China Is Slackin’
While U.S. farm exports are anticipated to break the glass ceiling this year, China isn’t holding up its end of the bargain.
This year the U.S. will see farm exports hit $164 billion, shattering the previous record of $152.3 billion set in 2014.
Why the boom? A global pandemic recovery mission plus China’s growing economy. Both of which are boosting export numbers and commodity prices.
China, the number one agricultural importer, spent $133.1 billion on ag imports in 2019. And their growing economy will increase by 189 million middle-class households in the next decade.
It all sounds like a #winning situation, but China is still slacking when it comes to its trade commitments.
Back in January 2020, pre-COVID-global-pandemic, they signed the Phase One Agreement with the U.S. to purchase a minimum of $200 billion more in U.S. goods from 2020 to 2021 in comparison to 2017 imports.
Progress meter: Purchases were only 73% of the year-to-date target as of April and 60% of the total two-year agreement. Ag-specific imports were hovering at 79% at the end of 2020.
In better news, upwards of 4,000 plants can now ship products to China versus the 1,500 that could before the trade deal. China now accepts The U.S. Food and Safety Inspection Service certifications for meat and poultry plants.
Bottom line: China will need to ramp up its trade spending ASAP to uphold its end of the Phase One Agreement.