As the trade war between the U.S. and China heats up, North Dakota soybean processors are watching their selling season go to ruin.
The head of the North Dakota Trade Office says Chinese buyers have killed all of their firm orders for food-grade soybeans, valued at $1.2 to $1.5 million. The cancellations happened just prior to and immediately after tariffs went into effect in July.
North Dakota processors usually sell $30 million to $35 million in food-grade beans to China annually - with most of those contracts finalized in the summer months. They get those beans from farmers who they contract with before seeds are planted.
“Our food grade processors are normally working between July and August to lock in contracts with foreign customers,” says Simon Wilson, Executive Director of the North Dakota Trade office. “With China now on the sidelines they are working other Asian countries to see where they can sell the product."
He adds that even if they find new buyers, sales would be less profitable, "as moving to new customers drives lower margins than established ones.”
According to the state’s trade office, food-grade soybeans represent 6 percent of total foreign sales, with China being the largest buyer.