US Soybean Exports at All-Time High
Record US Soybean Exports Contribute to Price Surge
ANKENY, Iowa (DTN) -- The United States is on the verge of setting a record for soybean exports during the current marketing year, which ends Aug. 31, that's contributed to a resurgence in prices and profitability for farmers.
Projects are in the works to keep soybean demand, and consequently prices, high for farmers, according to U.S. Soybean Export Council (USSEC) and industry leaders gathered at the three-day U.S. Soy Global Trade Exchange and Specialty Grains Conference and Trade Show (GTE) in St. Louis. The in-person and virtual conference, which ends Aug. 26, provides international buyers and the U.S. agricultural community insight on soybean supply and demand and key innovations and sustainable developments in the industry.
USSEC CEO Jim Sutter said during a GTE news conference on Aug. 25 that he's amazed that U.S. soybean exports are on pace to set a new all-time high at 2.26 billion bushels for the 2020-21 marketing year, according to the latest USDA projections. That's despite COVID-19 trade disruptions, such as container shortages, and continued unrest in some regions of the world, the latest being Afghanistan.
"The global demand surprised all of us a little as we went through this COVID time," Sutter said in response to a DTN question about what led to the historic export year. "I was concerned we would see a decline in demand. Instead, we saw strong demand in many markets around the world.
"The U.S. was a place that people could turn to (for soybeans)," he continued. "We came into the marketing year with a large carryout, and we had a good crop last year. We now have shipped out what was the carry and virtually all the crop produced. That led to record exports."
The U.S. started the 2020-21 marketing year with 525 million bushels of soybeans on hand, according to USDA data. The 2020 crop totaled 4.1 bb. Ending stocks for the current marketing year are estimated at 160 mb.
China, the largest global soybean purchaser, led the way, buying U.S. soy during the current marketing year at 1.3 bb, or 30%, of last year's production, USSEC reported.
Sutter said strong demand by other longtime customers such as the European Union and Mexico and growing markets in Egypt and Bangladesh also led to the export surge. The U.S. exported 1.68 bb of soybeans in the 2019-20 marketing year.
PRICE BOOST
A meteoric rise in prices has occurred since the spring of 2020 when cash soybeans dropped below $8 per bushel (bu). Foreign demand for U.S. soybeans, along with a robust domestic crush and dwindling supplies, led the charge.
November soybean futures are valued at nearly $13.28/bu as of Aug. 26. USDA estimates the average farm price will rise from $10.90 to $13.70/bu from the 2020-21 to 2021-22 marketing years, respectively.
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"Demand creates opportunities," said Bob Sinner, a fifth-generation farmer from Casselton, North Dakota, and chairman of the Specialty Soya and Grains Alliance. His family-owned business, SB&B, is a producer, processor and supplier of food-grade crops to markets around the world.
During the news conference, Sinner emphasized that "farmers are finally beginning to see profitability on their operations as the Chicago Board of Trade prices increase. Demand is creating that."
SUSTAINING DEMAND
Sutter said USSEC and industry partners will do what they can to keep demand high and make the U.S. the "supplier of choice" for soybeans and soybean products.
USSEC's leader outlined projects either in place or in the works to make that happen. Here are three:
-- The U.S. Soy Nutrient Bundle Advantage Value Calculator. USSEC, working with Genesis Feed Technologies, offers customers use of a recently developed software program that assesses the entire economic impact of using U.S. soybeans in livestock feed. Read more about it here: www.unitedsoybean.org/hopper/meal-value-calculator-new-software-showcases-benefits-of-us-soybean-meal/.
Many soybean buyers make purchasing decisions based solely on price, Sutter said. Sometimes, U.S. soybeans aren't the cheapest available. Sutter said the calculator helps companies better understand how the amino acid profile, energy and digestibility attributes of U.S. soy figures into its overall value.
"It's really a game changer," Sutter added. "It allows people to understand on a dollar-per-ton basis the difference in the value of soy from different origins."
-- U.S. Soy Database. Sutter said USSEC will soon launch the database, billed as the largest single source of information on the quality of more than 120 U.S. soybean varieties.
"It offers buyers the flexibility to select a variety by the intended end use, such as to make tofu," he continued. It will contain factors such as protein level, oil, hilum color and amino acid level. Buyers can "narrow down which suppliers and geographic area to target as they source U.S. soybeans."
-- Soy Excellence Centers. USSEC is opening the centers around the world with Initial locations in Egypt, Honduras, Thailand, Nigeria and China.
Soybean specialists at the centers will provide education and expertise to customers to better utilize soybeans to produce livestock and food more efficiently. "It's like putting our former programs on steroids," Sutter said. "The centers allow us to extend the reach of U.S. soy, which is a critical component to differentiate and build (customer) preference."
NEW MARKETING YEAR
With the start of the new marketing year only days away, grain analysts and soybean leaders are optimistic demand for U.S. soy products will remain strong. However, there are factors at play that could slow the flow of U.S. commodities internationally.
U.S. soybean producers survived a trade war between the U.S. and China, African swine fever in China and a global pandemic to set a new export record, which should give growers hope for the future, said DTN Lead Analyst Todd Hultman.
"The pandemic has not gone away and is causing serious problems again in 2021," Hultman continued. "But given the past tenacity of soybean demand, especially out of China, I suspect the USDA's U.S. soybean export estimate of 2.055 bb for 2021-22 will be achieved and possibly more."
The latest prices from China's Dalian Exchange show November soybeans at the equivalent of $18.72/bu, near the highest price of the year, Hultman reported. It's a good sign of demand, despite restrictive measures taken to stop the spread of the COVID-19 delta variant. Hultman said China accounts for 59% of the world's soybean imports and simply does not have the arable land needed to produce the soybeans they need. Meanwhile, China's GDP continues to grow. In June, the World Bank estimated real GDP in China will be up 8.5% in 2021, fueling demand for more protein.
"We are optimistic about what's on the horizon," said Monte Peterson, USSEC chairman and Valley City, North Dakota, farmer. "Orders for U.S. soy into the next year look strong."
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Matthew Wilde can be reached at matt.wilde@dtn.com
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