American soybean farmers are caught in the middle of the China-U.S trade war. The farmers are risking storing their crops rather than instantly selling them to the market in hope that the tensions ease and China starts buying from them again.
The American farming industry is greatly affected by the U.S.-China trade tensions. Rather than selling their freshly harvested crops, they are now storing their products in whatever storage they can get to keep it safe and dry.
The farmers are hoping that in the following months, the tensions between the two economic giant appease and the trade to China goes back to normal. The farmers are facing great risk in this process. Even though, predictions conclude the increase in prices next year for the beans. It is, however, uncertain since it is dependent on the result of the trade negotiations and the rising supply.
The crops storage life also endangers the farmer's products. Soybeans, unlike corns, needs complicated storage method since it needs to be kept super dry because it absorbs moisture fast and it rots quickly. According to Wayne Humphreys, a farmer from Iowa, soybeans smells like road kill as it rots and it has a consistency of mashed potato which is slick and mushy. Humphreys still decided to store as much harvest as he could besides knowing the risks until the right time to sell it to the market.
China is America's top market for soybeans. The soybean oil has lots of uses for the Chinese, ranging from hog feed to cooking oil. According to records China's imports from the US dropped to almost 90 percent in September from last year.
The U.S. Department of Agriculture predicts that U.S. soybean inventories are expected to reach 955 million bushels at the end of the year. Farmers believe that they are left with little choice but to store their harvested products. Farmers claim that millions of bushels of soybeans will reach nowhere since terminals and other trade outlets are regulating the products because of the tariff's effect. According to them, the terminals in Portland are once a key outlet in the Pacific Northwest that ships to China. Nowadays, the terminals are rarely offering bids for the product.
According to reports, the farmers expect soybean futures for delivery next t=month to be around the U.S. $9.27 as of Nov 9 which indicates that storing their products and selling it on a later time might bring in money.
