EVANSVILLE, Ind., July 16 (UPI) — The historic spring flooding that prevented Midwest farmers from planting millions of acres of corn and soy will help to unclog the nation’s soybean market this fall, bringing some much needed relief to the depressed market.
Farmers this year are storing the largest stockpile of soybeans ever recorded after China placed a high retaliatory tariff on American soy last spring, all but ending trade between the two countries.
China was the United States’ largest single soy importer, buying about a third of America’s beans. So when that market closed, millions of bushels were left with nowhere to go. They landed in farm grain bins to await a buyer.
“If you have a whole bunch of soybeans with no market for them it pushes prices down,” said Jason Grant, a professor of agricultural and applied economics at Virginia Tech.
With the trade war dragging on, economists predicted America’s soy stockpile to grow even larger come fall harvest time, sending prices even lower, Grant said.
But mother nature may have changed the equation — at least a little.
The U.S. Department of Agriculture in June estimated that 6 million acres of corn and soy fields were too wet to plant this year — though many in the farming sector believe the number of unplanted acres is much higher.
But even with that modest estimate, the USDA this week predicted fall yields will fall by more than 300 million bushels.
“That’s a big deal,” said Todd Davis, an extension economist at the University of Kentucky. “It’s definitely a step in the right direction.”
Davis was quick to add that even with the depressed yields, the U.S. soy stockpile will still continue to grow if trade with China remains barred.
“We’re going from a 26.6 percent increase to 19.3 percent,” Davis said. “So, we’ve basically gone from a super big number to a big number.”
Still, the reduced supply is already pushing the soy price up by about $0.15 per bushel to $8.40, according to the USDA.