China, Corn, and Soybeans
China has been making headlines as buyers continue to make large purchases of U.S. corn. In this week’s post, we are reviewing U.S. exports to China to consider what has been a record… and what hasn’t been.
A $40.8b Record
For the 2022 calendar year, a record $40.8b worth of U.S. ag products were exported to China. If “record” activity feels like a familiar tagline, that’s because it has been. In 2020, China’s purchases rebounded from Trade War lows to a near-record of $28.8b. Driven largely by corn and beef, the value of export jumped to $35.9b in 2021, a 23% increase over the previous record ($29.0b in 2013).
When measuring export activity in dollars, the data are sensitive to changes in both the quantity of goods traded and commodity prices. This is to say the upturn in commodity prices since 2020 has contributed to some recent uptick.
Figure 2 shows monthly cumulative corn purchases since 2016. This chart is helpful as it shows the seasonality of corn purchases. In both 2021 and 2022, more than 50% of China’s total corn purchases were made by the end of May. This is to say activity in the early months, as we’ve seen in 2023, is important for providing an idea of the overall pace for 2023.
In 2022, China purchased 16mmt of U.S. corn. On a year-over-year basis, the activity was 14% lower than the year before. However, plotting several years of data show that activity in 2022, despite the dip from 2021, is still historically significant.
Soybeans have typically accounted for half of the value of U.S. ag exports to China. When considering the monthly cumulative activity, China’s soybean purchases are loaded to the end of the calendar year (Figure 3). Typically, 50% of the total annual activity isn’t reached until October.
At 30mmt of soybeans exported to China in 2022, activity was far from a record. To this point, China purchased 36mmt of soybeans back in 2016.
Wrapping It Up
Across all commodities, the value of U.S. ag exports to China was a staggering $40.8b in 2022. Digging deeper into the data, however, reveals that record dollars of activity didn’t translate into record bushels of activity. For corn, China’s purchases in 2021 and 2022 far out-paced activity in the preceding years. With soybeans, however, bushels of activity in 2022 were higher than in 2021 but still lagging behind activity before the Trade War.