Farmers and ISA work to sell record soybean crop


     The nation’s farmers have another record soybean crop to sell, according to U.S. Department of Agriculture (USDA) reports released Jan. 12.

   Iowa Soybean Association (ISA) leaders are up to the challenge.

   “We know there’s plenty of work to do,” said Kirk Leeds, ISA CEO. “I’m confident the initiatives and projects funded by the soybean checkoff to build demand aboard and domestically are working.”

   The 2017 U.S. soybean crop is pegged at nearly 4.4 billion bushels, down 33 million from the previous forecast, according to the USDA Annual Crop Production Report. Soybean farmers nationwide averaged 49.1 bushels per acre, a .4-bushel decrease from November estimates.

   Iowa’s soybean harvest tallied 561.6 million bushels, up more than 4 million bushels from November, the crop production report said. The state’s average yield increased a half-bushel to 56.5 bushels per acre.

   The USDA increased 2017/18 soybean ending stocks to 470 million bushels due to lagging exports. International sales of U.S. soybeans are pegged at 2.16 billion bushels, down 65 million, based on purchase commitments through December and increased competition, according to the USDA World Agriculture Supply and Demand (WASDE) Report.

   The government projects the 2017/18 U.S. season-average farm price at $8.80 to $9.80 per bushel.

   For farmers to get paid at the top end of the range, Leeds said boosting exports is key since domestic demand is booming. The government predicts domestic crush in 2017/18 will increase by 10 million bushels to 1.95 billion.

   Analysts blame the erosion of U.S. soybean exports and a corresponding increase in Brazilian sales on increased production and protein content, a key ingredient to help build muscle in animals. The 2017 U.S. soybean crop averaged 34.1 percent protein per bushel – primarily weather-driven – according to government data. Brazil’s soybeans average about 37 percent protein content.

   The U.S. Soybean Export Council and state soybean associations, including Iowa, continually work to build demand abroad, Leeds said. ISA leaders will travel to China and Indonesia – the No. 1 and No. 5 export destinations of U.S. soybeans, respectively – on trade missions in March.

   “Protein content is a challenge this year,” Leeds said. “When we talk to customers, we highlight all the attributes and advantages of U.S. soybeans such as product consistency, reliable delivery, competitive pricing and excellent essential amino acid content for proper animal growth.”

   Tim Bardole of Rippey, ISA board member and demand committee chair, participated in a trade mission to the Philippines and Malaysia in December.

   “Customers I talked to understand the U.S. soybean advantage, and some only buy from us,” Bardole said. “The ISA will continue to do everything it can to build demand.”

   Without a significant export hike or a production problem to shrink supplies, commodities analyst Sue Martin doesn’t expect soybean prices to improve much in the near-term. Martin is president and CEO of Ag & Investment Services, Inc. of Webster City. She will be a featured speaker at the upcoming ISA Research Conference, Feb. 6-7, in Des Moines.

   Martin said a 4-billion-bushel Brazilian soybean crop on the horizon and record U.S. soybean acres projected this year will continue to be a drag on prices. Based on current market dynamics and historical data, she said the price floor may have already been set.

   “I wouldn’t be quick to make sales now,” Martin said. “But when futures contracts near the $10 level, I would probably start pulling the trigger on sales.”

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