Soybean farmers seek a resolution to the trade war between the U.S. and China, warning long-term impacts of the conflict are harming farmers. Six months ago, China placed tariffs on U.S. soybeans as part of the tit-for-tat trade war.

While China has begun some purchases of U.S. soybeans, and trade talks are ongoing, the American Soybean Association points out that U.S. soybean growers have faced a nearly 20 percent drop in soy prices since the threat of tariffs began last summer. ASA president Davie Stephens of Kentucky says: “We cannot withstand another six months,” noting farmers “need stability returned to the market.”

The value of U.S. soybean exports to China has grown 26-fold in ten years, from $414 million in 1996 to $14 billion in 2017. China imported 31 percent of U.S. production in 2017, equal to 60 percent of total U.S. exports and nearly one in every three rows of harvested beans.

(CME) There was a modest drop in agricultural producer sentiment in December as farmers’ perception of both current and future economic conditions weakened, according to results from the Purdue University/CME Group Ag Economy Barometer. The December barometer reading of 127 was 7 points lower than November.

Both of the barometer’s two sub-indices declined in December: the Index of Current Conditions fell 6 points to 109, and the Index of Future Expectations fell 8 points to 135. When comparing these readings to December 2017, the Index of Current Conditions is substantially lower, registering a decline of 30 points, while the Index of Future Expectations actually improved from year-to-year with an uptick of 15 points.

International agricultural trade issues continue to cause concern and could be causing producers’ reduced confidence in current economic conditions. When producers were asked whether they expect exports to increase or decrease in the next five years, 59 percent indicated that they expect ag exports to increase, down 7 points from November’s survey response, whereas 26 percent expect ag exports to decrease, up from 10 percent on the November survey.

Also in December 2018, the Large Farm Investment Index, which measures whether producers feel this is a good time to make large farm investments, fell 5 points to a reading of 51. This marked a 29 point drop from one year ago when it reached a reading of 70.

Those same concerns were also apparent when producers were asked whether now is a “good time” or “not a good time” to bring a new generation of family into the business. Just 42 percent said now was a “good time” compared to approximately half during the previous two years. However, when looking ahead 5 years, 65 percent of producers expect conditions to be more favorable to onboarding a new generation.

China’s Foreign Ministry says the nation has “good faith” to resolve trade issues with the United States. Talks began this week in Beijing as the two nations look to end a trade war.

On Monday, U.S. Commerce Secretary Wilbur Ross said talks were being held with appropriate-level staff and would help determine how the administration moves forward. Ross also said he saw “a very good chance that we will get a reasonable settlement that China can live with,” according to Reuters.

The U.S. delegation in Beijing, led by Deputy U.S. Trade Representative Jeffrey Gerrish, includes officials from the Department of Agriculture, Commerce, Energy and Treasury, and senior White House officials. An end to the trade war, desired by U.S. agriculture, could further reopen China to U.S. commodities, including soybeans. China’s tariffs on soybeans stalled purchases until a recent agreement that restarted some buys of U.S. soybeans by China.

The government shutdown could delay the year-round sales of E 15 ethanol fuel blends previously promised by the Trump administration. Bloomberg News reports the government shutdown could last a “long time,” and the schedule for getting approval of the higher ethanol blend was already ambitious before the shutdown.

The Environmental Protection Agency had planned to present a final rule in May, just four weeks before existing restrictions on 15 percent ethanol begin for 2019. However, with the EPA largely halted due to the shutdown, that timeline is in jeopardy. Renewable Fuels Association president Geoff Cooper said the shutdown “is making a tight timeline even tighter.”

Ethanol producers, meanwhile, are tasked with facing historically low ethanol prices. Allowing year-round E-15 sales is thought to provide a small boost in demand.

Senator Pat Roberts of Kansas Friday announced he will not seek re-election to the U.S. Senate in 2020 and will retire at the end of this term and the 116th Congress. The current Senate Agriculture Committee Chairman has served eight terms in the U.S. House of Representatives and four terms in the U.S. Senate.

Roberts has chaired six committees and is the only two-time chairman of both the House and Senate Agriculture Committees in congressional history. Making his announcement Friday in Manhattan, Kansas, the Senator said he’s “always proudly been a champion for agriculture.” Just last month Roberts helped pass a new farm bill, his eighth farm bill during his tenure on Capitol Hill.

In a statement following the announcement, Senate Ag Committee Ranking Democrat Debbie Stabenow called Roberts a “true friend” who “always puts the needs of our farmers and ranchers first.”

Trade talks between the U.S. and China this week should provide an early indication as to what political tensions between the two nations may disrupt the talks. Deputy U.S. Trade Representative Jeff Gerrish will meet with Chinese officials in Beijing to begin discussing measures the U.S. seeks to allow the current trade war end between the two.

If the talks are favorable to the U.S., Politico reports that could lead to higher level talks with higher ranking officials. The U.S. has set a March deadline for China to agree to trade policy reforms. Meanwhile, China is opening access to its economy back to the United States through purchases of U.S. agricultural products.

The state of the Chinese economy is seen as dire by some analysts, which could be a motivation to seek an end to the trade war. However, it remains unclear what specific demands the Trump administration will make and if China deems them reasonable or not.

China is making more purchases of U.S. soybeans this week ahead planned trade talks in Beijing between the U.S. and China next week. China’s biggest food company was asking for prices Wednesday.

The alleged purchases come after the most recent buy just before Christmas when China purchased roughly 1.2 million metric tons of U.S. soybeans, according to data provided by the U.S. Department of Agriculture. However, data on the latest expected sales may not be published, as much of USDA is closed as part of the government shutdown.

Sales of other commodities are expected to China, as well. Arlan Suderman of INTL FCStone told Bloomberg News China could seek U.S. corn this month, but the market has not seen confirmation. Suderman notes “Supplies are ample, but the balance sheet would quickly tighten if China re-enters the market with significant purchases.”

The government shutdown, ending soon or not, is likely to delay the January World Agriculture Supply and Demand report. Scheduled for next Friday, January 12th, the World Agricultural Outlook Board needs a full week to release the report, once the government opens.

Farm Journal’s AgWeb reports that while most of the information was gathered before the shutdown, analysis of the data remains. Even if lawmakers were to end the shutdown quickly, the delays are still likely at this point. However, reaching a budget agreement appears to be a tough battle with Democrats taking leadership of the House of Representatives and Republicans rejecting a spending plan by House Democrats before the new Congress began Thursday.

Traders worry a prolonged shutdown could end with an excess of data flooding the market, including Department of Agriculture WASDE numbers, export sales data, and updates from the Commodity Futures Trading Commission.