Much of USDA Secretary Sonny Perdue’s testimony before the House Ag Committee on the rural economy focused, not surprisingly, on the U.S.-China phase-one agreement.
Ag purchase commitments by China under the phase-one deal are a reason to be upbeat, Perdue told lawmakers, even given concerns about the impact coronavirus may have on China meeting them. “None of us obviously know what the impact is going to be,” he said of coronavirus, adding market fundamentals remain strong thanks to robust consumer demand and the new trade agreement.
Perdue related that signals from China are that they “want to fulfill” their purchase commitments under the Phase One deal. On the purchase commitments themselves, he said, “We are going to trust but verify as we go along, and looking on a week-by-week, month-by-month basis of where they are in that regard.” Regarding soybeans, Perdue said, “We are hopeful, we are optimistic,” and he predicted China would begin to ramp up purchases from the U.S. “in late spring and summer,” as the market shifts from South American producers.
USDA will be watching carefully to see whether that shift occurs, he added.
Perdue also noted optimism on getting U.S. rice into China, pointing out that elimination of non-tariff barriers like the ones that have shut U.S. rice out of that market were an integral part of the phase-one deal.
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