By Keith Lawrence Messenger-Inquirer
It’s been a rough year for soybeans.
They were selling for $10.27 a bushel on March 1 when the Trump Administration announced 25 percent tariffs on imported steel and 10 percent on imported aluminum.
When China imposed tariffs on soybeans in retaliation, prices began falling.
Last week, the price at midweek was $8.84 a bushel — a drop of $1.43 from March.
Daviess County produced 11.335 million bushels of soybeans in 2017.
At $10.27 a bushel, that would have been $116 million.
At $8.84 a bushel, the figures would drop to $100.2 million.
Farmers are feeling the pinch.
But Owensboro Grain, a major soybean processor, hasn’t been affected by the tariffs.
John Wright, the company’s executive vice president, said, “We don’t export. When we crush soybeans, some of the soybean meal is exported, mostly to Central America, I think. But we sell it to the companies that export it. We don’t export. We don’t export soybean oil or biodiesel. They all stay in this country.”
He said Owensboro Grain’s storage facilities are full of soybeans.
“Farmers produced a very big crop this year,” Wright said. “They had good yields. But we had to fight quality issues. The rains caused a lot of damage.”
While tariffs don’t affect the company, he said, “They’ve affected the farmer. We had a really big market in China. But that disappeared. Prices dropped dramatically. There’s been some buying from China lately, but not nearly what it was.”
Wright said, “The tariffs have had a negative effect on soybean prices and have also dramatically shrunk the U.S. export market share with China being the largest customer. That hurt the U.S. soybean industry as a whole and could have potential long-term effects.”
He said Owensboro Grain’s “primary concern is that once these markets are lost, it is very hard to get them back in the future.”
FarmProgress.com wrote recently that the U.S. Department of Agriculture “confirmed purchases of 52.5 million bushels five months after China imposed a 25 percent tariff. Before these deals, signed in the wake of the start of talks at the G20 summit, China had canceled 56 million bushels of previous sales while slashing its total commitments from the U.S. to just 19.2 million bushels.”
It added, “Rather than buying 60 percent of U.S. exports, China accounted for less than 3 percent of total sales.”
The article said, “China’s return, if it holds, could increase old crop export demand by 50 million or maybe even 100 million bushels. That’s better than nothing, but it doesn’t change potential for global soybean inventories to swell to record levels in coming months.”
Farm Progress said there’s still a question of how many bushels of soybeans China will buy in 2019.
The USDA said net farm income is forecast to drop $9.1 billion — 12.1 percent — this year to $66.3 billion.
The University of Missouri Food and Agricultural Policy Research Center said recently that production of soybeans is up 6.9 percent over 2017.
But it said, the total value of nation’s 2018 soybean crop “is actually $700 million less than last year due to the drop in price per bushel.”
Keith Lawrence, 270-691-7301, firstname.lastname@example.org