President Donald Trump said U.S. farmers would see "big and fast" benefits from a temporary trade truce with China on Monday, and farmers in central Kansas are hoping those words ring true.
Over the weekend, Trump and Chinese President Xi Jinping agreed not to add further tariffs to the current trade war between the two countries, and to reduce those currently in effect.
The agreement was struck as an aside to the Group of 20 Summit in Buenos Aires, Argentina, and the temporary truce is supposed to last through a 90-day negotiation period.
If Trump’s promises hold true, it could be a great late Christmas gift for farmers — especially those growing soybeans and sorghum — who have been negatively impacted by the trade war.
"I think we, as farmers, are all ready to get back to reestablishing the markets we have spent so much in time and dollars creating," said Adam Baldwin, a McPherson County farmer. "The longer the trade war takes, the greater the risk of losing market share we once had."
Futures markets saw a boost following the reports of the temporary deal coming out of the G20 Summit but didn’t maintain those early gains. Baldwin said no negative news is good news, but it won’t make much of a difference in the markets until tariffs are removed or a real deal is struck.
"It is my belief that the market is going to have to see sizable physical Chinese purchases before we can build maintained strength," he said. "Especially in soybeans, which has burdensome stocks weighing on it."
He also said a merchandiser he has worked with expects grain sorghum to enter back into China if import tariffs are lifted, but until then, it will be difficult for exporters and importers to find workable deals.
"Right now there is too much risk and too many unknowns for merchandisers to get aggressive buying grain or making sales," Baldwin said.
Unknowns have marred the trade negotiations with China, causing low market prices in the United States. While the temporary deal doesn’t make the situation better, it doesn’t make it worse, and many are looking anxiously to the scheduled talks.
"This is certainly a step in the right direction, especially since future tariff hikes are on hold," said Rep. Roger Marshall. "But the real test will be what comes from these negotiations in the next 90 days and if we can hold China accountable to an agreement. My track coach always used to say, ‘Don’t tell me, show me,’ and so far, we’ve gotten a lot of talk from China but very little actual change."
Marshall said he believes the White House has heard Kansas farmers, taking note that while many support holding China accountable for unfair practices, they want to see an agreement. He called for stability and certainty for farm country out of the trade deal.
He also agreed with Baldwin that uncertainty has affected the markets, and significant changes are needed to make a real impact on the current markets in Kansas.
"Earlier this week we saw soybean prices rally, getting close to $8 per bushel in Hutchinson, but they remain far below pre-trade war levels," Marshall said. "Generally, I think the markets are going to need more concrete details on what China plans to buy to determine the long-term outlook of U.S. beans."
Although a new deal could be much more favorable to U.S. farmers than previous agreements, the longer negotiations take and tariffs stay in place, the deeper the hole becomes for U.S. farmers. Some support vying for a fair deal but worry it may come too little, too late.
"On one side, I want it just done," said Jenny Burgess, who farms in Reno and Rice counties. "We personally can’t wait to see what stock markets will do. We have bills to pay before the end of the year. On the other hand, I don’t want to rush it. Good deals are not rushed through, they are thought through. That’s the way any business decision needs to be made."