by Megan Durisin
When Lynn Rohrscheib’s great-grandfather began farming 101 years ago in Fairmount, Illinois, he planted corn, wheat, oats and clover.
This year, she will plant corn and soy -- lots and lots of soy.
Rohrscheib, who is chair of the Illinois Soybean Association, plans to devote the largest-ever amount of her family’s farmland to the crop. She’s one of many U.S. farmers who’ve set aside additional acres for the bean because of the lower costs for seed and fertilizer plus the higher potential profit. Soybeans are forecast this year to surpass corn as the most-planted crop in America for just the second time in history, according to the US. Department of Agriculture.
Not even the threat of Chinese tariffs can entirely dampen farmer -- or investor -- enthusiasm for the crop. After dipping last week on initial word that the largest soy purchaser was proposing 25 percent tariffs on U.S. beans, prices have climbed back as an Argentine drought threatens production in the world’s third-largest exporter.
Fields were still bare last week at Austin Rincker’s 2,500-acre (1,012-hectare) farm in Moweaqua, Illinois, with the odd snow flurry signaling the lingering cold weather that has delayed some planting. Illinois is the largest soybean-producing U.S. state and about 60% of its crop is exported.
Soybeans have “carried the farm” the past three seasons, said Rincker, and he’s positive on the crop’s future: “Demand for protein’s really good right now." He monitors local prices on an app on his phone. "We’ve seen the markets respond, but there’s some stability there yet."
Soybeans have soared to prominence in the agricultural sector. In the past two decades, global exports have more than tripled while corn doubled and wheat rose about 75%. Though the pods often conjure images of vegetarian fare like tofu, they play a much more prominent role in carnivore’s diets. The protein-rich oilseed is a key component in the diets of chicken and hogs, which have experienced rising demand as the world’s growing middle class fuels higher meat consumption.
Meanwhile, the trade-war rhetoric has been toned down following the initial announcement of the Chinese tariffs last week. The U.S. has inked multiple export deals since then, while China’s President Xi Jinping has vowed to open sectors of the economy. Trump said earlier this week that the White House will “probably” reach a compromise with Beijing, and on Friday he told lawmakers he’s considering rejoining the Trans-Pacific Partnership, the free-trade deal he withdrew from shortly after taking office.
July soybean futures are poised for a 1.8% gain this week on the Chicago Board of Trade, and aggregate open interest has swelled to a record.
China buys about a quarter of U.S. soybean production each season. Rincker visited China for the first time three years ago as part of a trip organized by the state soybean association.
“We’re going to have to advocate as much as we can to the president and those that represent us in Washington," Rohrscheib said. "But we’re also going to have to be able to roll with whatever punches come down the line.”
For now, both farmers are anxious to get crops in the ground. Bins of corn and soybean wait in warehouses as cold, wet weather keeps Midwest planting on hold.
U.S. net farm income is forecast to reach a 12-year low this season. When he announced additional possible tariffs last week, Trump directed the Agriculture Department for specific actions to help farmers. Agriculture Secretary Sonny Perdue, in a speech Monday, declined to give details on what could be done to help soy farmers. But Deputy Secretary Steve Censky said one option could be to use the department’s authority under the Commodity Credit Corporation, a federal entity that funds farm subsidies, to buy surplus U.S. crops.
Like many other farmers, Rincker made his planting decisions for the season months in advance -- purchasing much of the seed before last year’s harvest was complete. He has hedged about 35 percent of his soybean crop, more than usual for this time.
“We’re thrown so much bad news at that grain market and still it keeps bouncing back," said Rincker. "There’s a little bit of resiliency there.”
To contact the reporter on this story: Megan Durisin in Chicago at [email protected]
To contact the editors responsible for this story: Simon Casey at [email protected]
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