China has not bought a bushel of soybeans from U.S. farmers this year. What happens to the crop now?

Core Insights - The U.S. soybean industry is facing significant challenges due to retaliatory tariffs imposed by China, which have increased the overall duty rate on U.S. soybeans to 34% by 2025, making U.S. soybeans prohibitively expensive compared to South American supplies [1][2] - China has not purchased any U.S. soybeans for the 2025-26 marketing year, marking a drastic shift as it previously accounted for around 52% of U.S. soybean exports [3][12] - The U.S. is expected to lose soybean market share to South America permanently, as China increasingly sources soybeans from Brazil and Argentina due to lower prices [4][5] Tariffs and Market Dynamics - The combination of tariffs and trade wars has blunted the competitive advantage of U.S. soybean growers, leading to a significant decline in exports to China [2][3] - U.S. soybean prices have been negatively impacted, with current prices around $10.13 per bushel, down from profitable levels of $14 to $15 [16] Shifts in Supply Chains - China has been building its reserve storage of soybeans, allowing it to reduce reliance on U.S. supplies [7] - Investment in Brazil's agricultural infrastructure by China has facilitated increased soybean production there, further diminishing U.S. market share [8] Domestic Demand and Biofuel - The U.S. biofuel program may help replace some lost soybean demand, with biomass-diesel production rising significantly from 1,471.7 million gallons a decade ago to 4,292.4 million gallons in 2023 [10][11] - However, the U.S. will not be able to fully compensate for the lost demand from China through domestic biofuel policies alone, as it will take years to build the necessary infrastructure [11] Economic Impact on Farmers - The lack of Chinese purchases is expected to create substantial losses for U.S. farmers, leading to storage issues and financial strain [13][15] - Input costs for farming have been rising, further squeezing profit margins for farmers [17]