Farm & Food File: Two holes, $20 billion, and one big mess

The administration is digging two huge holes at the White House: one for the construction of the executive mansion’s massive new ballroom, the other to bury the export-dependent U.S. soybean sector.

That’s not my view; that’s what Caleb Ragland, the current president of the American Soybean Association, told the Associated Press on Sept. 27, when he called today’s tariff-bashed American soybean market a “five-alarm fire.”

Ragland was being polite.

Five days earlier, the administration badly undermined U.S. soy exports when Treasury Secretary Scott Bessent announced that the “U.S. Treasury stands ready to do what is needed within its mandate to support Argentina,” a key competitor of U.S. soybean farmers in the global market.

The “needed” help Bessent offered was a $20 billion backstop to reverse the perennially sinking Argentine peso.

He never explained exactly what “mandate” required the United States to intervene, a move certain to hammer American soybean exports even more than the administration’s market-hammering tariffs.

In the meantime, China — which hasn’t purchased a single American soybean since May — used Argentina’s U.S.-backed currency maneuverings to quickly buy 2.27 million metric tons, or 83.4 million bushels, of soybeans from its new bestie, Argentina.

But soybeans and American farmers weren’t Bessent’s main concerns as U.S. taxpayers stopped the sliding peso.

The chief reason was politics, reported the New York Times: “President Trump has embraced (Argentina’s ‘embattled’ Javier) Milei, whom he has described as his ‘favorite president,’ as a kindred political spirit.”

But the president’s “favorite president” isn’t very favored by his own voters. Milei “has suffered setbacks of late, including a double-digit defeat in provincial midterms, a corruption scandal … tied to his sister, and three congressional votes that overturned his vetoes.”

Another reason for the White House embrace of Argentina was to ensure American investments there retained their value, the Times explained: “Investors, which include large fund managers in the United States, cheered the announcement from Mr. Bessent, which sent the country’s bond prices soaring.”

That’s Wall Street-speak for U.S. traders cutting a fat hog in the Argentine bond market after the White House used the federal checkbook to prop up that nation’s politically-faltering president.

Again, that’s not my view; it’s what the ever helpful U.S. treasury secretary himself said when asked why the White House was acting now: “The assistance, Bessent told Fox News … would serve as a ‘bridge to the election.’”

Bessent’s metaphor, if taken to its logical conclusion, would show the Argentine president high, dry and safe above his voters and far above increasingly-underwater U.S. farmers.

In the meantime, America continues to hand more of the global soy export market to Brazil, South America’s unchallenged soybean powerhouse.

In August alone, Brazil sold China 290 million bushels, or 3.5 times more than Argentina’s recent sales. In fact, Brazil has sold China a staggering 2.47 billion bushels of soybeans this year, more than 10 times the 218 million bushels from the United States.

In 2024, the last complete marketing year with no U.S. tariffs wreaking havoc in global ag markets, the United States sold China 985 million bushels, or 4.5 times more than this year.

The White House finally acknowledged some responsibility for today’s falling commodity prices.

Its fix — using a portion of the $213 billion collected so far in tariff revenue to tide American farmers over — is improbable for any number of legal reasons, ag policy experts agree.

The best fixes are the most obvious: revoke the export-killing tariffs, but — if you’re going to spend $20 billion on political fixes — spend it where it’s actually needed, in the United States.