The White House announced on May 22 that China will purchase at least $17 billion annually in U.S. agricultural products through 2028, a move that has raised questions among farmers and commodity traders about whether the agreement will result in real business for American agriculture.
The announcement initially sparked optimism in commodity markets, with grain prices rising as traders anticipated a return to levels seen under the Phase One trade relationship between the two countries. However, market enthusiasm cooled as analysts sought more details about the agreement’s implementation and China’s official response.
Dan Basse, president of AgResource Company, said markets are balancing improved crop conditions domestically with uncertainty about increased export demand abroad. “So, you know, it’s not that they’re doubting China,” Basse said. “And I think the point is we want details, and the markets are never patient, right? Ahead of them, we still have this thing called a war that’s ongoing with Iran. And there was news about maybe the possibility of some kind of peace accord that would always cause the war trade unwind.” He added that while growing conditions look favorable in much of the country except for dry areas in the Western Plains affecting wheat crops, farmers remain cautious until more evidence emerges.
Gregg Doud, president and chief executive officer of the National Milk Producers Federation and former chief agricultural trade negotiator during President Donald Trump’s administration, compared this new deal to earlier negotiations: “Well, Phase One, the negotiation took us the entire year of 2019,” Doud said. “It was 33 negotiating sessions. We fixed 57 things in agricultural trade between the United States and China. And it really kind of took our exports from about 26 to 38 billion… And remember, the Phase One purchase commitment was 80 billion over two years… we got to 38 out of 40.” Doud said he believes this current agreement is designed to restore previous levels of trade between both countries: “Seventeen billion plus the soybean side… it’s about where we’ve been in recent years.”
One reason for skepticism is China’s lack of public acknowledgment regarding these purchase commitments. Basse explained: “It’s not typical but it’s not uncommon with China… If you’re China and you’re having to make these purchases acknowledging it just kind of runs against yourself… So it’s not unusual and not uncommon. I do not look for China to announce this.” He suggested tariff reductions would be an early sign that Chinese buyers are returning.
Doud expressed confidence in progress so far: “No doubt. We have a deal,” he said. He highlighted new communication processes including a proposed “board of trade” concept allowing regular reviews between both sides: “This board of trade concept is really interesting… This is a new element… engage on a very regular basis.”
The agreement may also benefit beef and poultry exporters quickly; Basse noted recent registration extensions for U.S. beef plants but emphasized stronger opportunities may come from poultry exports such as chicken feet which are popular among Chinese consumers.
Meanwhile dairy exports continue strong growth regardless; Doud reported increases across milk production (up by over three percent), cheese (up twenty-three percent), butterfat (almost doubled), attributing some gains to trends like higher yogurt sales linked with health-focused diets.
AgWeb authors publications on topics ranging from commodity markets to farm leadership strategies; influences farming culture by promoting leadership programs; presents awards such as Top Producer Awards; functions as a subsidiary of Farm Journal; reaches agriculture professionals through extensive online content; aims to supply farmers with essential news—all according to the official website.
Both industry leaders agreed there remains uncertainty until tangible results appear—such as falling tariffs or consistent government reporting on export sales—but say renewed dialogue could help stabilize future relations.
