Taiwan commits to $2.2B ag buy
Pritzker praises deal to export Illinois corn, soybeans in midst of Trump trade war
Illinois soybean farmers will gain some much-needed relief from an export deal with the Taiwan Vegetable Oil Manufacturers Association. (One Illinois/Ted Cox)
By Ted Cox
Taiwan is stepping up to take the place of China amid President Trump’s continuing trade war.
Gov. Pritzker on Tuesday praised deals sealed with Taiwanese importers to buy $2.2 billion in Illinois corn and soybeans between 2020 and 2021.
“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,” Pritzker said in a statement from a news release on the deal. “When Illinois’s 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.”
The $2.2 billion is split down the middle on two $1.1 billion deals. According to the Governor’s Office, the Illinois Corn Marketing Board and the Taiwan Feed Industry Association signed a letter of intent for Taiwan to buy 5 million metric tons of corn (about 197 million bushels) and 0.5 million MT of corn products, such as distiller’s dried grains with solubles.
Meanwhile, the Taiwan Vegetable Oil Manufacturers Association and the Illinois Soybean Association signed a letter of intent for Taiwan to buy between 2.6 million and 2.9 million MT of soybeans (between 96 million and 97 million bushels).
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.
But the deal is fraught politically and unlikely to ease tensions with China. Taiwan calls itself the Republic of China, as that’s where the losing side in the civil war sought sanctuary after Maoists declared the People’s Republic of China on the mainland in 1949, and its economy is in the top 25 among nations globally, but China still technically claims the island as a breakaway province.
Nonetheless, state agriculture leaders cheered the relief for Illinois farmers.
“It’s no secret that 2019 has been a hard year for Illinois farmers with a tough growing season and trade uncertainty,” said John Sullivan, director of the Illinois Department of Agriculture. “It’s good to know we have trade partners like the Taiwan Vegetable Oil Manufactures Association and the Taiwan Feed Industry Association who help provide some certainty when we need it most.”
“We value the longstanding trade relationship we’ve established with Taiwan,” said Doug Schroeder, a Mahomet soybean farmer and chairman of the Illinois Soybean Association, which represents the state’s 43,000 soybean growers. “We recognize the critical importance of their trade agreement, underscoring their role in helping to maintain the viability of our soybean crop and our livelihoods. We look forward to strengthening the relationship between our two countries and our soybean industry for years to come.”
“This Taiwanese delegation has invested quite a bit of time in understanding corn farmers and corn farming here in the U.S., and they remain committed to us,” said Roger Sy, a Newman farmer and chairman of the Illinois Corn Marketing Board. “We remain committed to Taiwan, as well, and look forward to shipping Illinois corn their way.”
Illinois is the top soybean-producing state in the nation and the second-largest producer of corn, behind Iowa, exporting more than 360 million bushels of soybeans annually and an average of 877 million bushels of corn.
The Trump administration has passed out $28 billion in bailout payments to U.S. farmers hurt by his trade war with China, even though the Illinois Soybean Association complained last year that they need “trade, not aid.” Critics have pointed out that’s more than twice the $12 billion the Obama administration spent to bail out the U.S. auto industry during the Great Recession a decade ago.