Global trading of steel, lumber, and rare earth minerals makes our companies and industries and economies work. And yet, right up there with those examples is an agricultural commodity many people don’t like and won’t eat: soybeans.
Soybeans are a huge focus of the trade talks going on between the United States and China. There is a lot at stake between now and the end of the year, especially for U.S. soybean farmers.
China has been actively diversifying their sources of soybeans away from the United States, and they have developed at least two viable alternatives: Brazil and Argentina. The U.S. has less actively (and only lately) started diversifying their customer base for exported soybeans, leaving farmers with a bumper crop and no one to sell it to
Soybean Stats
The United States, Brazil, and Argentina are the three largest soybean producers, serving as the source of 80 percent of the world’s soybeans. China is the largest buyer of soybeans in the world. They account for about 60 percent of global soybean imports, and predominantly use the crop as animal feed.
Soybeans are the highest dollar agricultural and food product exported from the U.S. Illinois, Iowa, Minnesota, and Indiana grow about half of the U.S. soybean crop. It is their farmers who are currently watching these global talks with great intensity.
In 2024, the U.S. exported $24.5 Billion in soybeans in total. China bought half of them. The EU and Mexico bought another $5 Billion together. That leaves $7.25 Billion (roughly 30 percent) in soybeans that were exported to the rest of the world. Today, the Federal government, growers associations, and farmers are trying to flip that script by finding new buyers and new uses for American-grown soybeans.
Geopolitics Gets in the Way
The second Trump Administration’s tariffs have led to a strong response from China, just like they did during the first term. They are once again playing hardball with soybeans. In 2018, they significantly decreased their purchases in response to the trade war, but in 2025 they have effectively stopped buying soybeans from the U.S., looking at Brazil and Argentina as preferred alternative sources.
Ironically, it was a good year for U.S. soybean growers, which pushed market prices down even before China refused to buy from them. This year’s soybean crop is expected to be 4.3 billion bushels - 0.3 million more than we would see in a typical year.
The question of what to do with so many unsold soybeans remains unanswered.
U.S. farmers are reporting losses of $100-$200 per acre, with many considering shifts to other crops in the future. Others plan to store them until the market improves and trade talks cool down. The Trump Administration has discussed a possible Federal government bailout, talking about $10-14 Billion from tariff revenue and giving it to soybean farmers.
Every player in the soybean supply chain will feel the pain of a buying season with no demand from China, from fertilizer companies to farming equipment manufacturers to the transportation network that moves soybeans across the country.
Trump’s next meeting with Xi Jinping is on again, off again, on again, but it is expected to take place in Korea later this month. Ironically, with the federal government closed, USDA reporting has paused, meaning that some of the data we would usually have isn’t available. A nation’s worth of farmers’ eyes will be on that meeting, and their future hangs in the balance.
Even if the upcoming trade talks lead to some U.S. soybeans being exported to China, growers are likely going to need another plan going forward. Whether they find other international buyers or start repurposing crops as a source of biodiesel, China can’t be overrelied upon as a buyer in the future.
China saw the writing on the wall in 2012-2013, when they realized they were overly reliant on the United States for soybeans. They immediately started investigating and investing to solve the problem. The United States now needs to do the same, finding new markets domestically and abroad for this economically critical crop.
