Insight Focus
US soybean farmers are facing severe disruptions. China’s shift to Latin American suppliers and the government shutdown are intensifying financial pressures and storage challenges. Meanwhile, global shipping issues, EU regulatory delays, and emerging disease outbreaks continue to disrupt agricultural supply chains.
The US federal government officially shut down on October 1 after Congress failed to reach a funding agreement before the September 30 deadline. But how does this impact the agricultural supply chain?
Well, the majority of USDA employees are expected to be furloughed, which could delay services such as loan processing and grant applications for farmers, and the release of market reports. While mandatory programs like crop insurance continue, the anticipated reduction in staffing and services adds uncertainty for farmers already grappling with falling exports, financial losses, and storage challenges during the peak harvest season.
US Soybean Farmers Squeezed
US soybean farmers are already facing a perfect storm of trade disruptions. Since May 2025, China — historically the largest buyer of US soybeans — has not purchased a single shipment, pivoting instead to Brazil and Argentina.
Source: GACC
The shift echoes the 2018 trade war, leaving farmers still recovering from previous market shocks and facing financial pressure at the peak of the harvest season. Overall, US agricultural exports to China have fallen 53% in the first seven months of 2025 compared with the same period last year.
Source: USDA
The crisis has been exacerbated by a US bailout of Argentina, which reduced Argentine export tariffs and enabled Chinese buyers to secure millions of tonnes of soybeans just as the US harvest began. Soybeans account for 14% of all US agricultural exports, making them the top food export by value, and overall exports are down 23% year-over-year. Farmers report losses of USD 100–200/acre, and storage is filling up with unsold crops.
Source: USDA
The Trump administration has signalled plans to use tariff revenues to support farmers, but aid will require congressional approval and may not reach growers until early 2026. Meanwhile, China’s reliance on Latin American suppliers appears to be solidifying, reducing the likelihood of a quick return to large-volume US soybean purchases.
China has told reporters it would resume US soybean purchases if “unreasonable tariffs” are overturned, suggesting that US farmers will be caught in the middle as long as the Trans-Pacific trade war persists.
US Policy Fails to Disrupt Chinese Shipbuilding
A new report by the Center for Strategic and International Studies (CSIS) suggests that the Chinese shipbuilding industry has not been negatively impacted by threatened charges for Chinese-built vessels docking in US ports.
After the initial announcement caused a spike in orders at Chinese shipyards in the second half of 2024, there was a significant lull in orders, before picking up again in June 2025.
Source: CSIS
Despite volatility, China’s market share in the shipbuilding industry has changed little since 2021 at around 40% of the global total, the analysis said.
Source: CSIS
The US has been vocal about its desire to return to global prominence in the shipbuilding sector. As it stands, China’s capacity dwarves the US, which accounts for just 0.1% of the world’s shipbuilding.
Global Shipping Bottlenecks Persist
A new report by UNCTAD has found that the global shipping industry is under a significant amount of pressure. Despite an overall increase in connectivity since 2006, the industry has been challenged by rerouting, port capacity and falling freight rates, the report said.
Source: UNCTAD
The data shows that there has been a significant drop in transits through the Suez Canal since the end of 2023, reaching an average of 41 in the first half of 2025, down from 135 in the final four months of 2023.
Source: UNCTAD
This has led to a significant increase in distances, which is now far outpacing cargo volume growth.
Source: UNCTAD
Ports are also feeling the strain of rerouting and last-minute changes in schedules. According to the report, average port waiting times have continued to climb since the end of 2023.
Note: dotted line indicates 2019 average
Source: UNCTAD
As a result of disruption, there has been a major setback in environmental goals as longer distances have caused emissions to climb.
Source: UNCTAD
EU Deforestation Regs Face Further Delays
In July, we reported that Mondelez International had called for a postponement of the EU Deforestation Regulation (EUDR), citing practical challenges for cocoa supply chains.
Now, the European Commission appears set to act on these concerns. In a September 23 letter, it emerged that the Commission’s information system for transactions covered by the EUDR is not expected to adequately handle all transactions. The Commission now proposes delaying the EUDR’s entry into force to December 2026.
The EUDR applies to cattle, cocoa, coffee, oil palm, rubber, soy and wood, as well as many derived products.
This delay could have significant implications for UK feed manufacturers, particularly regarding soy imports. While the EUDR does not directly apply in Great Britain, Northern Ireland is expected to follow the law under the Windsor Framework.
As the regulation tightens requirements for traceability and deforestation-free sourcing, competition for compliant soy could intensify, pushing up costs.
US-Taiwan Relations Heat Up
The USDA has launched a major agribusiness trade mission to Taiwan, led by Under Secretary for Trade and Foreign Agricultural Affairs Luke J. Lindberg. The delegation, including 39 agribusinesses and state agriculture representatives, aims to expand market access and boost US exports.
Taiwan is already a key buyer, ranked as the seventh-largest market for US agricultural exports, with a USD 3.1 billion trade surplus in 2024. According to the USDA report, this could offer opportunities for US soy, corn, wheat, dairy, beef, fruit and tree nut producers.
Source: USDA
A sign of this new relationship came on September 17, when the Taiwan Flour Millers Association and US Wheat Associates signed a letter of intent to purchase 3.6 million tonnes (132 million bushels) of US wheat between 2026-29, valued at USD 1.3 billion. Additional letters of intent were signed with the US Soybean Export Council and US Grains & Bioproducts Council for soybean and corn purchases.
Source: USDA
This comes amid broader Washington–Taipei talks, with the Trump administration also in negotiations over semiconductor production, aiming to address US reliance on Taiwan’s dominant share of advanced chips.
At the same time, China is reportedly pressing the US on its stance toward Taiwan. According to a recent Wall Street Journal report, Xi Jinping may urge Trump to formally oppose Taiwanese independence, while the US reaffirms its one-China policy and commitment to stability in the Taiwan Strait.
In Other News…
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Argentina ends grain tax holiday early: Export taxes on grains, oilseeds, and meat were reinstated on September 24 after Argentina’s USD 7 billion sales cap was reached in just three days. The brief suspension triggered a rush of exports, with 11.4 million tonnes registered—led by soybean by-products and wheat—as Chinese buyers booked about 1.3 million tonnes of soybeans. The move underscores Argentina’s urgent need for dollar inflows, as talks with the US over a USD 20 billion swap line and emergency financing continue.
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Mexico scrambles to contain screwworm outbreak: An outbreak of the flesh-eating screwworm parasite has reached Nuevo León, less than 70 miles from the US border, after an infected cow from Veracruz tested positive. Mexico’s new rules restricting cattle movement have drawn pushback from the meat industry, which warns delays could disrupt a USD 192 billion sector. The US has labelled the outbreak a “national security priority,” investing in sterile fly production and deploying thousands of traps along the border, while ports remain closed to Mexican livestock imports.
