U.S. Soybean Farmers Feel the Strain Without China

Producers of almost every farm commodity are struggling to stay in the black. Soybean farmers, normally quite dependent on foreign markets, especially China, have for some time been feeling pinched because of that immense customer backing away from purchasing U.S. soybeans. Tregg Cronin, a farmer and market analyst from Gettysburg, South Dakota, says China’s absence from the U.S. soybean export customer list makes for “a very tense situation.”

“When you have the world's number one leading soybean importer not buy a single pound of soybeans from the United States,” said Cronin, from his family’s Gettysburg farm, “it's obviously had a gigantic impact.”

All the nation’s soybean growers are feeling that impact, but Great Plains soybean farmers who deliver their crop to elevators for a westward rail journey have to be asking themselves what’s next.

“Over the last 15 to 20 years, the upper Midwest, specifically North and South Dakota [and] Minnesota, have geared everything towards delivering soybeans to the Pacific Northwest that would in turn get shipped to China and the Pacific Rim countries,” Cronin explained. “And when that market dries up, you've got a ton of infrastructure, shuttle loaders, elevators that are geared up for one thing. And when you remove that one thing, you've got an abundance of soybeans looking for a home.”

Cronin, whose market insights are popular among farm audiences, is quick to point out the blessing of recently added crush capacity for domestic uses. Cronin points out, however, that the new crush capacity cannot handle the volume needed to replace what suddenly has to go a different direction.

“You've got some of the weakest basis levels in the upper Midwest and really across the Midwest in years and years and years, and combined with range-bound-to-lower futures prices is just resulting in some very weak cash prices paid to the farmer.”

Acknowledging that soybean growers are doing their best to make ends meet during this extended period of market weakness, Cronin has some ideas for dealing with it. There is no one-size-fits-all solution, according to Cronin, but looking beyond an end to the historically long government shutdown, he brings up the possibility of federal farm assistance.

“If you get any relief from the government towards the soybean market, I think you need to treat it as a bonus, not as a reason to speculate,” he said. “I think you bank that relief, you sell soybeans, you make the best of a poor situation, and you start trying to shore up ‘26 already because again, I don't think that ‘25 is going to be the end of this story.”

It's a challenge to generalize the best course of action for working through low prices, but lacking that definitive path to follow, Cronin has suggestions for farmers who can outlast the market.

“I think there are several small strategies that farmers need to kind of utilize, and one is we do have a carry in the soybean market, so the market is paying you to store your soybeans,” he said. “So, if you are fortunate enough to have on-farm storage, the market is paying you. So, I would lock in soybean carries; try to extract as much value from storing your soybeans as you possibly can.”

An adage that adequately applies to Cronin’s advice is “strike while the iron is hot.” He advises acting on near-term marketing opportunities while keeping a clear eye on the not-too-distant future.

“I think the faster…and whatever tools a farmer can use to make the best of ‘25 and put it to bed and start focusing on ‘26, the better off they're going to be,” said Cronin. “And if there are opportunities to lock in a profit, lock in a margin with ‘26, I'm going to be jumping all over those because again, I just don't think that this thing is over with by a long shot.”

Farmers want to produce for the market, but with obvious lapses in foreign demand mixed with swelling production costs, most would gladly reach for a government-sponsored life preserver. Federal farm financial assistance is certainly not a foregone conclusion, said Cronin.

“The short answer is we don't know. I think that the administration seems pretty intent on making sure that growers do get some relief,” said Cronin, referring to the possibility of government help to get through the financial stress of low markets. “Obviously every grower would just as soon have our exports back as opposed to – I hate the word bailout or any of those terms associated with aid to farmers – but every grower would just as soon have a viable market to deliver soybeans into as opposed to getting any kind of short-term assistance to bridge the gap.”

Even if such help comes to fruition, the federal government shutdown notwithstanding, there are unintended consequences of a hand-up from Uncle Sam, according to Cronin. Farmers, he says, are not the only ones paying attention to this potential government relief.

“Every input supplier, every equipment dealer, everything that the farmer touches in terms of production sees that the farmer is going to get additional funds to help shore himself up,” he said, adding, “There will be no relief in fertilizer prices. There will be no relief in chemical [and] seed prices. There will be no additional write-downs in equipment prices, all of which should happen because when farm finances are tight, it would stand to reason that finances of those that supply the farmer would also contract, and prices would see somewhat of a contraction or a correction. But it's very unlikely that'll happen, and in fact, it'll probably get made worse as everybody tries to get a piece of that relief.”

There are additional reasons Cronin cites for government assistance being less than a panacea.

“I think it could make it worse on two fronts, both from a cost of production standpoint, but then also the market not being able to give that price signal so that farmers respond accordingly and plant something else or make the decisions necessary to correct the supply imbalance,” said Cronin, pointing out the obvious need for a long-term remedy to the market. “So as much as short-term funding probably would feel good, it could end up making the situation worse in ‘26 and forward if we don't have something fixed on the demand side.”