By MICHELE F. MIHALJEVICH
FORT WAYNE, Ind. — The tariff conflict between the United States and China impacted the ability of U.S. farmers to export large quantities of soybeans last fall, a Purdue University agricultural economist said last week.
In the last couple marketing years, October was the peak month for sales of U.S. beans to China, Chris Hurt noted. In 2016/17, the United States sold 300 million bushels to China; the figure was 250 million in 2017/18. In October 2018, China purchased 10 million bushels of U.S. beans.
In another 60 days or so, the South American soybean crop will be available and China won’t need to look to the United States for beans, he said. “We missed the peak season of shipments to China in October, November and December,” Hurt explained.
“It will be hard to get rid of the 2018 crop, as we’ll have a lot of competition in February and March. Since 2012, soybean demand has primarily been from China buying more and more soybeans. Farmers reduced their corn acreage and planted more soybeans.”
In December, the USDA estimated soybean ending stocks for the 2018/19 crop at 955 million bushels, up from 438 million the previous year. Ending stocks for the 2016/17 marketing year were 302 million bushels.
After the U.S. and China imposed tariffs last year on goods each sold to the other, the Trump administration said the rest of the world would pick up the slack in U.S. soybean exports, Hurt said.
From Sept. 1 to Dec. 6 – the most recent information available – China had purchased 772 million fewer bushels from the U.S. than in the 2017/18 marketing year. The rest of the world, including Europe and Mexico, bought 305 million additional bushels, leaving a deficit of 467 million.
“There’s a possibility (of other countries purchasing more soybeans), but that’s not how it’s worked so far. The rest of the world has not yet picked up sales. Our hope in agriculture is this will work out as the administration suggested it would,” he said.
Hurt shared his thoughts on Indiana and U.S. agriculture Jan. 16 during the Fort Wayne Farm Show.
Despite lower prices for corn and soybeans over the last several months, Hoosier producers could see an increase in net farm income for the 2018/19 marketing year, thanks in part to higher yields and trade assistance from the government, he said.
“Indiana farm income in 2017 was $1.6 billion, and I could see us getting into the low $2 billion range for 2018/19,” Hurt said. “While this is showing some signs of improvement, it’s nothing like the incomes from 2008-14, which had an average of $3.2 billion.”
Hurt said he expects prices farmers get for corn, soybeans and wheat to improve slightly over the next few years, though they won’t reach levels seen in 2012. The marketing year average farm price for corn could be $3.90 per bushel in 2019, $4.05 in 2020 and $4.10 in 2021. The 2012 average was $6.89.
For soybeans, he estimates $9.10 in 2019, $9.40 in 2020 and $9.50 in 2021. Soybeans averaged $14.40 in 2012. Wheat could reach $5 in 2019, $5.15 in 2020 and $5.40 in 2021. The 2012 average was $7.77.
“My frustration level ran pretty high for you, the American farmer, from June until December,” Hurt noted. “I think we’ll still see pretty tight conditions for 2019, but better than it has been.”
The United States will see the influence of an El Nino weather pattern this year, but Ryan Martin, chief meteorologist with Hoosier Ag Today, doesn’t expect it to have a negative impact.
“An El Nino in a U.S. growing season usually gives us some pretty good weather,” he said. “It doesn’t look like much in terms of planting trouble. Corn Belt-wide, we shouldn’t see headlines with planting delays.”
Martin also spoke Jan. 16 at the farm show. He sees colder temperatures through the rest of January in the region, with February temperatures moderating a little. He anticipates March temperatures will be much closer to normal.
“We could see a nice little warming push in April, warmer than normal,” he explained. “May could be pretty close to normal. The rest of January will be pretty snowy, and I think we see that continuing into February with fairly good regularity.
“We could be looking at widespread rain events in April, but some drying down just a little bit in May.”