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Trade talk outcomes, what we should want to see.
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Posted 1/8/2019 08:11 (#7229054)
Subject: Trade talk outcomes, what we should want to see.

The South China Morning Post had an article about the current trade war negotiations. There hasn't been any official news but it appears that the main issues being discussed are, Chinese purchases of US agricultural & industrial products, treatment of foreign businesses in China, and intellectual property protections.
The treatment of foreign businesses and intellectual property protections will require changes in Chinese law and frankly I'm not all that concerned about some multinational stock company expanding their business in China or losing their intellectual property because it's not skin off my back.
But, it's no secret that we have been steadily losing market share to the Brazilians for years. Where we once had the majority of China's soybean business, we're now down to less than 1/3. Now the trump administration is using the words, "substantial increases" but what exactly does "substantial increases" mean? Does substantial mean more than the recent paltry 3.5 MMT or does it mean more than the 36 MMT we did a couple of years ago.
It seems to me that this is an ideal opportunity for row crop agriculture to come out ahead, something that doesn't come along too often for farmers. China imported over 90 MMT of soybeans last year. It seems to me that we should have at least half that business if not more.
I think that we should insist that the trump administration push for 50 MMT or more. Given the fact that state-owned enterprises buy a good share of the soybean imported that doesn't seem unreasonable.
We shouldn't consider any trade deal a success unless we get something like this.
Something like this is especially important given the fact that ever higher corn yields and administration policy against ethanol means that we need to decrease corn acres. Another 10-15 MMT of soybean exports could take up some of those retired corn acres.
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