ANKENY, IOWA — The 2016 soybean crop is a monster and it just keeps getting bigger, according to government crop production estimates released today.
But Iowa Soybean Association (ISA) leaders and industry experts say a bin-buster harvest is accompanied by an insatiable appetite for soybeans and soybean products here and abroad. Robust demand, they say, will devour supplies and support prices.
“The domestic and global interest in our soybeans gives me confidence in the future,” said Bill Shipley, farmer from Nodaway and Iowa Soybean Association president elect. “China is buying an incredible amount of our soybeans and interest is strong in Southeast Asia and around the globe. Income and diets are improving, and protein-packed soybeans are in demand.”
All but 5 percent of Iowa’s record 560.5-million-bushel soybean crop is in the bin or off to market, according to the latest U.S. Department of Agriculture (USDA) crop production and progress reports. The average yield statewide is estimated at 59 bushels per acre, up 1 bushel from last month, which led to the 9.5-million-bushel increase from the prior near-record forecast.
National soybean production is pegged at an all-time-high 4.36 billion bushels, up 92 million bushels from last month. The average soybean yield is forecasted at a record 52.5 bushels per acre, up 1.1 bushels from October.
“The raised production estimates don’t surprise me because almost everyone had very good yields,” Shipley said. “The high carryout is somewhat concerning, but demand is strong.”
U.S. soybean ending stocks are projected at 480 million bushels, up 85 million bushels from the previous forecast, according to today’s USDA World Agricultural Supply and Demand Estimates (WASDE) Report. A 20-million-bushel decrease in domestic crush was more than offset by a 25-million-bushel increase in soybean exports, now estimated at more than 2 billion bushels.
“Export sales are just huge. China seems to be buying soybeans with both hands,” said Al Kluis, owner of Kluis Commodities of Wayzata, Minnesota.
Industry officials say it’s likely U.S. soybean stocks will be half or less than half of current projections given demand and the USDA’s tendency to overestimate final numbers.
“They’ve done it the last three years and eight out of the last 10,” Kluis said.
The U.S. season-average soybean price range is projected at $8.45 to $9.95 per bushel, up 15 cents on both ends despite a larger anticipated soybean crop and carryout, according to the WASDE Report.
ISA Chief Operating Officer Karey Claghorn will accompany Gov. Terry Branstad and other Iowa commodity, livestock and economic officials on a seven-day trade mission to China and Japan this month. The goal is to increase meat exports, which in turn creates demand for soybeans.
“It’s critical to build demand for meat since livestock is the No. 1 consumer of soybeans,” said Claghorn, former Iowa Deputy Secretary of Agriculture. “We’ll meet with customers to discuss this year’s crop and reassure them U.S. farmers produce the highest quality and safest food products in the world.”