The Japan Effect
U.S. soybean crop’s final figures could be impacted by Japan disasters by year’s end
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 is currently estimated at 3.33 billion bushels, making this the second largest soybean crop in U.S. history, just under one percent less than last year’s record crop of 3.36 billion bushels. However, with the relatively small carryover from last year’s crop, this is only the third largest soybean supply, well below the record set back in 2006 when there was 3.66 billion bushels of soybeans available for use.
On the demand side, the 2010 crop is expected to have the second largest consumption as well, just 6 million bushels below last year’s record. Crush is expected to fall off by about 6 percent due to less demand for soybean meal and oil exports and despite a large increase in soybean oil consumption for biodiesel production. The increased soyoil use for biodiesel is due to the re-instatement of the Biodiesel Blenders’ credit of $1 per gallon which had expired at the end of 2009. Usage for biodiesel production fell by 17 percent for the 2010 crop year due to the lack of the credit. Soybean exports, however, are currently expected to continue to increase and set a new record of 1.59 billion bushels for the 2010 crop.
One item to note here, however, is that the earthquake and tsunami in Japan could impact that figure by year end. The reason that the devastation in Japan could impact U.S. soybean exports is that Japan is the third largest customer for U.S. soybeans and has been for the past several years. They fall behind only China and Mexico in U.S. soybean export destinations. For instance, last year Japan imported about 86 million bushels of U.S. soybeans, just behind Mexico’s 120 million bushels but still only a small part compared to China’s massive 825 million bushels.
The impact of Japan’s problems will not be known for a while. They have lost docks and import facilities and there is no news yet how many livestock have been destroyed by the massive tsunami that swept across some of the most intensely farmed areas in the northern part of the country. Of course, this could mean larger meat exports to Japan as they assess the damage and go about rebuilding their livestock herds.
Japan’s imports of U.S. soybeans have been slowly moving lower over the past few years. Their recent peak of 116 million bushels was set back during the 2006 crop marketing year, although their all-time peak was set at 146 million bushels back in 1992/93. Their total soybean imports have followed roughly the same pattern although their all-time high was set in 2002 at 187 million bushels from all sources. They have increased their soybean meal imports over time, reaching about 2.1 million tonnes last year with about 25 percent of that coming from the U.S.
The reason for their slowly fading soybean imports is pretty clear when you look at their livestock slaughter numbers. Their peak cattle slaughter number was back in 1985 at 1.6 million head. That has now fallen to only about 1.2 million head per year. Their swine slaughter numbers have followed roughly the same pattern. After reaching a peak of 21 million head in 1985, they are currently down to only about 17 million head during the last full year’s worth of data. As for broiler production, they reached their peak back in 1989 at 1.36 million tonnes. Since then, they have fallen as low as 1.07 million in 2001 but have rebounded somewhat to their current figure of about 1.28 million tonnes.
Again, there are no estimates yet as to what impact the tsunami may have on those figures for this year. On another note, USDA will soon issue its Prospective Plantings report for the 2011 crop year.
Next month, I will take a look at what farmers are thinking about their spring planting plans and what impact that could have on soybean production and usage for the upcoming year. And, don’t forget to leave any comments or questions on this article.
The Japan Effect
U.S. soybean crop’s final figures could be impacted by Japan disasters by year’s end
March 28, 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 is currently estimated at 3.33 billion bushels, making this the second largest soybean crop in U.S. history, just under one percent less than last year’s record crop of 3.36 billion bushels. However, with the relatively small carryover from last year’s crop, this is only the third largest soybean supply, well below the record set back in 2006 when there was 3.66 billion bushels of soybeans available for use.
On the demand side, the 2010 crop is expected to have the second largest consumption as well, just 6 million bushels below last year’s record. Crush is expected to fall off by about 6 percent due to less demand for soybean meal and oil exports and despite a large increase in soybean oil consumption for biodiesel production. The increased soyoil use for biodiesel is due to the re-instatement of the Biodiesel Blenders’ credit of $1 per gallon which had expired at the end of 2009. Usage for biodiesel production fell by 17 percent for the 2010 crop year due to the lack of the credit. Soybean exports, however, are currently expected to continue to increase and set a new record of 1.59 billion bushels for the 2010 crop.
One item to note here, however, is that the earthquake and tsunami in Japan could impact that figure by year end. The reason that the devastation in Japan could impact U.S. soybean exports is that Japan is the third largest customer for U.S. soybeans and has been for the past several years. They fall behind only China and Mexico in U.S. soybean export destinations. For instance, last year Japan imported about 86 million bushels of U.S. soybeans, just behind Mexico’s 120 million bushels but still only a small part compared to China’s massive 825 million bushels.
The impact of Japan’s problems will not be known for a while. They have lost docks and import facilities and there is no news yet how many livestock have been destroyed by the massive tsunami that swept across some of the most intensely farmed areas in the northern part of the country. Of course, this could mean larger meat exports to Japan as they assess the damage and go about rebuilding their livestock herds.
Japan’s imports of U.S. soybeans have been slowly moving lower over the past few years. Their recent peak of 116 million bushels was set back during the 2006 crop marketing year, although their all-time peak was set at 146 million bushels back in 1992/93. Their total soybean imports have followed roughly the same pattern although their all-time high was set in 2002 at 187 million bushels from all sources. They have increased their soybean meal imports over time, reaching about 2.1 million tonnes last year with about 25 percent of that coming from the U.S.
The reason for their slowly fading soybean imports is pretty clear when you look at their livestock slaughter numbers. Their peak cattle slaughter number was back in 1985 at 1.6 million head. That has now fallen to only about 1.2 million head per year. Their swine slaughter numbers have followed roughly the same pattern. After reaching a peak of 21 million head in 1985, they are currently down to only about 17 million head during the last full year’s worth of data. As for broiler production, they reached their peak back in 1989 at 1.36 million tonnes. Since then, they have fallen as low as 1.07 million in 2001 but have rebounded somewhat to their current figure of about 1.28 million tonnes.
Again, there are no estimates yet as to what impact the tsunami may have on those figures for this year. On another note, USDA will soon issue its Prospective Plantings report for the 2011 crop year.
Next month, I will take a look at what farmers are thinking about their spring planting plans and what impact that could have on soybean production and usage for the upcoming year. And, don’t forget to leave any comments or questions on this article.