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* Tuesday press release…
Governor JB Pritzker announced today that Taiwan has made a $2.2 billion commitment to purchase Illinois corn and soybeans over the next two years.
“Illinois corn and soybean producers have cultivated a world-class industry with customers in all parts of the world, and this $2.2 billion commitment is a testament to their dedication and hard work,” said Governor JB Pritzker. “When Illinois’ agricultural economy thrives, so do working families all across the state. I’m committed to supporting our state’s leading industry and opening up new opportunities for our farmers to sell their goods and make a good living.”
Illinois and Taiwanese associations signed two $1.1 billion agreements to purchase Illinois crops between 2020 and 2021.
The Illinois Corn Marketing Board and the Taiwan Feed Industry Association signed a letter of intent marking Taiwan’s intentions to buy 5 million metric tons (equivalent to 197 million bushels) of corn and 0.5 million MT of corn co-products (distiller’s dried grains with solubles).
The Taiwan Vegetable Oil Manufacturers Association and the Illinois Soybean Association signed a letter of intent marking Taiwan’s intentions to buy between 2.6 million and 2.9 million MT (equivalent to between 96 million and 97 million bushels) of soybeans.
* One Illinois…
China was not a major importer of Illinois corn before Trump launched his trade war last year, but the deal does much to replace the $1.3 billion in Illinois soybeans sold to China in 2017 — about a quarter of the state crop. Last year, retaliatory tariffs China imposed, along with the African swine fever outbreak that wiped out an estimated third of the country’s herd — eliminating much of the need for feed crops — cut those imports 91 percent to $116 million. Last year, by comparison, Taiwan bought just over $400 million in Illinois soybeans.
* Crain’s…
“Lifeline? Really, that’s about what it is,” said Bobby Dowson, international marketing representative for the Illinois Department of Agriculture. “It’s hard to replace the 400-pound gorilla on the block.” […]
The U.S. Soybean Export Council has pushed for farmers to look for alternatives to the Chinese market. Both council CEO Jim Sutter and Chief Financial Officer Ray Young at Archer Daniels Midland doubt U.S. soy sales to China will recover to previous levels. […]
In addition to Taiwan, Mexico and the Dominican Republic are scooping up Illinois soybeans, Dowson said.
* Reuters…
Some traders expressed skepticism at the deals, noting buyers generally do not make commitments with individual U.S. states and there was no legal language in the letter of intent that ensures the purchases will be made.
“There’s no guarantee, but they always have fulfilled what they’ve said they would do,” said Roger Sy, chairman of the Illinois Corn Marketing Board, who attended the signing in Chicago on Tuesday morning.
“So far, they’ve been a very reliable customer.”
posted by Rich Miller
Wednesday, Sep 25, 19 @ 11:51 am
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Taiwan is taking the opportunity to engage in some Dollar diplomacy themselves.
Comment by Fav human Wednesday, Sep 25, 19 @ 12:00 pm
==Some traders expressed skepticism at the deals, noting buyers generally do not make commitments with individual U.S. states and there was no legal language in the letter of intent that ensures the purchases will be made.==
So if Iowa or farmers from some other state sell their corn and soybeans too, who am I to complain?
Comment by Da Big Bad Wolf Wednesday, Sep 25, 19 @ 12:05 pm
In 2017 China bought about $1.2 billion of IL soybeans, this year they may buy $300 million. That’s the 400 pound gorilla. Its gonna be tough to get that share back after the trade war and Chins’s pig herd declines.
Comment by Cool Papa Bell Wednesday, Sep 25, 19 @ 12:08 pm
That is trade war and ASF. They don’t have any pigs to feed.
Comment by Not a Billionaire Wednesday, Sep 25, 19 @ 12:16 pm
The African swine flu has killed millions of hogs in China. I expect Taiwan is increasing its herds and exporting more pork to the mainland. They need feed to support this shift.
This also allows the Chinese to work around their own regulations while saving face.
Comment by Last Bull Moose Wednesday, Sep 25, 19 @ 12:21 pm
Thought I read that China had quietly removed the tariff on soybeans and pork. If so should greatly improve Illinois ag prospects.
Comment by Captain Obvious Wednesday, Sep 25, 19 @ 12:35 pm
China might have lost as many pigs as the entire US pig herd due to ASF… But they still have millions more. They will be using someone’s soybeans for years to come. Better ours than those from Brazil.
Comment by Cool Papa Bell Wednesday, Sep 25, 19 @ 12:47 pm
Last yr. $10.10
This year $9.02
When world supply consistently outpaces world demand this is what you get.
Comment by Blue Dog Dem Wednesday, Sep 25, 19 @ 1:02 pm
Excellent news. Glad IL was able to secure this deal before another state could beat us to it
Comment by Lester Holt’s Mustache Wednesday, Sep 25, 19 @ 1:06 pm
It’s a good start at regaining trade that has been lost in the Chinese tariff saga. Thanks Governor! This has been an extremely difficult year for Illinois agriculture.
Comment by Rural Survivor Wednesday, Sep 25, 19 @ 1:27 pm
It still thrills me to no end to have a governor who does *this* rather than one who does nothing but drop G’s and complain all day about Madigan, Chicago, “AFCAMMY,” blah blah blah.
Comment by Nick Name Wednesday, Sep 25, 19 @ 2:23 pm