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szdaily -> World Economy -> 
US soybean farmers turn back to grains
    2018-11-05  08:53    Shenzhen Daily

SINCE the mid-2000s, North Dakota farmer Paul Thomas has planted more of his land with soybeans as China’s demand for the oilseed grew. The shift culminated this year when Thomas planted 1,600 of his 5,000 acres (2,000 hectare) with soybeans, the most ever.

But Thomas and many farmers like him plan to return to the old U.S. farm belt staples in 2019: corn and wheat. The change will reverse a trend that saw U.S. farmers plant more acreage this year with soybeans than corn for the first time in 35 years.

The expected shift to other grains comes as farmers struggle to sell the soybean crop because of U.S. President Donald Trump’s trade war with China. China typically buys 60 percent of U.S. soybean exports but has bought almost none for months due to the trade tensions, pushing prices to a decade low.

Thomas plans to plant more wheat next year, hoping he can earn more by decreasing his reliance on the crop dependent on Chinese demand.

Soybean prices are “kicking our butts,” said Thomas.

Without China, Thomas said local cash prices near his farm are US$7.10 per bushel of soybeans, below the US$8.50 necessary to cover costs.

The trade war has hit U.S. farmers at a vulnerable time. They had planted more acreage than ever with soybeans this year and are harvesting the largest-ever U.S. crop.

The U.S. Department of Agriculture, in the agency’s first estimate for next year’s planting to include the impact of the tariffs, estimated Friday that 2019 corn plantings will rise about 3 million acres to 92 million acres. Wheat acres would rise to 51 million acres, up from 47.8 million this year, while soybean acres would fall to 82.5 million acres.

Acreage of soybeans, planted before tariffs were imposed, rose to 89.145 million this year, up about 15 million acres from a decade ago.

Corn acres are up by less than 5 million acres since 2008 to 89.1 million acres while the wheat acrages of 47.8 million this year was near the lowest in a century.

Aron Carlson, president of the Illinois Corn Growers Association, devoted nearly half of his 3,600 acres to soybeans this year but plans to cut back.

He said he may increase corn planting by up to 20 percent at his farm in northern Illinois. The state is the biggest U.S. soy producer.

Soybeans yield fewer bushels per acre than corn but also require less fertilizer, making them generally cheaper to grow. A switch to corn could raise costs for farmers but benefit some companies including fertilizer sellers like The Andersons Inc.

Corn demand has benefited from long-term growth in the livestock industry and grain-based ethanol. Drought in Brazil and Argentina also made corn importers more reliant on the United States. (SD-Agencies)

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