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Welcome to a special midweek message from the North Dakota Democratic-NPL Insider, a newsletter that features regular updates about upcoming Dem-NPL events, legislative happenings, and news that affects North Dakotans!
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North Dakota soybean farmers approach harvest with virtually no markets
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Christie Jaeger farms near Esmond and serves as the District 14 Democratic-NPL Chair. Last week, she received a letter from her co-op saying, “Each season brings its own challenges, and we work together to address them head-on. This harvest is no exception, with soybeans presenting the greatest concern. At present, selling a soybean train is nearly impossible, and with the export market essentially at a standstill, we do not know when trading conditions will improve. China is currently sourcing soybeans from South America, and with tariffs in place, it is unclear when they will turn their attention back to U.S.soybeans.”
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We asked Christie to share what's happening in the soybean markets right now, and help people understand what's really happening to North Dakota farmers.
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"At present, selling a soybean train is nearly impossible, and with the export market essentially at a standstill, we do not know when trading conditions will improve"
Over the last 20 years or so soybeans became a prominent crop in ND. Farmers became very good at growing them, the seed genetics have improved, the chemicals are better (we can till our soil less and spray less), they fix nitrogen and put it back into our soil. Commodity groups worked hard to open the soybean market to China. China was growing its middle class and eating more protein. They import the soybeans whole and crush them in China, and the soymeal is fed to chickens and poultry. It was a great example of international trade, and how it can benefit both countries! It gave a more steady income to family farms.
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North Dakota is always hit the hardest in trade wars because of our geography. Grain has to either be shipped by rail to the Pacific Northwest (PNW) and put on ships or to Minneapolis and down the Mississippi where it is shipped. Normally, 80% of ND soybeans are shipped out the Pacific Northwest and that is currently at zero. Back in Trump 1.0 tariffs with China, they lowered how much they purchased as well, and then Trump did get a deal with them. They were supposed to increase their purchases in 3 different phases. They did the first phase, and I think part of the second. And, then just quit the deal, and dramatically decreased what they purchased from the US. They are investing in infrastructure in Brazil and just kept increasing what they purchase from them. To be fair, part of this is because Brazil and Argentina have become very good at soy as well, and it is also fair to say farmers may need to start trying some new crops, but that is not a fast, easy process. Also, soy was starting to be more in demand for renewable diesel and renewable jet fuel, but I don't think that demand is very high yet, and of course, the federal incentives aren't much for that either. We simply grow so much more than we can use.
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In all these years of soybeans in ND, we have never received a letter like that from our local co-op that they may not be able to take soybeans. What really caught my attention was the line "At present, selling a soybean train is nearly impossible, and with the export market essentially at a standstill, we do not know when trading conditions will improve"
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Essentially, what that means is local elevators, co-ops buy soybeans from farmers and then they have to have a market to sell it to. They order a train so that when they have enough to fill a train, it heads to the PNW. They are telling us they may not be able to take soybeans as they have no market for it. I think there is hope that in the next few weeks before harvest something may happen so they can at least take soybeans that were contracted. I am not sure if many farmers did contract soybeans as the price has stunk since last harvest. Our farm does have enough storage for our beans, so we will do that. We normally may sell 1/3 or 1/2 at harvest. We are a smaller family farm, some bigger farms may have enough storage as well. It will be very interesting to see what farmers do. In the short term, storing the grain isn't the end of the world (well unless your grain bins were destroyed by the storms in ND this summer), the problem is how long can you float without that income.
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What people don't realize is that most farms use an operating loan. I would dare guess the smallest size use even $500,000. That means banks and farm credits are carrying farmers until they sell their grain. Many may be able to restructure or hang on for a bit. Every farm is so different. It may mean that a farmer can't pay his bill in full to all the agribusiness companies they do business with, many that are in small communities all across the state. Most farmers do big business with their local co-op or elevator as that is where they bought their seed and chemical and fertilizer. Now they may not be paying them in full either. So now the co-ops can't take soybeans in to make a profit and they may be carrying debt that is owed to them as well. The local co-ops are a big employer in many communities so that could quickly trickle down as well.
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THAT is all in a nutshell why this kind of freaked me out. And so sure there are a couple crush facilities in ND now, but that is just a drop in the bucket for the soybeans we produce in our state. Perhaps there will be some small markets that come along, but without China, I just don't know who is going to buy all these soybeans. In addition, we have record fertilizer prices (tariffs) and parts and equipment prices (some due to tariffs).
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My 25 year old son and his wife farm with us, and it just really stinks—as we are slowly working on transition—to worry about how they can continue this lifestyle and business they too love so much.
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The Century Club supports our year-round work to build party infrastructure supporting candidate recruitment, local district and regional leadership, issue-based education, and tools for Dem-NPL success.
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Help us elect great Democrats up and down the ballot!
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The North Dakota Democratic-NPL is launching a new grassroots program called “Neighbor to Neighbor” where volunteers will connect with voters in your community to elect Democrats up and down the ballot. As a volunteer, you will be responsible for connecting with voters in 25 homes in your neighborhood or friends and family to help elect Democrats up and down the ballot about 3-4 times this year.
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Grassroots organizers are the lifeblood of the Dem-NPL! Sign up to volunteer with the Dem-NPL!
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