U.S. Soybean Crop Poised for Second Consecutive Record

This year’s soybean crop is bigger than ever. The latest World Agricultural Supply and Demand Estimates show the U.S. soybean crop to be the biggest on record. If the numbers hold, it’s the second record crop in as many years.

“The 53.1-million-bushel number that is now out there would top last year's, which was a record at the time of 53 million bushels,” said Scott Gerlt, the chief economist for the American Soybean Association, adding that demand for the huge crop, most of which has been harvested, is driven by policy, both in trade and in renewable fuels.

Soybean combining in South Dakota is 89 percent complete, as of Sunday, October 25^th, according to USDA’s October 26^th Crop Progress report. The report shows that North and South Dakota are about neck and neck in getting soybeans out of the field. That compares with 79 percent completion of soybean cutting in the top 18 producing states. Minnesota farmers are 93 percent finished, while Iowa’s soybean harvest is 78 percent complete. Nebraska is three-quarters of the way to the soybean harvest finish line.

When it comes to finding a home for that record crop, in a webinar conducted by the Northern Crops Institute, based at North Dakota State University in Fargo, Gerlt brought up trade issues with China, historically the biggest buyer of U.S. soybeans. It appears China will buy its agreed-on volume of 25 million metric tons of U.S. soybeans this marketing year, according to Gerlt.

“So, it was not put on the list of reduced tariff items, but the purchase commitments still stand, which are really the driving factor for Chinese purchases of U.S. soy,” Gerlt said during the webinar. “At this point, China appears to be following through with those purchase commitments. Trade situations can change. You know, there's no guarantee that things couldn't change here, but as of now, everything appears on track.”

Soybean processors are generally doing well, according to data cited by Gerlt. That means that crushing plants are making money on the components produced from soybeans, including soybean meal and soybean oil. That scenario has boosted soybean crush production.

“It's renewable diesel,” stated Gerlt, as a contributing reason behind demand growth resulting from biobased fuels. “Historically, biodiesel was the biofuel most produced from soybean oil. It's produced in standalone plants. Renewable diesel is also produced from soybean oil and other fats but uses an entirely different process. You cannot easily convert a biodiesel plant to a renewable diesel plant. Renewable diesel plants tend to be converted from petroleum refineries. And in fact, if you look at who owns most of the renewable diesel plants, it is the petroleum companies.”

Those energy providers have expanded production of renewable diesel fuel, according to Gerlt. That is contributing to demand and providing incentives for crushers to increase production.

“It's really taken off from, you know, a billion gallons a year capacity in 2021 to five billion gallons of capacity currently in the renewable diesel market,” he said. “So, it's all occurred during a very short amount of time.”