Second-largest soybean crop in U.S. history
Yield estimate lowered to 43.5 bushels per acre, but still the second-highest level on record
David Asbridge operates NPK Fertilizer Advisory Service, an independent consulting firm that covers the crop and fertilizer markets, both domestically and globally.
The 2010 U.S. soybean crop turned out to be a bit smaller than originally estimated earlier this year. The U.S. Department of Agriculture (USDA) revised its supply-and-demand estimates and lowered the area planted and area harvested to soybeans this past year from previous estimates.
Area planted to soybeans in 2010 is now estimated to have been 77.4 million acres, which would be down just slightly from the 77.5 million in 2009. Harvested area was set at 76.6 million acres, just above the 76.4 million in 2009. The USDA also lowered the yield estimate to 43.5 bushels per acre, still the second-highest level on record, just 0.5 bushel per acre below the 2009 record of 44.0 bushels.
These revisions caused the 2010 production figure to fall to 3.33 billion bushels. Although not a record, it is still the second-largest U.S. soybean crop in history, falling only about 1 percent from the record set in 2009.
Most of the states showed a decline in soybean area for the 2010 crop year, although there were some notable exceptions:
• Iowa led the nation in soybean area in 2010 with farmers there planting 9.8 million acres, up 200,000 acres from 2009 but still well below the record 11.0 million acres set back in 2001.
• Illinois was second in soybean area this year at 9.1 million acres, a 300,000-acre drop from its 2009 level. That was the largest decline in area of any state in 2010.
• Minnesota came in third at 7.4 million acres, up 200,000 from its previous level in 2009, and only 100,000 acres below their record set back in 2003.
• Indiana’s soybean area finished fourth for the year at 5.35 million acres, down 100,000 from 2009’s level.
• Missouri and Nebraska tied for the fifth spot at 5.15 million acres, which is down 200,000 acres for Missouri but up 350,000 acres for Nebraska from its respective 2009 levels.
• Kansas saw the largest increase in area this year as farmers there added 600,000 acres to reach a new record for them of 4.3 million acres.
On a production basis, Iowa led the nation with 496 million bushels of soybeans in 2010, followed closely by Illinois with 466 million. Minnesota was third with 329 million bushels. Nebraska was next with 268 million bushels, with Indiana rounding out the top five states with 259 million bushels. On a yield basis, Nebraska rose to the top with an average yield of 52.5 bushels per acre. Illinois followed closely at 51.5, with Iowa next at 51.0 bushels per acre. Wisconsin was next at 50.5 bushels, with Indiana rounding out the top five with 48.5 bushels per acre.
USDA also made some adjustments to the demand side of the balance in this month’s report. The agency lowered the crush level for the 2010 crop year to 1.66 billion bushels. This is 5.5 percent below last year’s crush level, mostly due to much lower estimates for exports of both soybean meal and soybean oil this year.
The U.S. exports of these products are expected to be down sharply due to the return of Brazil and Argentina to their prior levels of shipments after a major drought cut their production and exports of products last year.
Domestic use of soybean meal is expected to be slightly lower than last year as the livestock industry continues to struggle with profitability due to high costs of feed.
Soybean oil usage in the U.S., however, is expected to jump by nearly 8 percent this year. The biggest factor in that jump will be the 70 percent surge in soybean oil used to produce biodiesel. Congress reinstated the biodiesel blender’s credit of $1.00 per gallon for 2010 and 2011, giving many biodiesel producers the ability to restart plants that were closed down when the credit expired in December 2009.
U.S. exports of whole soybeans for the 2010 crop year are now forecast to reach a new record of 1.59 billion bushels, or about 48 percent of the entire U.S. crop. The continually increasing exports of U.S. soybeans are mostly due to the nearly insatiable appetite for soybeans by the Chinese. They are expected to increase their imports of soybeans this year to nearly 2.1 billion bushels as their total usage moves up to exceed 2.5 billion bushels. Nearly half of the soybeans exported from the U.S. this year will go to China. As the Chinese economy moves up at 8 to 9 percent per year, incomes are growing and the demand for meat, both pork and poultry, continues to push their livestock producers to use more feed — of which soybean meal is a prime ingredient. Their growing incomes also mean more consumption of vegetable oils, although they use more palm oil than soybean oil.
The result of these changes was a cut in the 2010 ending stocks estimate to only 140 million bushels. This will be a decline of 11 million bushels from the already tight 2009 ending level. This equates to a 4.2 percent stocks-to-use ratio, one of the lowest in recent history. The market typically likes to see about a 7 to 8 percent stocks-to-use ratio in order to feel that the system is in balance.
The market has been responding to the lower-than-expected stocks by moving to some of the highest prices in over two years. USDA forecast that the average soybean cash price for the 2010 crop year will be in the area of $11.70 per bushel, almost $2 per bushel above the record level set for the 2007 crop as prices skyrocketed that year due to falling stocks.
High prices are likely to continue until the market gets a better idea of South American production, as farmers there prepare to start their harvests. The next factor will be the spring weather here in the U.S. and the impact that will have on the numbers of acres planted to soybeans.
Second-largest soybean crop in U.S. history
Yield estimate lowered to 43.5 bushels per acre, but still the second-highest level on record
January 24, 2011
David Asbridge operates NPK Fertilizer Advisory Service, an independent consulting firm that covers the crop and fertilizer markets, both domestically and globally.
The 2010 U.S. soybean crop turned out to be a bit smaller than originally estimated earlier this year. The U.S. Department of Agriculture (USDA) revised its supply-and-demand estimates and lowered the area planted and area harvested to soybeans this past year from previous estimates.
Area planted to soybeans in 2010 is now estimated to have been 77.4 million acres, which would be down just slightly from the 77.5 million in 2009. Harvested area was set at 76.6 million acres, just above the 76.4 million in 2009. The USDA also lowered the yield estimate to 43.5 bushels per acre, still the second-highest level on record, just 0.5 bushel per acre below the 2009 record of 44.0 bushels.
These revisions caused the 2010 production figure to fall to 3.33 billion bushels. Although not a record, it is still the second-largest U.S. soybean crop in history, falling only about 1 percent from the record set in 2009.
Most of the states showed a decline in soybean area for the 2010 crop year, although there were some notable exceptions:
• Iowa led the nation in soybean area in 2010 with farmers there planting 9.8 million acres, up 200,000 acres from 2009 but still well below the record 11.0 million acres set back in 2001.
• Illinois was second in soybean area this year at 9.1 million acres, a 300,000-acre drop from its 2009 level. That was the largest decline in area of any state in 2010.
• Minnesota came in third at 7.4 million acres, up 200,000 from its previous level in 2009, and only 100,000 acres below their record set back in 2003.
• Indiana’s soybean area finished fourth for the year at 5.35 million acres, down 100,000 from 2009’s level.
• Missouri and Nebraska tied for the fifth spot at 5.15 million acres, which is down 200,000 acres for Missouri but up 350,000 acres for Nebraska from its respective 2009 levels.
• Kansas saw the largest increase in area this year as farmers there added 600,000 acres to reach a new record for them of 4.3 million acres.
On a production basis, Iowa led the nation with 496 million bushels of soybeans in 2010, followed closely by Illinois with 466 million. Minnesota was third with 329 million bushels. Nebraska was next with 268 million bushels, with Indiana rounding out the top five states with 259 million bushels. On a yield basis, Nebraska rose to the top with an average yield of 52.5 bushels per acre. Illinois followed closely at 51.5, with Iowa next at 51.0 bushels per acre. Wisconsin was next at 50.5 bushels, with Indiana rounding out the top five with 48.5 bushels per acre.
USDA also made some adjustments to the demand side of the balance in this month’s report. The agency lowered the crush level for the 2010 crop year to 1.66 billion bushels. This is 5.5 percent below last year’s crush level, mostly due to much lower estimates for exports of both soybean meal and soybean oil this year.
The U.S. exports of these products are expected to be down sharply due to the return of Brazil and Argentina to their prior levels of shipments after a major drought cut their production and exports of products last year.
Domestic use of soybean meal is expected to be slightly lower than last year as the livestock industry continues to struggle with profitability due to high costs of feed.
Soybean oil usage in the U.S., however, is expected to jump by nearly 8 percent this year. The biggest factor in that jump will be the 70 percent surge in soybean oil used to produce biodiesel. Congress reinstated the biodiesel blender’s credit of $1.00 per gallon for 2010 and 2011, giving many biodiesel producers the ability to restart plants that were closed down when the credit expired in December 2009.
U.S. exports of whole soybeans for the 2010 crop year are now forecast to reach a new record of 1.59 billion bushels, or about 48 percent of the entire U.S. crop. The continually increasing exports of U.S. soybeans are mostly due to the nearly insatiable appetite for soybeans by the Chinese. They are expected to increase their imports of soybeans this year to nearly 2.1 billion bushels as their total usage moves up to exceed 2.5 billion bushels. Nearly half of the soybeans exported from the U.S. this year will go to China. As the Chinese economy moves up at 8 to 9 percent per year, incomes are growing and the demand for meat, both pork and poultry, continues to push their livestock producers to use more feed — of which soybean meal is a prime ingredient. Their growing incomes also mean more consumption of vegetable oils, although they use more palm oil than soybean oil.
The result of these changes was a cut in the 2010 ending stocks estimate to only 140 million bushels. This will be a decline of 11 million bushels from the already tight 2009 ending level. This equates to a 4.2 percent stocks-to-use ratio, one of the lowest in recent history. The market typically likes to see about a 7 to 8 percent stocks-to-use ratio in order to feel that the system is in balance.
The market has been responding to the lower-than-expected stocks by moving to some of the highest prices in over two years. USDA forecast that the average soybean cash price for the 2010 crop year will be in the area of $11.70 per bushel, almost $2 per bushel above the record level set for the 2007 crop as prices skyrocketed that year due to falling stocks.
High prices are likely to continue until the market gets a better idea of South American production, as farmers there prepare to start their harvests. The next factor will be the spring weather here in the U.S. and the impact that will have on the numbers of acres planted to soybeans.