The U.S. Department of Agriculture predicted Thursday (July 12) a record surplus of soybeans during the next year after revising downward the amount of exported soybeans. U.S. farmers will export 250 million fewer soybean bushels than predicted earlier this year.
As a result, the U.S. will only export 2.04 billion bushels, and could have a record surplus stockpile of 580 million bushels, the report states. It’s a 195 million bushel uptick from the USDA forecast in June.
Soybean prices remained in the doldrums on Thursday. The July per bushel price ended the day at $8.30, a 23-cent drop since Monday. August per bushel prices rose slightly $8.33. An ongoing trade war between the U.S. and China, resulting from President Donald Trump’s decision to raise tariffs on certain Chinese imports, escalated earlier this week when the White House announced another $200 billion in trade tariffs. The USDA report identified the ongoing trade disputes as the root cause of the soybean export decline.
U.S. farmers are expected to harvest 4.31 billion bushels, up 30 million bushels from 2017, according to USDA’s National Acreage Statistics Service or NASS. Yields are expected to be 48.5 bushels per acre.
China imports about 100 million metric tons of soybeans each year, and the U.S. contributes about 35% of that total, according to USDA. Chinese buyers have not been buying American soybeans at the same rate this year, and producers are leery to ship them for fear the shipment may not be accepted when it reaches China, University of Arkansas agriculture economist Bob Stark told Talk Business & Politics earlier this week.
Prior to the Thursday report, China was predicted to import 103 million metric tons this year or about 65% of all imported soybeans on the international market. The revised forecast predicts its imports will drop 8%, or about 294 million bushels.
Soybeans are Arkansas’s top crop, and its the second most exported crop from the U.S., according to the NASS. Arkansas soybean farmers harvested 3.5 million acres in 2017, and the crop has a value of $1.74 billion, according to NASS. Farmers had yields of 51 bushels per acre, NASS reported.
At Monday’s bushel price of $8.53, an Arkansas farmer would have to have a yield of at least 37 bushels per acre to break even with his input costs, and that doesn’t include costs associated with buying or leasing the farm land, Stark said. Producers have had yields far above that in recent years, meaning there is a cushion, but it’s getting thinner, Stark added. It costs the average soybean farmer an average about $415.11 per acre in input and operating costs to plant and harvest a field.