By Tadeo Ruiz Sandoval
American soybean producers are readying for the harvest season. But so far, China, the biggest buyer of U.S. soybeans, hasn’t placed a single order for the upcoming market year. The absence has sent farmers scrambling to determine what to do with their crops.
It’s a problem that’s been simmering since 2018, the last time China was embroiled in a trade war with the U.S. Mike Langseth, a farmer in North Dakota, remembers that year all too well.
“It was hard to pencil in a profit,” he said. “It was hard to see how we were going to be able to continue operating because you look at the numbers, and it was a loss, and it was going to be one until China came back to buying at least some soybeans.”
At that time, China slowly began to turn to Brazil for its soybean fix.
But now, China has detached itself entirely from the U.S. market, said Chad Hart, an agriculture economist at Iowa State University. He said this comes at a terrible time.
“To have them on the sidelines right now is a major problem, especially because prices were already fairly low and the cost of raising soybeans are fairly high right now,” Hart said. “So profit margins were already probably in negative territory. And so this just adds to the financial issues that farmers are facing as they get ready to go into harvest.”
China buys over half of all exported American soybeans. No other country could come close to filling the gap.
“Given that China is no longer in the marketplace, it's likely that we will see producers shift to other crops to look for better economic opportunities in those other crops than soybeans is providing right now,” Hart said. “So we're going to see a whole lot of different small movements to try to adjust for the loss of one big market.”
In the meantime, for those still working with commodity crops, options are limited.
The storage option
Caylor Rosenau is a farmer from Carrington, North Dakota, and a member of the North Dakota Soybean Growers Association, where farmers have recently been discussing what to do with their beans.
One option is to store them and wait for a buyer, which carries its own set of issues.
“I've talked to many neighbors now,” Rosenau said. “And they've said, ‘you know, if our bins get filled up with [soy]beans and corn, we can't store both of them.’”
Farmers only have so much space to store their grains, and with corn harvests happening after soybeans, producers may have to choose which crop to keep.
“If all of our farmers in the area store their soybeans, what that's really going to affect is corn, the next crop that we won't have any storage for,” Rosenau said.
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