Editors Note: This column was originally published in the Aug. 23, 2023 issue of the Chronicle Progress.
There was a time when the U.S. Department of Agriculture’s (USDA) August Crop Production report was more feared by American farmers than any paste-colored Soviet leader with a shaky finger near the nuclear launch button.
Now, however, the August report generates more yawns than yips.
So it was again Friday, Aug. 11, when USDA’s first detailed look of the 2023 corn/ soybean production year confirmed what most farmers already suspected: Almost everyone in American agriculture will be dealing with lower prices, shrinking profits, and tighter belts for much of the upcoming marketing year.
Still even tougher—if not as well-reported—soybean market news arrived the same day in USDA’s Foreign Agricultural Service’s (FAS) Oilseeds: World Markets and Trade report.
The bad-news portion of that report showed just how little total U.S. soybean exports have moved compared to how far Brazilian soybean exports have soared since the 2020/21 crop year. According to the FAS, this coming year’s U.S. soybean exports will extend their four-year slide from 61.6 million metric tons (mmt) in 2020/21 to 49.7 mmt for 2023/24. That 11.9 mmt drop translates into 440 million bu. less U.S. soybeans going overseas this coming year than just four short years ago.
And it’s not because the world (principally, China) is importing fewer soybeans; total year-to-year world soybean imports are pretty stable at 165-166 mmt.
Brazil’s simple trick is no trick at all; it just takes market share, almost at will, through price. In 2020/21, for example, Brazil exported 81.6 mmt of soybeans. This coming year, FAS estimates Brazil will export a whopping 96.5 mmt, an increase of 545 million bu.—or 105 million bu. more than the total bushels lost by the U.S.—in the last four years.
Despite that loss, U.S. soybean exports are still in better shape in today’s global market than other big American ag exports like corn, wheat, cotton, and milled rice. In a striking and informative Aug. 11 video presentation by farmdocDAILY, Joana Colussi compared 2022 U.S. exports for the four crops to their 2017-2022 average exports.
The results were stark. U.S. corn exports last year were 25 percent lower than their five-year average, wheat’s 2022 exports were off 16 percent, cotton down 16 percent, and milled rice down 31 percent. Soybean exports over the same period were as flat as an anvil.
As revealing as those figures are, they are even worse when 2022 U.S. ag exports for all five crops are compared to what American export competitors sold. While our corn, wheat, cotton, and rice exports were headed south, the rest of the world increased its 2017- 2022 exports—mostly at our expense—of corn by 10 percent, wheat by 16 percent, and rice by 17 percent.
And our soy competitors? The rest of the world increased their collective soybean exports by 11 percent over the five marketing years while ours just held steady. (The competitors’ cotton exports fell 11 percent while ours was off 16 percent. Worldwide, cotton continues to fall out of favor.)
All these numbers point to two growing worries for the Biden White House, Congress, and U.S. farm and commodity groups.
First, given our coming, more-than-enough corn and soybean crops, sagging exports, and bound-to-slip prices, the Biden Administration will be under increasing pressure to come up with creative ways to boost farm program payments when farm income inevitably slides and election-year politics just as inevitably pick up steam.
Second, how much more hard evidence do farm groups and Farm Bill writers need before they acknowledge that yesterday’s export-directed, revenue insurance-heavy Farm Bills need revision for U.S. farmers to compete in today’s changing global markets?
And, no, America’s days as a major ag exporter aren’t over, but its days as the dominant player in the global corn, cotton, wheat, and rice markets likely are even as it clings to its part of the global soy market.
A forward-thinking farm bill would recognize that plain fact even if we choose not to.
The Farm and Food File is published weekly through the U.S. and Canada. Past columns, events and contact information are posted at www.farmandfoodfile.com.
