Deglobalization is nothing new in agriculture — the U.S. has been losing export share for decades. As rapid expansion and modernization continue around the world, the ag industry is navigating new pressures and opportunities to remain competitive. Experts who work directly in global trade say American farmers need to recognize what’s changing and what it could mean for their operations.
China Trade Framework Details
U.S. farmers were excited when President Donald Trump and Chinese President Xi struck a trade truce and framework in South Korea on Oct. 30, especially the 12 MMT of soybean purchases. However, the lack of clarity on if the commitments were for the calendar year or the marketing year left the market in disarray.
At the 2026 Top Producer Summit, Jiang Lyu, minister for economic and commercial affairs at the Chinese Embassy in the U.S., confirmed the 12 MMT is for the current marketing year.
“You do hear those numbers from President Trump, Secretary Bessent and others,” Lyu says. “All I can share with you is that China is pretty sincere in terms of having a relationship that is anchored on mutual respect, reciprocity and, most importantly, mutual benefit. We believe stability in this trade relationship, including in the ag trade, is very important, and we hope this mutually beneficial relationship will continue.”
To date, U.S. Trade Representative Jamieson Greer says China has purchased 12 MMT, but the purchases have only been made by Sinograin and Cofco, which are government entities. The 13% reciprocal tariffs China still has on U.S. soybeans makes it unfeasible for private crushers to buy and is 10% higher than the tariffs on Brazilian soybeans. The question remains, when will China eliminate that tariff?
Lyu says he’s not sure on the timing, but that China would like to advance discussions between the two countries to the point that tariff could be eliminated. There is hope that can happen when the two leaders meet in April.
“This is, to borrow your word, a trade truce,” said Lyu. “So the truce has a time of one year. We would like this one year to be extended and preferably into eternity.”
Opportunities to Expand China Trade
The Chinese market is ripe for expanding trade, according to Lyu, through new areas of U.S. and China agricultural cooperation. He cites platforms, such as the China International Import Expo, will bring new opportunities for U.S. agriculture.
The China-U.S. economic and trade relations benefit both sides when they cooperate, adds the minister, but harm both when they are confrontational. However, he says the Chinese market has broad prospects and large capacity, and bilateral trade meets mutual needs.
China to Buy 8 MMT More Soybeans?
Meanwhile, President Trump posted via social media on Feb. 3 that China had agreed to buy another 8 MMT of old-crop soybeans from the U.S. Why would China purchase from the U.S. when Brazil’s soybeans are over $1 cheaper than U.S. soybeans?
While this doesn’t make economic sense, Susan Stroud with No Bull Ag says these political goodwill purchases are being made by government entities to put in their reserve. Lyu says the relationship needs to be stabilized before moving forward.
“China and the U.S. need to reposition their relationship overall so that we have a bigger-picture arrangement in which China is no longer considered as a rival competitor to an extent, not a rival or enemy of the United States,” Lyu says. “There are so many things happening here that also hamper China’s interest, such as Chinese exports into this country or the Chinese investment into this country, so we would like this relationship to be totally benign.”
Under the latest trade framework, China is also expected to buy 25 MMT of U.S. soybeans for the following three years.
“If you consider the potential for 25 million metric ton per year in three subsequent years that’s still well below the five-year average,” Stroud says. “China has yet to confirm any of these amounts that have been touted by Washington.”
There’s still the lingering question about what happens after that? The U.S. is already a secondary supplier of soybeans to China behind Brazil.
Brazil Primary Supplier of Soybeans to China
Brazil is producing over 6.5 billion bushels of soybeans annually, and Stroud says their rapid conversion of pastureland into soybean production has reshaped global flows.
“A 5% average increase in soy area annually has taken them from an emerging market to a global powerhouse in the blink of an eye,” she explains.
Brazil first outexported the U.S. in 2012. Today, exports more than double the U.S. program. Since the last trade war, Stroud says Brazil has added 30 million acres of soybeans, which is a harvested area larger than the top four U.S. soybean states combined in 2025.
“In the past 25 years, Brazil has accounted for half of all of soybean global area expansion,” Stroud says. “When you have a tremendous growth in production, naturally, you’re getting rid of it via export.”
Stroud says Brazil is actively making infrastructure improvements from farm to port to not only accommodate its expanding production but also improve efficiency. China actively has a hand in this as Brazil is their number one supplier of soybeans. On average, 50% of Brazil’s total soy demand is exported to China compared with one in four bushels of U.S. soybean demand.
Brazil Has Room to Expand Soybean Acres
Brazil has the potential to expand acreage by converting an available 70 million acres of degraded pasture to cropland. Aaron Edwards with Santos Springs LLC says Brazil’s growth is far from over.
“For every acre of row-crop land, there’s two acres of degraded pasture,” Edwards says. “Without any deforestation, a significant amount of that land could become row crops.”
Agronomically, he says, with a few tons of lime, phosphorus and minimum tillage, in two or three crops these fields could be producing on par with Midwestern “I” states.
“Every acre you bring into soybean production, about one-third also become double-crop corn or double-cropped cotton acres,” Edwards adds. “Brazil expansion is a bear.”
Then there’s the potential of improvements via irrigation. He’s hearing estimates of 10 million acres going under pivot within the next decade.
“It’s a tropical climate, so one acre of irrigation is three crops a year, depending on the mix, or seven crops in two years,” Edwards explains. “That right there is 30 million acres equivalent of production.”
Currently, they have less than 15% on-farm storage and that leaves potential for better margin management on the table.
“Basis swings on soybeans are $2 to $3,” Edwards says. “Margins can increase just by putting in on-farm storage and managing basis.”
It takes a massive amount of capital investment to drive acreage and yield growth, he adds, but it creates long-term supply pressure in global oilseeds.
The Brazil “Paradox:” Expansion Amid Bankruptcies
The paradox, Edwards says, is how does Brazil rapidly expand amid bankruptcies, but he thinks the two can coexist.
“The primary economic incentive isn’t operating margins — it’s land appreciation from converting pasture to cropland,” he says.
He thinks cash flows and aggressive expansion increase supply and lower prices, making periodic financial stress inevitable.
“The land appreciation of developing these lands is what’s causing the expansion, causing the bankruptcies and putting soybeans on the market at such a cheap price,” Edwards explains. “However, the microeconomic incentives of expansion are there as long as there’s land appreciation.”
Rethinking Global Competition in Soybeans
The U.S. still has structural advantages such as infrastructure and logistics, plus capital, strong risk management and supportive policy, according to Edwards.
“The U.S. is still the best place to do business, and at the end of the day, you run a business,” he adds. “We have better logistics, better capital markets, better infrastructure, better risk management tools and more supportive policy. Those are the things that allow you to run a successful business.”
With that said, Edwards says farmers might have to rethink global competition. This includes who produces the most soybeans, and who delivers the cheapest export supply? Where can farmers sustainably build profitable enterprises? He says leadership in volume doesn’t always equal leadership in farm profitability.
U.S. Needs to Pivot to Domestic Demand
The U.S. is already expanding crush a projected 30% in the next few years to process bean oil to meet the growing demand for low-carbon fuels. Stroud says that might be one of the best options for the U.S. to find more domestic demand and decrease its dependence on China and exports.
“Right now, we’re about 50% of the way there in the buildout,” Stroud says. “This marketing year, we are adding 115 million bushels of annual crush capacity. Compare that with typical exports to China in the 1-billion-bushel range and there’s really no comparison. But, we are moving the needle.”
She cautions this growth is policy dependent, but the U.S. is also exporting more soybean meal than ever before.
Argentina Viewpoint
Lee Trimmer with Green Shoots LLC has spent the last 25 years working in Argentina.
“We have great soils, we’re close to the ports and we can create crops at a better price than other places,” he says. “Honestly, it comes down to who can do it cheaper.”
However, there is a paradigm shift happening with Brazil becoming the largest exporter. As farmers, he says, they have had to reinvent their business model.
Trimmer says Argentina is also one of the most complex and unforgiving places to be a farmer. His plan was to buy machinery, build a storage facility, stay away from livestock, and try to start buying land. However, the business he built in Argentina was the exact opposite.
He says the key to staying competitive has been to find great mentors. He is also involved in a peer group in Argentina known as CREA in which farmers open up their farms to bring valuable experiences to other farmers. They talk about what works or doesn’t work on their farms and provide other advice.
“I think a lot of it has to come down to farmer savvy, education, getting to know your peers, finding niches and getting ideas from other producers,” Trimmer says.
He told farmers at Top Producer Summit they can’t do anything about trade wars with China or Brazil increasing exports every year. But they can look to their own farms and make changes that open up new opportunities.
“I encourage farmers to put time and money into educating themselves, not just on producing more bushels. Dig down deeper to make your farm and legacy resilient for the future,” he says.