China's Soybean Buys Fall Short, U.S. Farmers Face Oversupply and Brazilian Competition

China's recent trade deal with the U.S. to resume soybean imports has done little to restore confidence among American farmers, as Beijing's purchases remain far below pre-trade-war levels and face stiff competition from cheaper South American supplies. Under an agreement announced in late October, China pledged to buy 12 million metric tons of U.S. soybeans by year-end and 25 million tons annually for the next three years. However, with U.S. exports to China projected to drop 32% in 2025 compared to 2024, farmers are grappling with oversupply, high production costs, and a shifting global trade landscape dominated by Brazil and Argentina.

The deal, brokered during a tense standoff between President Donald Trump and Chinese President Xi Jinping, lifted retaliatory tariffs on U.S. agricultural goods but left a 13% tariff on soybeans intact. This has kept U.S. soybeans at a price disadvantage compared to Brazilian imports, which have surged in recent months. Traders report Chinese buyers have secured 10 cargo shipments of Brazilian soybeans for December and additional loads for early 2026, capitalizing on lower prices. "Brazil is now cheaper than the U.S. Gulf, and buyers are taking this opportunity to book cargoes," said one trader at a Chinese oilseed processing firm.

The shift has left U.S. farmers like Scott Gaffner of Illinois in limbo. Gaffner, whose family farm typically sells 40% of its soybeans to China, reported zero exports this year until a late-October sale. "We just want to do business," he said, echoing the sentiment of many in the Midwest, where soybean production accounts for 14% of U.S. agricultural exports. Wisconsin, a key soybean state, faces particularly dire prospects, with soybean prices below break-even levels for producers and negative profit margins expected in 2025.

Structural challenges compound the trade uncertainty. China's soybean stockpiles have swelled to a record 10.3 million tons at ports, while processors hold 7.5 million tons in reserves, limiting appetite for further imports. Even with the trade truce, state-owned Chinese buyers have yet to commit to large-scale purchases, leaving the Trump administration to threaten tariff adjustments to enforce compliance. "The randomness of trade policy has made it impossible to plan," said Paul Mitchell, an agricultural economics professor at the University of Wisconsin-Madison.

Federal aid programs, including a $30 billion relief package for farmers, offer temporary relief but fail to address long-term systemic issues. Critics argue such bailouts risk inflating land prices and creating dependency, as seen in past cycles. "We're constantly throwing money at farmers to get them through one more year," said Joe Maxwell of Action Farm Fund, a farmer-led advocacy group.

While the trade deal provides a baseline for U.S. soybean exports, experts caution that China's commitment remains unproven. "The 25 million-ton annual target falls short of pre-pandemic averages," noted Kang Wei Cheang of StoneX Group. With Brazil's dominance in the soybean market unlikely to wane and U.S.-China relations still fraught with geopolitical tensions, American farmers may struggle to reclaim their lost market share.