Soybean stock slides as USDA predicts more planting
MITCHELL, S.D.-In about one week, the price of soybeans has fallen by more than 20 cents per bushel, and one South Dakota farmer blames the drop on a recent government report."Those reports swing a pretty big bat, I guess you'd say," Stickney far...
MITCHELL, S.D.-In about one week, the price of soybeans has fallen by more than 20 cents per bushel, and one South Dakota farmer blames the drop on a recent government report.
"Those reports swing a pretty big bat, I guess you'd say," Stickney farmer Paul Matzner said about United States Department of Agriculture (USDA) reports.
On March 31, USDA released its annual prospective plantings report, which estimates the amount of corn, soybeans and other crops that will be planted during the year as indicated by reports from farmers.
According to the report, soybean acreage nationwide is expected to rise 7 percent from last year, while corn acreage is estimated to fall by 4 percent.
If realized, there would be 90 million acres of corn and 89.5 million acres of soybeans. The difference in the two crops' acreage would be the smallest in at least 20 years, and soybean acres planted would be at an all-time high.
South Dakota farmers are expected to plant 5.4 million acres of both corn and soybeans in 2017, according to USDA. That marks a drop in corn acreage from 5.6 million acres in 2016 and a rise in soybeans from 5.2 million acres.
On March 31, grain elevators were paying between $8.58 to $8.60 per bushel for soybeans in south-central South Dakota.
The next day, soybean prices fell to between $8.36 and $8.43 per bushel in the same region and fell to between $8.32 and $8.39 as of Tuesday.
But Matzner, who has farmed near Stickney for more than 30 years, said the USDA report may not be accurate, and the weather will play a large role in determining what crops get planted.
"They do the survey probably a month before the report is released, so things can change in that month, for one thing, and then from when the report is released until the actual seed goes in the ground, that can change, too," Matzner said.
Matzner said the report "hammers the market down," but if the weather allows early planting, farmers in Minnesota, North Dakota, Iowa and Illinois will likely plant more corn. Otherwise, he said there will be more soybeans.
"If it's a wet spring and everything gets delayed three weeks, there will be more beans, no doubt about it," Matzner said.
Matt Bainbridge, vice chair of the South Dakota Soybean Research and Promotion Council and a farmer from Ethan, said the council is happy to see the USDA release its planting projection each year.
"I think we're happy that they report the number at least, so that you at least have a baseline or some sort of idea to go off of," Bainbridge said.
Bainbridge plans to plant more soybeans than corn this year, and he's happy to see so many soybean acres projected for the state.
"It's every farmer's decision what they want to plant and what they can be the most profitable, or have a chance for profitability anyway," Bainbridge said. "We're happy there are that many soybean acres, and hopefully everybody has a good yield, and hopefully we can get them sold."
Matzner didn't give an opinion on whether USDA should continue releasing the report, but he said traders would receive estimates from private firms if the government report wasn't released.
And while soybean prices have taken a tumble, he said crop insurance provides a solid floor for farmers, and weather will likely determine whether 2017 is a profitable year.
"The wild card is always weather," Matzner said. "If it don't rain in August, it don't matter what the price is."