
“A few years ago, China suffered a portable outbreak of African swine fever, which took out as much as 40% of their breeding herd, maybe even more,” said Gerlt. “So there was a loss of demand for U.S soybeans. At the same time, we also had trade friction.”
After President Donald Trump issued tariffs and started a so-called trade war with China, he signed the ‘Phase 1′ trade deal. Under the deal, the Trump administration said they would ease some sanctions on China. In response, China pledged to buy 200 billion dollars in farm goods made by the U.S over a 2-year period.
“That agreement helped open the door for China to buy U.S beans again, even if they didn’t hit the target, it provided a way for everyone to come back to the table,” said Gerlt.
President Joe Biden has publicly disagreed with Trump’s approach but has kept the tariffs in place.
Biden has also put a strong focus on renewable energy, which Gerlt says, could be beneficial to the market with a growing global demand for renewable diesel.
When it comes to commodity prices, North Dakota lawmakers say there’s more to consider.
“Now we have better prices, but we have a terrible drought in North Dakota,” said Sen. John Hoeven (R-ND). “We’re going to have to take steps to help our farmers.”
Sen. John Hoeven says he’s encouraging the United States Department of Agriculture’s Risk Management Agency to travel to North Dakota and gather input from farmers about crop insurance.
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