Now this: worldwide shortage of soybeans, a 48-year low:
Dry weather and shipping delays in South America are boosting demand for soybeans from the U.S., the world’s largest grower and exporter, and producing the tightest inventories in almost five decades.
Stockpiles will shrink to a nine-year low of 130 million bushels on Aug. 31, before the next U.S. harvest, according to the average of 31 analyst estimates in a Bloomberg survey. Reserves will total 4.2 percent of demand, the lowest since 1965, U.S. Department of Agriculture data show. The USDA will update its estimates tomorrow.And so it goes.
For years Brazil and the US were in fierce competition for the production of soybeans keeping the commodity price low and close to the price of production. During the farm crises of the 1980s soybeans were not a great money maker. $8 dollar beans were thought to be not too bad. Now prices have more than double that compared to the 80s thanks to the drought and other factors.
ReplyDeleteI believe Brazil has gone to growing more sugar cane for the production of ethanol and have reduced their acres planted to soybeans.
Beans have a shorter growing season than corn so North Dakota should due fine with soybeans. They can withstand drought better than corn. It takes a lot more moisture to produce corn.
Agriculture has been doing fine with the current commodity prices.
I did not know about the "competition" between Brazil and the US with regard to soybeans. Very, very interesting.
DeleteAn earlier article suggested global warming will result in durum moving a bit west from North Dakota to Montana. This opens the door to more soybean acreage in North Dakota -- so everything should work out. Smile.
Funny coincidence. I hear they serve tofu in school lunches these days. Maybe all of that extra Michelle Obama contrived demand, found mostly in the trash cans, is adding to these tight inventories.
ReplyDeleteSo with Mr Obama pushing corn --> ethanol; and Mrs Obama pushing soy/tofu --> children, the farmers in the Midwest should do fine. Smile.
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