Soybean plants begin to show signs of growth at Mark Tuttle's soy farm in Somonauk, Illinois, U.S., May 30, 2024. REUTERS/Jim Vondruska

By Tom Polansek

WATERMAN, Illinois (Reuters) -A trade mission to Nigeria. A memorandum of understanding with Vietnam. A surge of purchases from Bangladesh.

These countries are not typically major customers for soybeans from the U.S. farm belt. But desperate farmers, their trade organizations and President Donald Trump's administration are turning to far corners of the world in hopes of averting a disaster for agriculture from a trade war that has kept China from purchasing U.S. supplies.

The efforts so far are failing to offset the loss of the country's biggest customer for the crop, data and interviews show, with financial pain extending to tractor makers and other agricultural businesses.

For the first time in more than 20 years, Chinese importers have not yet bought soybeans from the autumn U.S. harvest, forcing farmers to store their crops on hopes that prices will eventually rise from around a five-year low. It is a risk that delays their ability to bring in money from crop sales at a time when they face rising costs for everything from labor and energy to fertilizer.

In a sign that hard times are expected to continue in rural America, Trump has promised to give proceeds from tariff revenues to farmers, who largely supported his campaigns for president.

On Thursday, U.S. Treasury Secretary Scott Bessent said the government would make an announcement on Tuesday about support for farmers.

Tit-for-tat tariffs that Washington and Beijing imposed on each other's goods this year have made U.S. soybeans too expensive for Chinese buyers, leading importers to buy from South America instead.

But alternative markets for U.S. exports are tiny by comparison and have not replaced China, long the world's biggest importer by far.

CRISIS ACUTE FOR ILLINOIS SOYBEAN FARMERS

The crisis is particularly acute in Illinois, the largest U.S. soybean producing and exporting state.

About 60 miles (97 km) west of Chicago, where the city and suburbs start to give way to green fields, farmer Ryan Frieders, 49, will be storing much of his beans in bins after previously selling some of his expected harvest at prices below the cost of production.

After months of work that included planting seeds, fertilizing fields and spraying weedkillers, Illinois growers on average are facing losses of up to $64 per acre this year, thanks in part to low crop prices and weak exports, according to University of Illinois estimates.

China purchased about 45% of all U.S. soybean exports last year - and usually secures about 40% of its annual U.S. soybean needs by early October, said Ted Seifried, chief market strategist for Zaner Ag Hedge in Chicago.

U.S. soybean exports to China dropped 39% by volume to 5.9 million metric tons from January to July, before the autumn harvest began, the latest government data show. By value, shipments sank 51% to $2.5 billion, robbing farmers of billions of dollars' worth of business.

The U.S. made a big increase in exports to Bangladesh at just over 400,000 tonnes, a fraction of China's typical demand. Despite rising shipments to Vietnam, Egypt, Thailand and Malaysia, total U.S. soybean exports were down 8% by volume from the same period a year ago to 18.9 million tonnes.

Along with industry officials, Frieders, who farms in Waterman, Illinois, traveled to Turkey and Saudi Arabia in February to meet with buyers and visit processors on a trip sponsored by the U.S. Soybean Export Council trade group.

"There's talk about India and expanding there, and Southeast Asia, and North Africa: those are markets of the future," said Frieders, adding, "there isn't this lost market that we haven't looked at that could just suddenly explode and be a new China."

SOY INDUSTRY SEEKS TO IMPROVE TRADE

U.S. Agriculture Secretary Brooke Rollins said on social media in September that Taiwan committed to $10 billion in U.S. agriculture purchases over the next four years, including soybeans. She called the commitment a "game-changer," but it was misleading: such a commitment would not represent an increase.

The U.S. exported $3.8 billion worth of U.S. agricultural products to Taiwan in 2024, according to U.S. data. If that same pace of sales continued over four years, it would total $15 billion.

The U.S. Department of Agriculture did not respond to a request for comment about Rollins' statement.

Industry groups have also tried to boost U.S. exports.

During a trade mission in June, co-sponsored by the U.S. Soybean Export Council, Vietnam's agriculture minister signed memorandums of understanding to buy more than $1.4 billion in U.S. farm products, including soybeans, the council said.

The council also met with Nigerian importers and soybean processors in June to promote trade, hoping to build off a modest 64,000 metric tons shipped there last year, according to the U.S. Mission in Nigeria. In August, the U.S. Mission in Nigeria said it also joined the American Soybean Association at a graduation ceremony involving aquaculture, an industry that can use soy as fish food.

Through July, though, the U.S. had not exported any soybeans to Nigeria this year, according to U.S. data.

Illinois hosted agricultural buyers from Peru, Colombia, Nicaragua, El Salvador, Mexico and the Dominican Republic on an annual tour of farms and crop handling facilities in August.

The U.S. did not export soy to Peru through July, while Nicaragua and El Salvador bought a negligible amount, U.S. data show. Exports were largely flat to Mexico and down to the Dominican Republic.

Farmers hope the efforts pay dividends over the longer term, though they are struggling now.

CHINA DOMINATES GLOBAL SOY IMPORTS

With more than 1.4 billion people and the world's biggest hog herd, China is hard to replace as a soybean buyer. It has imported an average of 61% of the world's traded soybean supplies over the past five years, more than the rest of the world combined, according to the American Soybean Association.

In 2024, the U.S. exported nearly 27 million metric tons of soybeans to China and 5 million metric tons to Mexico, the second biggest buyer.

"The Soybean Farmers of our Country are being hurt because China is, for 'negotiating' reasons only, not buying," Trump wrote on Truth Social on Wednesday. He said soybeans would be a major topic of discussion when he meets with Chinese President Xi Jinping in four weeks.

China's business is now going to South America, as it did during Trump's last trade war.

Last month, U.S. soybeans were about 80 cents to 90 cents a bushel cheaper than Brazilian soybeans for shipment in September or October, but China's 23% tariff on U.S. shipments added $2 a bushel to the cost for importers, traders have said.

In Argentina, the government of President Javier Milei briefly suspended export taxes on soybeans in September, luring Chinese buyers who swiftly booked cargoes, traders said.

The deals infuriated U.S. farmers shut out of China as Bessent said Washington was negotiating to support Milei, a Trump ally, financially with a $20 billion swap line for Argentina.

"The frustration is overwhelming," said Caleb Ragland, 39, a Kentucky farmer and president of the American Soybean Association.

CHINA'S ABSENCE IN THE MARKET SPILLS OVER TO OTHERS

The decline in income from crop production has spilled over into other facets of rural America.

Equipment manufacturer CNH, which sells tractors and combines, said net sales in its agriculture business dropped 20% in the six months ending on June 30, compared to the previous year.

"The good news only comes when China actually starts to order," CNH CEO Gerrit Marx said in an August interview at the Farm Progress Show in Decatur, Illinois.

Decatur, home to Archer-Daniels-Midland's North American headquarters, was formerly known as the soy capital of the world because of its processing industry, Mayor Julie Moore Wolfe said.

At the Farm Progress Show, when asked where the new soy capital was, the mayor dropped her voice to a whisper.

"It might be Brazil," she said.

(Reporting by Tom Polansek in Chicago and Waterman, Illinois; Additional reporting by P.J. Huffstutter in Chicago; Editing by Emily Schmall and Anna Driver)