China has stopped importing soybeans from the US, and this has led many people to believe that farmers will simply forego soybeans for a different crop. However, a recent survey suggests that farmers are surprisingly unaffected by this decision – so much so, in fact, that they are expected to plant more acres of soybeans than corn. This is the first time in 35 years that soybeans will overtake corn in terms of acreage.
The USDA’s Recent Report
In late March, the US Department of Agriculture released a report in Washington claiming that soybeans would cover some 89 million acres of farmland across the US in 2018 compared to only 88 million acres of corn. Though neither crop will cover as many acres as last year, these numbers prove that farmers are not concerned about China’s decision to stop importing American soybeans.
Reasons for the Continued Optimism
In another report released on the same day, the USDA said there were nearly 9 billion bushels of corn and just over 2 billion bushels of soybeans being held in inventories. They noted these numbers represent records for the dates, and thy are well above the average forecasts for either crop. Futures for soybeans have gone up 12% despite the trade troubles, and this is driving farmers across the nation to plant more of the crop. What’s more, Argentina, which is the world’s biggest exporter of soybean products intended for feeding livestock, is experiencing a drought. This has decreased its production significantly, and it is expected that the US will begin to fill the gap.
China’s Demand for Soybeans
US farmers will continue to produce soybeans despite trade tensions. In fact, some of the world’s biggest financial experts, including JPMorgan Chase, claimed that China would likely not impose tariffs on US soybeans just days before the country announced it would no longer buy them at all. Despite this announcement, China’s demand for soybeans continues to climb exponentially; its soybean imports have more than doubled in the last 10 years alone. Whether the trade will resume with China at some point in the near future remains to be seen, US farmers have no doubt that their soybeans will still be in demand here in the US and in other countries.
Will the Trend Continue?
Historically, corn planting tops soybeans each and every year, but there are a few exceptions. For example, in 1983, rural America’s wave of foreclosures resulted in the government discouraging growers from planting corn due to overabundant supplies. Whether soybeans continue to top corn in future years will depend on a number of factors, including the rise of soybean futures, whether China decides to resume trade with the US, and whether Argentina’s drought resolves.
Rarely does soybean planting overtake corn, but this year, there will be nearly a million more acres of soybeans planted on American soil. Despite trade issues with China, the global demand for soybeans is still on the rise, and American farmers are more than pleased to deliver with futures continuing to climb.