American soybean producers are readying for the harvest season. But so far, China, the biggest buyer of U.S. soybeans, hasn’t placed a single order for the upcoming market year. The absence has sent farmers scrambling to determine what to do with their crops.
It’s a problem that’s been simmering since 2018, the last time China was embroiled in a trade war with the U.S. Mike Langseth, a farmer in North Dakota, remembers that year all too well.
“It was hard to pencil in a profit,” he said. “It was hard to see how we were going to be able to continue operating because you look at the numbers, and it was a loss, and it was going to be one until China came back to buying at least some soybeans.”
At that time, China slowly began to turn to Brazil for its soybean fix.
But now, China has detached itself entirely from the U.S. market, said Chad Hart, an agriculture economist at Iowa State University. He said this comes at a terrible time.
“To have them on the sidelines right now is a major problem, especially because prices were already fairly low and the cost of raising soybeans are fairly high right now,” Hart said. “So profit margins were already probably in negative territory. And so this just adds to the financial issues that farmers are facing as they get ready to go into harvest.”
China buys over half of all exported American soybeans. No other country could come close to filling the gap.
“Given that China is no longer in the marketplace, it's likely that we will see producers shift to other crops to look for better economic opportunities in those other crops than soybeans is providing right now,” Hart said. “So we're going to see a whole lot of different small movements to try to adjust for the loss of one big market.”
In the meantime, for those still working with commodity crops, options are limited.
The storage option
Caylor Rosenau is a farmer from Carrington, North Dakota, and a member of the North Dakota Soybean Growers Association, where farmers have recently been discussing what to do with their beans.
One option is to store them and wait for a buyer, which carries its own set of issues.
“I've talked to many neighbors now,” Rosenau said. “And they've said, ‘you know, if our bins get filled up with [soy]beans and corn, we can't store both of them.’”
Farmers only have so much space to store their grains, and with corn harvests happening after soybeans, producers may have to choose which crop to keep.
“If all of our farmers in the area store their soybeans, what that's really going to affect is corn, the next crop that we won't have any storage for,” Rosenau said.
On top of that, if farmers stored soybeans until spring, they’d have to compete with Brazilian producers who export in February. American soybeans would already be months old at this point, while Brazilian beans would be fresh out of the field.
“This is truly our time of year as North American producers to be marketing and selling these soybeans,” Rosenau said.
To avoid this scenario, Rosenau says farmers in his area have turned to domestic soybean processors.
Crushers and seeds
Since the trade war in 2018, private companies have invested more in domestic crush plants. The facilities purchase soybeans from farmers, process them into oil and meal, and then sell them directly to other countries.
U.S. crushing capacity grew by 14% since 2023, according to the American Soybean Association, due to new plants being built across the country. North Dakota opened two crushers just last year.
“When both crush plants got online, we instantly saw a better basis, better price for our soybeans out of these crush plants,” Rosenau said.
But farmer Mike Langseth says that option only goes so far. Eventually, those markets will max out.
“Even if you build the crushers, they've got to have a plan for what they're going to do with the products when they get done,” Langseth said. “They've still got to find a home for the soybean meal, the soybean oil that they're producing.”
To keep earning, Langseth switched from growing soybeans as a commodity crop to the seed market five years ago and struck a deal with a major soybean seed retailer.
“The premium paid well, even in those sorts of medium years where it was decent prices for soybeans,” Langseth said. “Having that extra, say, dollar a bushel, was nice. It made it easier to make upgrades around the farm, do that sort of thing.”
He had a guaranteed buyer this time and storage already established.
“I was just insulated from the impact as China quietly didn't buy any soybeans from the U.S,” Langseth said.
He said perhaps there’s another way for producers to persevere if other countries purchase from the U.S.
“The beans are going to move,” Langseth said. “It's just going to move less efficiently.”
However, at the end of the day, he said increasing grain storage and expanding crush capacity are all just temporary solutions. Rosenau concurs.
“It's a great band-aid,” Rosenau said. “But it's still not fixing the main problem that we still need half of our beans to be exported out of North Dakota.”
Tadeo Ruiz Sandoval first reported this story for Minnesota Public Radio. This version was produced in partnership with Harvest Public Media, a collaboration of public media newsrooms in the Midwest and Great Plains. It reports on food systems, agriculture and rural issues.