Farmers from across the country anxiously awaited Ag Secretary Sonny Perdue’s detailed aid package earlier this week. For South Dakota Soybean Association (SDSA) the announcement was met with appreciation, yet caution. The $1.65 per bushel payment outlined for 50 percent of soybean production was by far the highest payment for any commodity. Now, South Dakota soybean leaders, Brandon Wipf and Jerry Schmitz are focused on what comes next.
“This was a good first step,” says Wipf, a soybean grower from Huron and director for the American Soybean Association. “We appreciate the administration recognizing the damage and providing this short-term solution, now we can focus on a long-term resolution.”
That long-term resolution can be summarized in one short word: trade. But for South Dakota soybean growers, the trade needs to come from a market served through the Pacific Northwest and quickly.
Many growers are already experiencing the deterioration of Asian markets through shifts in basis, showing the volatility of soybean market in the Dakotas. In fact, South Dakota soybean farmers’ average basis widened significantly over the past two months, from less than $1 in June to $1.20 mid-August. Now, farmers and others in the ag industry must prepare for uncertainty moving into harvest.
“With South Dakota being on the western edge of the growing region, our soybeans ship to the Pacific Northwest, that is the market that logistically and efficiently works for South Dakota soybeans,” says Jerry Schmitz, soybean grower from Vermillion and President of SDSA. “Right now, there are no soybeans going west and our elevators are weighing their options to sell soybeans elsewhere, adding costs and widening the basis.”
While the ag industry looks for alternative shipping logistics, both Schmitz and Wipf say the time for trade resolution is now. The progress for the U.S. and Mexico is another positive step in the right direction.
“We applaud the work that has been done negotiating with Mexico and hope to see Canada next,” adds Wipf. “Canada is an important market for not only South Dakota soybeans, but South Dakota in general. We’d like to see the sticking points addressed and move forward with yet another important trade partner.”
For now, SDSA wants to see the ball keep rolling on trade.
“We’ve made progress with Mexico and would like to see that momentum move into other trade markets,” adds Schmitz. “South Dakota soybean growers need to know a clearer picture of their markets as they begin harvesting, as well as planning for 2019. Ultimately, South Dakota soybean growers need the administration to move quickly and for our soybeans to move west.”
More about SDSA
The South Dakota Soybean Association’s (SDSA) mission statement is to grow market opportunities and value for South Dakota soybean farmers through public policy and education. Because checkoff funds cannot be using for legislative activities, SDSA is the member-organization that represents soybean farmers on legislative policy issues. To learn more, visit www.sdsoybean.org
This post is brought to you by the South Dakota Soybean Association.