‘Soy Wars’ leaves farmers no place to store beans

In the real-life drama that could be entitled “Soy Wars,” it is the farmers on the front line that are “taking it on the chin,” U.S. Rep. Ralph Abraham said.

Abraham concedes the situation with the soybean crop is bad and likely to get worse if steps are not taken to help soybean farmers out of the current market nightmare.

“Farmers could go bankrupt if something is not done,” he said.

EFFECT ON AVOYELLES

Avoyelles County Agent Justin Dufour said the soybean harvest in Avoyelles is about halfway finished. The harvest is a little later this year because planting was delayed due to dry conditions. That could help farmers whose beans are not currently sitting in wet fields accumulating weather-related damage.

“Those farmers with contracts with elevators should be okay,” Dufour said. “Those without contracts will have a hard time finding an elevator that will take their beans. We have a large surplus of beans.”

Some elevators have been sending truckloads of damaged beans back.

“Elevators are private companies,” Dufour said. “They can set their standards and can refuse to take beans that don’t meet those standards. The government can’t force an elevator to take a product.”

The price per bushel has been in the $8.50-$8.75 range, which is below what one farmer said is a “break-even” price of $10 per bushel. The reason for that is the surplus of beans caused by the “retaliatory tariff” by China on U.S. soybeans.

Farm Bureau President Phillip Lamartiniere also bemoaned the “triple whammy” of bad weather, no storage and the Chinese tariff.

“The market price is bad,” Lamartiniere said. “It is well below what is generally considered to be a decent price for a farmer to make money on his beans.”

Abraham is working on a solution that would involve the USDA revising its Market Facilitation Program (MFP) to help farmers who are unable to harvest their beans because “there is literally no place for the the beans to go.”

STRAIN’S UPDATE

Louisiana Agriculture Commissioner Mike Strain said the state is working to develop a large crushing facility “that would allow us to utilize soybeans that are not suitable for sale at market.”

Those damaged beans would be turned into soybean meal, oils or bio-diesel fuel, Strain added.

He also noted that more ships are moving loads of beans with more than 3 percent damage, providing some relief to farmers and grain elevators.

“That is a day-to-day situation” and not a long-term solution, he said.

“The good news is that we are moving some beans and the weather is better for those beans they are cutting now,” Strain said. “The beans being harvested now will be of higher quality.”

Strain said most farmers consider $8.50 a bushel “to be the break-even point for soybeans.”

The current market has been hovering around that point.

“The tariffs have closed markets and we are trying to offset that with new markets,” Strain said. “China bought 60 percent of the nation’s soybeans, so we have lost a significant portion of sales. The tariffs will probably cost soybean farmers $3-4 billion in sales to China.”

‘RETALIATION’ AID

The USDA rolled out its “Trade Retaliation Mitigation” aid program in August, with $3.6 billion of the $4.7 billion of MFP funds dedicated to soybeans. The USDA will pay soybean farmers $1.65 per bushel for their harvested beans.

The problem Louisiana soybean farmers are facing is that they cannot harvest the beans because many grain storage elevators have stopped accepting soybeans -- either
because the bins are at capacity due to the slowdown in exporting the beans or because of market conditions for the crop.

“We have 400,000 acres of soybeans to harvest in Louisiana and no place to put the beans,” Abraham said. “Some beans have damage due to wet conditions. In the past, we could mix some damaged beans with non-damaged beans and come out okay. We can’t do that now.

“Due to the China trade dispute, we have more soybeans coming down the Mississippi River headed for new trade partners like Argentina, the European Union and Africa,” Abraham continued. “There are fewer beans being shipped to the West Coast for transport to Asia.”

While new customers for future soybean crops is promising, it does not solve the immediate problem.

Abraham said Louisiana farmers are faced with a three-part problem -- high production, a reduced export market due to tariffs and no place to store the beans that are still waiting to be harvested.

“We have the best soybean farmers in the world in Louisiana,” Abraham said. “However, their great yield in soybeans needs to be moved quickly.”

Louisiana is one of the southernmost soybean producers in the nation “so we harvest our beans earlier. That means there is another 18 million acres of soybeans in the U.S. that will start cutting beans in two or three weeks. That will further complicate the situation.”

For that reason, among others, it is imperative the Bayou State beans are harvested, stored and, hopefully, sold within the next few weeks.

Abraham said the MFP allows payment to farmers to offset situations like the current “Soy Wars.”

“Right now, the MFP can only be used for harvested acres,” Abraham said. “There has to be a grain storage receipt before a payment can be issued.

BASE ON ACRES PLANTED

“I have asked the USDA secretary to use the MFP for planted acres, and not just for harvested acres,” he continued. “In Louisiana, the beans in the field have no place to go.”

Abraham said he has also asked the USDA to “incentive farmers with empty corn bins to allow soybeans to be stored there until we can get them on barges and sent to other markets.”

Abraham praised USDA Secretary Sonny Perdue and Strain for their efforts in trying to help farmers through this difficult period.

The doctor-turned-politician said he realizes “this is like putting a bandage on the problem to stop the bleeding until a bigger and better solution can be found.”

However, he added, said some kind of emergency temporary fix is needed to keep many farmers from going under.