Bart Pfankuch – South Dakota News Watch
As political apprehension over the U.S.-China relationship rises, South Dakota farmers find themselves forced to think more globally and find a way to support American national security interests while protecting their own need to make a living.
On the one hand, South Dakota farmers want to maintain their industry’s existing relationship with China, which represents the state’s largest international importer of South Dakota agricultural products.
In 2022, China spent roughly $1.4 billion a year to purchase soybeans, dairy products and meat raised in the Rushmore State.
“Pork is their main protein source, and they’re very large consumers of pork, so we’re very concerned about the trade relationship we have with them,” said Glenn Muller, director of the South Dakota Pork Producers Council. “China is one of our major markets we look to, along with Japan and Mexico, so we’re very concerned about maintaining those markets.”
At the same time, farmers are aware of the increasingly strong rhetoric among U.S. government officials to keep America safe from Chinese interventions, be it from spy balloons floating across the skies, by social media platforms like TikTok, through threat of cyber attacks and even potential military aggression.
Farmers who want to keep a strong trade relationship with China also support efforts by national and state politicians to talk tough and increase restrictions on the ability of the communist country to buy land, run businesses or make other inroads into American life, commerce and security.
“We realize our governments are having issues, real national security issues, and we totally understand that those need to be addressed,” said Jerry Schmitz, director of the South Dakota Soybean Association.
Soybean growers, whose product is the top commodity shipped from South Dakota to China each year with a value of $1.2 billion, are trying to toe a fine line in supporting their government while also feeding the world – and their own families at home, he said.
“We certainly need to protect our country first. However, we’re also selling a product to feed China’s people, and we see that people are different from their government,” Schmitz said.
Overall, South Dakota exports about $6.7 billion worth of goods and services to foreign countries each year, about $5 billion of which is from agricultural products.
China is the top export destination for goods produced in the state and as the third-largest importer of services originating in the state, according to the U.S.-China Business Council.
In 2022, about 28% of goods produced in South Dakota were sold to China, and 5% of global services exports headed there that year, the council reported. South Dakota saw a 14% increase in goods sold to China from 2020 to 2022, the council said.
The top exported goods to China that year were soybean oils, seeds and grains, with $1.2 billion in sales, followed by dairy products ($30 million), medical equipment ($24 million), paper products ($16 million) and meats ($13 million.)
The South Dakota agriculture industry is aware of and concerned about the growing anti-China political rhetoric that has arisen in the U.S. in recent years, including by Gov. Kristi Noem, industry leaders said.
The governor included China on her list of “evil foreign governments” that the state should not contract with and also banned state use of Chinese-owned Tiktok. Noem and U.S. Sen. Mike Rounds have also sought to limit Chinese ownership of land in the U.S.
One example of the complicated relationship with China is that while Noem and others are working to limit Chinese influence, the country is home to the meat producing conglomerate that owns Smithfield Foods. It operates a large pork processing plant in Sioux Falls that serves producers across the region and employs about 3,700 people.
The national security concerns over the U.S.-China relationship are bipartisan in nature and partly originate within concerns that the trade relationship between the two nations has not been as positive for the U.S. as it has for China, said Luke Lindberg, CEO of South Dakota Trade, an organization formed this year to bolster state trading options.
The continued concerns make it likely that some type of shift in America’s trade relationship is imminent, he said.
South Dakota Trade hosted an event in Sioux Falls on Aug. 23 called the Midwest Agricultural Export Summit, which included a session on U.S.-China trade relations.
“China is looking elsewhere to procure their commodities,” he said. “They’re actively looking for alternative suppliers, and we at the same time need to be looking at alternative buyers.”
Those target markets for expanding South Dakota trade goods are likely to include Mexico, already a strong trade partner, as well as newer markets in Africa and East Asia, Lindberg said.
Previous attempts to gain political advantage over a country by restricting trade with that nation have historically been bad news for American farmers, agricultural group leaders said.
China is a bonafide concern for the U.S., as the communist country remains the holder of huge levels of American debt and has a terrible record on human rights, said Michelle Bekkering, a director with the U.S. Global Leadership Coalition who spoke at the recent export summit in Sioux Falls.
Midwest farmers should not expect an easing of tensions with China anytime soon and must be prepared for any change and further tensions that may come, said Bekkering, an Iowa native who grew up on a soybean farm..
“There’s always going to be this friction between what we see going on in China and how we get ahead of it and be wary,” Bekkering said. “But how do you rectify that with your soy producers who say, ‘Don’t cut off our markets.” I would call that an uneasy balance.”
Bekkering said U.S. leaders should be “wary” of China.
“This is not a country with our same values,” she said. “Chinese investments and relationships are never symbiotic or a two-way street. China is always looking out for No. 1.”
Bekkering does not believe that the U.S. trade relationship will be cut off in dramatic fashion anytime soon.
“We can’t pretend that we’re going to just decouple from China because it’s just not practical at the end of the day.”
Schmitz said soybean producers in South Dakota hope that commerce centered around food can overcome any political battles.
“We have our own lives to live and they do as well in China, and we actually believe that these goods can be used as a tool of peace.”
— This article was produced by South Dakota News Watch, a non-profit journalism organization located online at sdnewswatch.org.