The Farm CPA
Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.
Is South America's Soy Harvest a Threat to North America's Price
Mar 22, 2010
On Monday, the Wall Street Journal wrote an article titled "Americas' Soy Harvest Booms".
The article recapped the record soybean harvest that is under way in South America.
The Brazil crop is estimated at 67.5 million metric tons which is about 2.6 billion bushels. This is up about 18% from last year and beats the previous record set in 2007-08 crop year by about 275 million bushels.
Argentina's crop is pegged at about 1.9 billion bushels which is about 10% higher than their record 2006-07 crop.
Paraguay and Uruguay's crops are much smaller, but still account for about 300 million bushels.
Add all of the bushels together and you have a total South American soybean harvest of about 4.8 billion bushels which is about 1.4 billion bushels more than our 2009 crop of 3.4 billion.
Now these are production numbers. The main problem with the South American crop is that they can harvest, but can not always get it to port to be exported. It will be interesting to see how well they get it sold and shipped.
A recent Farm Journal poll indicated that US farmers probably plan on planting more beans this year than last
primarily due to the good price ratio of beans to corn. If your plans are along this same line, I would strongly suggest that you consider locking in these good current prices with an appropriate hedge.
If South America does a good job of getting their beans onto the world market, our prices may go down.