Some Iowa soybean farmers are holding onto their crops hoping prices will rise, but there’s a limit to how long the beans can stay in storage. Tariffs on imports to China are hurting prices, and even as more beans are harvested, they have nowhere to go because China's not buying.
In China, farmers keep a hog herd of around 400 million, according to Iowa Soybean Association communications director Aaron Putze. For comparison, that's eight times the amount Iowa has. The main source of food for the hogs in China used to be U.S. grown soybeans -- to the tune of 110 million tons of beans in 2017, according to a New York Times report – and Midwest farmers were supplying most of that. An October report by the USDA ranked Iowa as second in the nation for soybean production.
Things are different now.
Trucks come in to the growers’ storage facility near Tiffin. The trucks go out. What isn’t going out -- at least in the high quantities it used to --are soybeans.
Tiffin farmer Steve Swenka has farmed soybeans for nearly thirty years and says he’s never seen a dry spell run this long. “Just not a lot of excitement, not a lot of movement, just really kind of a stagnant kind of market.”
Swenka is just one of the numerous farmers in Iowa hurting from the trade war.
“Really ever since this whole talk with China started, been pretty much a flat line and really just tough for the soybeans to make any kind of significant gain.”
Prices have been low since trade talks began in March.
“Soybean prices are likely off two dollars a bushel,” Putze says of the latest of the fluctuating prices.
The Iowa Soybean Association is helping farmers navigate this tough market, but it’s been a waiting game that’s ticked on as China finds soybeans elsewhere.
“This is a dispute that’s deepening with each month that goes by. We are losing opportunities to sell our soybeans with each month that goes by. In China they’re looking elsewhere for the soybeans that they need.”
Swenka’s beans are now harvested, waiting in the Tiffin storage bins. As more beans are harvested, the longer they sit. Swenka must sell his harvest in a certain time-frame or pay fees for storage.
“We’ve been trying to stay current. Any time the market takes a little bit of a rally, we’ll sell a few bushels, kind of keep current,” Swenka says. He can’t wait forever, though.
“Inevitably when our grace period runs out, that’s probably just when we’ll sell the rest of them.”
It’s all he and other Iowa farmers can do to prevent their crop from going to waste. The Soybean Association is also recommending farmers stay vigilant to market shifts -– but that they don’t wait too long.
“When there is an opportunity to make a move that they do so and not wait for the situation to be resolved because no one knows when that may be.”
It’s a rough time for farmers, hearkening back to another historically difficult period for U.S. agriculture. "There are some concerns that what farmers are facing today is somewhat reminiscent of challenges that we faced in the 1980's," Putze says.
The projection is that China will have to buy some U.S. soybeans, but Putze says it will be "dramatically less" than years past.