Soybeans Pile Up, So Do Worries of Bean Rot

There was a record soybean crop this year just as China stopped buying. The beans are piling up. So are fears of rot.

The New York Times reports Farmers Hope Trade War Ends Before Beans Rot.

Kevin Karel, the general manager of the Arthur Companies, which has long sold soybeans to China. With that market now largely shut off, Mr. Karel said his firm has started to stockpile soybeans.

The latest federal data, through mid-October, shows American soybean sales to China have declined by 94 percent from last year’s harvest.

Mr. Karel, the general manager of the Arthur Companies, which operates six grain elevators in eastern North Dakota, has started to pile one million bushels of soybeans on a clear patch of ground behind some of his grain silos. The big mound of yellowish-white beans, already one of the taller hills in this flat part of the world, will then be covered with tarps.

“I’ve been to China 25 times in the last decade talking about the dependability of U.S. soybeans,” said Kirk Leeds, the chief executive of the Iowa Soybean Association. By undermining that reputation, he said, “We have done long-term damage to the industry.”

Public health officials in North Dakota, already confronting a recent rise in suicides, are concerned about the impact of falling prices, particularly on younger farmers with high levels of debt.

Brandon Hokama, whose family farms 3,500 acres near Ellendale, N.D., estimates that they need a price of $8.75 per bushel of soybeans to break even. Last year at this time, soybeans could be sold for almost $10 per bushel. Now, local elevators are offering prices below $7.

Storing a Record Soybean Crop

You cannot just pile them up indefinitely. Soybeans are a bit more susceptible to spoilage and need to be two percentage points drier.

This year was a Record Harvest so storing the beans before they rot is a record problem.

The Oct. 11 USDA Crop Production report forecasts Iowa farmers to harvest a record 606 million bushels of soybeans and an average yield of 61 bushels per acre.

Many grain elevators and a few farms were already carrying over more old-crop soybeans than normal. USDA reported that U.S. soybean stocks on Sept. 1 stood at 438 million bushels, up 45% from a year ago. Come Sept. 1, 2019, U.S. soybean stocks are forecast to increase to 885 million bushels, which if realized, would be a new record.

In a normal year, natural, unheated air will dry soybeans to 13% moisture. But in cool, wet, fall conditions, supplemental heat may be required.

Soybeans with less than 15% moisture can be dried with bin fans. Soybean seed stored over one planting season should be 12% moisture or less, while carryover seed should be stored at 10% moisture or less.

Compared to corn, soybeans are fragile and can be damaged by air that is too hot or too dry, and can be damaged from rough handling.

Not to fear, we call this "winning".

Mike "Mish" Shedlock

Comments (33)
No. 1-12
JL1
JL1

The company whose soybean pile that is has reported that the soybean pile was the same size last year so this is FAKE NEWS from NYT.

Also USA exported more soybeans than in the same period last year so this is FAKE NEWS upon FAKE NEWS.

JL1
JL1

Record harvests usually lead to more soybeans to store...

hmk
hmk

I would think that the customers that were getting soybeans from the countries that are selling to China would buy them from the US instead. Why is this not happening? Is there an excess of soybeans disrupting the supply/demand balance. I would like to think this is the price we have to pay in order to get fairer trade terms from China. They are screwing us royally and using the profits to then try to become the worlds dominant military power. Thats winning for China. I don't care what the textbooks say about free trade. They don't take into consideration enriching a malevolent country that would like to subdue and dominate the world. They are communists and have already murdered at least 50 million of their own citizens. A trade war will cause price inflation if it persists, but that would be great for the idiots at the FED who keep touting how beneficial inflation is. Your alternative is to let capitalism reign here and sell out or future to these ruthless bastards.

Kinuachdrach
Kinuachdrach

I have to agree with JL1 -- reports in the New York Times have to be taken with a grain of salt, particularly if there might be a political slant to the story. Everything the Lefties touch turns to dust, including the NYT's once sterling reputation for accuracy.

What is the other side of this story? Are Chinese people going hungry because of the lack of soy beans? Or are food prices rising in China? In the old days, the NYT would have covered the whole story.

As an aside, a friend in China reports that the Chinese government is offering its citizens a special "This Month Only" deal -- they can pre-pay 5 years of annual Social Security obligations, locking in the price before rumored future price increases.

This suggests that the Chinese government needs the money. Perhaps the Chinese government will become more willing to come to the negotiating table about their unsustainable trade imbalance? It also suggests that the Chinese government has done a great job of learning Western marketing techniques!

lol
lol

Treasury borrowin 90 billion THIS WEEK ALONE LOL! 95 billion next week......me thinks they need those tariffs (and then some) more than ever before!!!!

Sechel
Sechel

and yet Trump supporters claim he's an economic genius. Despite the fact its been proven the tax law didn't spur investment and that deregulation hasn't made banks lend more money. All one can point to is that Trump has taken away some penalties for polluting

tz1
tz1

Just think how much worse it would be for Farmers if we got rid of the Ethanol mandates and subsidies!

Casual_Observer
Casual_Observer

The party is over and you cannot hope to survive the hangover. 2018 is going to mark the year Americans remember as the last great Christmas of their generation.

wootendw
wootendw

“I’ve been to China 25 times in the last decade talking about the dependability of U.S. soybeans” - Kirk Leeds, Iowa Soybean Assoc.

King Cotton never regained its crown over the American south after the Civil War as Egypt, India and other places moved in to fill the supply gap.

TexasTim65
TexasTim65

The problem is the record harvest, not the China ban.

Obviously China has just bought from some other country. But that means whomever was buying from that country is now buying from the US. The global supply and demand hasn't changed and for the most part (baring record good/bad harvests) supply = demand. The reason for that should be obvious. It takes years of planning and equipment to harvest a crop (ie in your back yard you can switch from soybeans to corn on a yearly whim but farmers planting thousands of acres can't because they need special equipment/fertilizers/soil type/transportation/storage etc) commercially. A real change will take years of the trade war.

Realist
Realist

The Chinese are attempting to reduce their overall soybean imports. They are trying to get by without any US soybeans at all by getting farmers to substitute other feedstocks for pigs. US farmers will have to find other markets for their soybeans.

frozeninthenorth
frozeninthenorth

Don' t really understand the aggression in the comment section; it seems relatively clear-cut argument. China has stopped buying soyabean, and price for farmers has dropped to $7. There is no doubt that the bumper crop didn't help....still don't really see the fake news here. Trade policy affected Soyabean farmer end of story!