Heavy rains covering much of Arkansas have further slowed harvest for both cotton and soybeans, and are already causing significant discounts in payout to growers, experts with the University of Arkansas System Division of Agriculture said recently.
According to a recent report from the U.S. Department of Agriculture’s National Agricultural Statistics Service, 44 percent of the state’s soybean acres have been harvested, compared to the five-year average of 60 percent by this point in the season. Cotton, having enjoyed a strong start earlier in the season, remains far ahead of the five-year average of 42 percent, sitting at 67 percent harvested.
The Oct. 11 USDA Crop Production Report downgraded the state’s soybean yield estimate, from 50 bushels per acre on Sept. 1 to 48 bushels per acre on Oct. 1. Overall production is forecast to drop to 156 million bushels in 2018, from 178.5 million in 2017. Nationwide, soybean production is forecast to rise to about 4.69 billion bushels in 2018, up from about 4.41 billion bushels in 2017.
Jeremy Ross, extension soybean agronomist for the Division of Agriculture, said that even as the 2018 harvest slowly catches up to the state’s five-year average, ongoing weather events are taking a bite out of farmers’ pockets.
“Early-planted beans, which would normally be harvested about the first week of September, were delayed by two to three weeks,” Ross said. “With the wet conditions and above-average daily temperatures, we started to see a lot of quality issues.”
Ross said grain buyers are reporting anywhere from 2 percent to 20 percent damage in soybeans, resulting in discounts as high as $1.25-$1.50 per bushel—a significant, possibly devastating financial bite, depending on how a given grower marketed his or her crop.
“If a farmer got their beans booked at $10 the first of the year—that’s down to $8.50,” Ross said. “But if they’re trying to sell it at the current $8 range, now you’re talking as low as $6.50.
“Prices are reduced already because of trade tariffs and depressed commodity prices, so this was just another thing farmers really didn’t need,” he said.
The problem is bigger than Arkansas. Ross said researchers and agronomists in Louisiana and Mississippi have reported similar or even worse conditions for soybeans in their respective states. Growers in Kentucky, Tennessee, southern Ohio, Iowa and elsewhere are also experiencing delays in harvest and associated downgrades in quality.
Ongoing trade tariffs are also reducing demand for U.S. soybeans abroad.
“The problem right now is that there’s really no buyers for the beans that are coming off,” Ross said. “Bean stocks are backing up at the ports, and the elevators are almost at their capacity for grain storage, with no place for it to go. It’s just a bad situation.”
Scott Stiles, extension economist for the Division of Agriculture, said the weather and trade tariffs are just two ingredients in a challenging marketplace for growers right now.
“A lot of things are happening at one time—none of which are good,” Stiles said. “We saw the November futures contract peak in late May at $10.60, and then drop 23 percent to a low of $8.12 by mid-September. The last time the November contract traded that low was in March 2009. Basis has been the weakest since 2008—this is the difference between the local cash price and the futures price.”
In late July, USDA announced a trade mitigation assistance program that will offer some relief to growers in the form of direct payments of $1.65 per bushel on 50 percent of harvested yield. An announcement on any additional payments for the remaining 50 percent of production could be made in early December. Farmers have until Jan. 15 to sign up for his program, which is called the Market Facilitation Program. You can learn more at www.farmers.gov/manage/mfp.
