Alabama soybean farmers are optimistic in light of China’s Dec. 12 purchase of U.S. soybeans, the nation’s first substantial U.S. agricultural purchase following a trade truce struck earlier this month.
China’s haul of over 1.5 million tons of soybeans is valued at more than $500 million. In 2017, China bought 60 percent of U.S. soybeans — worth $12.25 billion — a statistic noted by speakers at the Alabama Row Crop Short Course in Auburn Dec. 13.
“Having the option to send our soybeans to China again is huge news for Alabama farmers,” said James Walker, a Lauderdale County farmer who attended the two-day course. “The market has responded favorably, which is a good sign as we head into the 2019 crop year.”
Following the purchase, benchmark soybean futures on the Chicago Board of Trade hit their highest level since midsummer.
While celebrating the welcome trade news, American Soybean Association President Davie Stephens is urging the U.S. Department of Agriculture (USDA) to announce the second of half Market Facilitation Program payments promised to farmers earlier this year. The first round of payments was $1.65 per bushel, with soybean farmers receiving $3.6 billion total in direct payments.
Stephens said the roughly $2 drop in soybean prices since May pushed prices to decade lows and continues to harm farmers.
“When USDA calculated the harm incurred by the tariffs on soybean prices, it assumed that China would still purchase at least 50 percent of the 32 million tons of U.S. soybeans it bought in 2017,” Stephens said. “With only a fraction of this amount accounted for in this week’s announced sale, it is critically important that we see additional purchases and actual deliveries and for USDA to make a payment on the second half of 2018 soybean production.”