Censky Discusses Soybean Demand and War’s Impact on Input Costs

The conflict involving Iran and the Strait of Hormuz has a well-documented impact globally and in the U.S. Steven Censky, the CEO of the American Soybean Association, is concerned about the specific effects the war has on agriculture, including the upward pressure on fertilizer prices. Censky points out that fortunately, much of the spring fertilizer was secured before the brunt of the price hikes.

“But there's a lot of worry out there what that's going to mean during the summer for any applications of fertilizer or certainly going into fall. And that's of great concern,” Censky told the South Dakota Soybean Network. “The other concern, of course, is diesel prices have gone up by over $2 a gallon. And that's really impacting farmers' bottom lines. And so, it's causing a lot of financial stress.”

Further, if input costs remain elevated, Censky predicts decisions to forgo fall fertilization resulting in perhaps a minor jump in next year’s soybean acres. Fertilization rates per acre might be reduced, or there could be farmers who decide to reduce seed populations to save money. On the plus side, soybean prices have made some recovery in the past six months, according to Censky, because of last fall’s summit between Presidents Trump and Xi, which took place in South Korea. China’s commitment at that time to resume soybean purchases from the U.S. strengthened the market.

“The second thing that has really made a difference with regard to soybean prices as well, is having some greater volumes announced under the renewable fuel standard for biomass-based diesel,” he said. “And that has strengthened soybean oil prices and strengthened soybean prices overall. And so, we're seeing the effects of that.”

Meanwhile, considering China’s soybean purchases from Brazil, Censky says future soybean demand will make a greater shift to domestic sources, such as bio-based fuels and livestock feed.

“I don't want to discount international. That still is important. We're still going to be exporting around 50 percent of what we produce,” said Censky, “but that domestic demand has become more of a driver.”

Censky is currently in his second tenure as ASA CEO. After being part of South Dakota Senator James Abdnor’s staff, Censky served the USDA in various roles, including in the agency’s Foreign Agricultural Service. After his most recent USDA appointment ended, Censky accepted an invitation to return to the American Soybean Association.

“It's going back to an industry that I love,” he stated, about his return to ASA’s top executive post. “I have spent a good part of my career working to try to advance the interest of soybean farmers and working both the policy and the markets and the development side of things to do whatever we can to expand opportunities and success for soybean farmers. When there was a change in the CEO when I was at USDA, they asked whether I'd be willing to come back and I said yes and I'm glad I did. And it's been just wonderful working for the soybean industry.”