Soy Crop Held Back; No Dramatic Effects On Barge Movements
A September 28 grain storage report by the U.S. Department of Agriculture shows how soybean farmers are reacting to the Trump administration’s tariff war with China and China’s response: by sitting on their soy crop. Falling prices may also be a factor.
Early data do not yet offer a clear picture of the effects of this withholding on barge movements. According to the USDA’s weekly Grain Transportation Report, barged soy movements for the week ending September 22 stood at 170,000 tons, slightly above the 158,000 tons reported for the same week in 2017. The 2018 year-to-date totals stood at 9.09 million tons, below the 10.2 million tons report last year.
Total barge movements at Mississippi Locks 27 in Granite City, Ill., just north of St. Louis, Mo., were 190 percent, or almost double, of those at the same time last year, and 30 percent higher than the three-year average.
The soy storage report said that “old crop” soybeans stored on September 1 totaled 438 million bushels, up 45 percent from the same date last year. Stocks stored on farms totaled 101 million bushels, up 15 percent from a year ago. Off-farm stocks, totaling 337 million bushels, are up 58 percent from last September.
Since June, the price of U.S. soybeans at export terminals in New Orleans has dropped 20 percent, from $10.89 to $8.68 per bushel, according to the American Soybean Association (ASA). Farm-gate prices have fallen even further.
On September 24, the ASA warned, “The administration’s decision to impose 10 percent tariffs on an additional $200 billion in Chinese imports—and China’s subsequent retaliation on $60 billion of U.S. products—deepens and prolongs the trade war between the two countries, posing even more adverse consequences for American soybean farmers.”
According to a report prepared for the ASA by the United Soybean Board (USB) and Qualified State Soybean Boards (QSSBs), soybeans are the most valuable agricultural commodity exported from the United States, accounting for more than $28 billion in export value in 2017. Exports accounted for more than 60 percent of U.S. soybean production in 2017.
Soren Schroder, CEO of agricultural giant Bunge, told Bloomberg News, “Anybody who can store [soybeans] will do it.” As bins become full, some growers are even storing soybeans in open piles.
Ag sources have speculated that some American beans could go to third countries like Argentina to be re-exported to China in hopes of avoiding tariffs that way. Argentina, the world’s top soybean exporter, is expected to reap huge advantage from the tariff dispute between the U.S. and China if it continues; some experts have said it could increase its share of the Chinese market fourfold.
The effect of the tariff war on other crops was not quite as dramatic as on soybeans. But farm-stored durum wheat, at 51.8 million bushels, was up 55 percent from a year ago.
Stocks of stored corn totaled 2.14 billion bushels, down 7 percent from the previous year.