The nation’s soybean crop keeps growing. Fortunately for soybean farmers, so does demand, according to industry analysts and government reports released Oct. 12.
“I’ve seen so much excitement and interest from around the world about our products,” said Iowa Soybean Association president Rolland Schnell, who farms near Newton. “International and domestic demand for soybeans, meal and oil continues to grow because buyers understand we have a high quality product that can be delivered on time. That gives me faith sales will stay strong and prices will increase.”
U.S. soybean production is forecast at an all-time high 4.27 billion bushels, according to the October U.S. Department of Agriculture (USDA) "Crop Production" Report. This is 2% higher than last month and 9% higher than last year’s record harvest.
Soybean yields nationwide, due to near ideal growing conditions in much of the Midwest, are expected to average a record 51.4 bushels per acre, the report said. This is nearly 1 bushel more than last month’s estimate and 3.4 bushels above last year.
“I’m seeing everything from astonishing to good yields and good quality, as well,” Schnell said.
Luckily for soybean farmers, analysts say demand is nearly matching production.
“For soybeans, we’re on a record pace to get things sold,” said Al Kluis, owner of Kluis Commodities of Wayzata, Minnesota.
U.S. Soybean exports for 2016/17 are projected to exceed 2 billion bushels for the time, according to the USDA "World Agricultural Supply and Demand Estimates" (WASDE) Report. That’s a 40-million-bushel increase from last month.
The domestic soybean crush is forecast at a record 1.95 billion bushels, unchanged from last month, the WASDE Report indicates. Ending stocks for 2016/17 are estimated at 395 million bushels, data has shown.
Even though ending stock estimates for the current marketing year increased 30 million bushels from last month and are nearly double last year’s final tally, industry experts don’t consider them highly burdensome given strong sales.
“It’s the first year we’ve produced a 4-billion-bushel crop and the first time more than 4 billion bushels will be used,” Kluis said.
The favorable stocks-to-use ratio is one reason soybean prices haven’t hit rock bottom after three record crops in a row, industry officials say. Prices are projected at $8.30-9.80 per bushel, according to government estimates.
ISA Market Development Director Grant Kimberley said there’s plenty of reasons for soybean farmers to be optimistic. A record number of soybean buyers visited Iowa this fall and several of the largest soybean processors in China, the world’s largest importer of beans, will ink purchase agreements Friday during the World Food Prize in Des Moines.
“Demand is increasing,” Kimberley said. “The Chinese have plans to move 70 million citizens into the middle class in five to 10 years. They are going to eat more eggs, milk and meat that will require more soybeans to produce.”