Hart: New soybean markets needed


Crop markets specialist Chad Hart speaks during the Ag Outlook Luncheon Dec. 19 at the Youth Development Center in Monticello. (Photo by Pete Temple)
By: 
Pete Temple
Express Sports/Ag Editor

     When Chad Hart speaks, farmers listen.

     Hart, crop markets specialist for Iowa State University Extension and associate professor of economics at ISU, returned to the Citizens State Bank Youth Development Center for what has become an annual visit.

     He presented his ag outlook information without the benefit of a microphone, as the 80-plus farmers in attendance paid close attention.

     He spoke about a variety of agricultural issues during a 90-minute seminar, showing slides, offering opinions and taking questions.

     Hart wasted little time getting to the most talked-about issue at the luncheon, the effect of recent tariffs on soybean exports.

     The tariffs have resulted, according to statistics presented by Hart, in a 97.6 percent drop of soybean sales to China. Formerly the largest trade partner for U.S. ag products, China has now dropped to 12th in soybean exports.

     Whereas 60 percent of U.S. soybean exports went to China in 2016, that number has dropped to 3 percent today, Hart said.

     “The question is, how do we fill in the hole that we got in with the trade war with China?” Hart asked.

     He revealed a three-part strategy to do just that: finding new markets for U.S. grown beans, selling more and different kinds of bean products, and cutting back on soybean acreage.

     To some extent, Hart said, the first part is happening. The European market is now number one in receiving U.S. soybean exports. That market previously rejected U.S. soybeans because of GMO regulations, Hart said, but wants them now because the price has become so low.

     As a result, U.S. exports to Europe have more than doubled.

     Mexico has moved to number two in soybean exports from the U.S., and Argentina – what Hart called “a brand-new customer,” is third.

     “We’ve been working our way back up,” Hart said, noting, however that, of the $2 per bushel U.S. farmers have lost since the tariffs began, only about $1 has been recovered.

     As for planting fewer soybean acres, Hart said corn will likely become a much bigger factor in 2019.

     “It’s the best house in a bad neighborhood,” Hart said.

     It also means, Hart predicted, that next year Brazil will overtake the U.S. as the world’s largest producer of soybeans.

     The bright side, Hart said, is the expected rise in demand of livestock exports. He attributes this to the per capita income growth in some of the world’s largest countries, which will mean more demand for meat and meat products.

     “Income growth will drive increased global demand,” Hart said.

     Hart said the U.S. will produce 3 billion pounds more meat in 2019 than it did in 2018, in order to meet the demand. That, too, should help with corn demand, in order to feed the livestock.

     It’s all part, he said, of trying to expand different markets to make up for shortfalls on the soybean end.

     “We’re hoping we can grow other markets enough to make up for what we lost (with soybeans),” Hart said.

     The event was sponsored by Ohnward Bank & Trust, which provided a meal prior to the seminar.

 

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