Tariffs on Soybeans Will Switch More Acres to Corn
October 30, 2018 American farmers hit by the U.S.-China trade battle are preparing to reshape the U.S. Farm Belt by planting more corn and less soybeans next year over a land mass potentially equal to the size of Connecticut, according to an article on USAgNet.com.
For decades, corn was U.S. farmers’ crop of choice, its tall stalks carpeting the Midwestern landscape. Soybeans, shorter and bushier, began decades ago as a niche crop raised on less acreage but came to rival corn in recent years because of growing demand from China, reports Dow Jones.
U.S. farmers in 2018 planted more soybeans than corn for the first time in more than three decades, betting on that demand. But Chinese tariffs on U.S. soybeans have wreaked havoc: U.S. exporters have sold less soybeans to China, typically the largest foreign buyer of the crop, in the past seven weeks than in a single week last fall. Soybeans inspected for export from ports in the Pacific Northwest — a main U.S. originator of soybeans bound for China — recently stood 82% below their year-ago level. Prices for the oilseeds have dropped 11% this year.
“Prices will tell you that you would see a significant shift out of soybeans toward corn in the U.S.,” said Soren Schroder, chief executive of grain-trading giant Bunge Ltd., speaking at a Wall Street Journal conference in September. Some analysts say farmers could convert as much as four million acres from soybeans to corn next spring.
Many farmers and agricultural officials said final crop choices might not be made until just weeks or days before planting gets under way, partly because of uncertainty over tariffs. President Trump and his Chinese counterpart Xi Jinping are scheduled to meet at the Group of 20 leaders’ summit in Buenos Aires in November.
The situation could pose challenges for farm retailers and grain traders charged with transporting crop supplies and handling a fresh flood of grain. But swinging more fields back toward corn could boost crop-seed sellers and fertilizer suppliers, analysts said.
Corn has tended to be a more profitable product for seed companies like Bayer AG, DowDuPont, and Syngenta AG and would provide a boost to them, at least in the short term. With its longer growing season, corn is more susceptible to weeds and destructive bugs, meaning farmers often spring for pricey seeds with genes inserted to repel pests. Because corn produces more grain per acre than other crops, seed companies can also charge more for a bag.
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