July brought good news for grain farmers. Thanks to a massive purchase by China, soybean futures climbed. We also saw markets open and a unique situation happen in the fields. Most of our farms got basically half of the rainfall we usually get by this time of year.
You’d think that would cause droughts and a smaller crop for harvest. However, the rain we did get mainly came in May and June, exactly when our grain needed it. As a result, we’re seeing large crops across the country.
According to the latest statistics released July 10 by the U.S. Department of Agriculture, soybean production in America is expected to hit 4.14 billion bushels by the end of this growing season. That’s significantly up from the numbers predicted in March, April, May and June.
So, we have more grain than expected either being harvested now or on the way.
While Tri-State can help store that crop, I realize you’d prefer to sell it. That’s where grain farmers are running into problems. They’re not sure if selling it locally is the best option or if they should look overseas. They also want to know what countries are actually accepting U.S, grain right now and what requirements there are. Well, before you make a decision, let’s take a look at your choices.
Grain Farmers Examine the Market
There are two rules of thumb I’ve always been taught. The first is sell your grain before harvest season for the best price. It’s a simple case of supply and demand. If you sell corn and soybeans when everyone else is bringing their crop to market, buyers benefit.
But if you’re selling in March or April, bringing out the stored grain from last year’s crop, the lack of options means that buyers have to pay higher prices. You also don’t have to go to your local elevator to sell. There are online options, as well as exporters going to other countries.
That leads to the second rule: constantly monitor prices. In each case, prices ebb and flow based on everything from the time of season to specific circumstances. Take China, for example. As of mid-July, local corn prices in Harbin, the country’s top corn-growing province, hit $301.69 per tonne, up 23 percent from the start of the year.
It is significantly cheaper for farmers to buy imported corn from the U.S. and Australia, which is what they’re doing. The same is true for soybeans and hard wheat. According to the U.S. Department of Agriculture, China bought 3.259 million tonnes of corn, 1.298 million tonnes of soybeans and 320,000 tonnes of hard wheat from America during the month of July. That purchase, the largest since 2015, presents opportunity for grain farmers if you take advantage. There’s no guarantee China will be buying this much grain later.
How Do Grain Farmers Export Their Grain?
I know exporting crops can seem overwhelming to grain farmers. You’re dealing with another country, so there are different laws to follow and different procedures for payment. But you don’t have to do it on your own. That’s where operations like the North American Export Grain Association come in.
There are actually quite a few companies to choose from, including the U.S. Grains Council, the U.S. Soybeans Export Council and the National Grain and Feed Association. I’m not here to tell you if one is better than the other. In my experience, each farmer is different. What works for me may not work for you. I’d just suggest checking each of them out to see which is the best fit for you and your farm.
In each case, you fill out their forms, provide information on how much grain you’re shipping and when you want a final price. They’ll take that information and shop around. If China still needs soybeans, they’ll give you the latest price. If Argentina is going through a shortage, that gets included as well. They’ll walk you through financial and credit questions, as well as any concerns over the differences in laws and procedures.
A Big Crop Needs to be Stored
Grain farmers likely won’t be able to sell all of this year’s crop at home or overseas, due to the high yield. With that in mind, are you ready for long-term storage? Do you have all the equipment and most importantly, the space to house that much grain for months, if not longer?
Beyond the space, it’s important to keep the grain in prime condition to sell. As the grain deteriorates, it also loses value. Grain monitoring helps with that. If you invest one cent per bushel, you can monitor 15 percent of your grain. By spending four cents per bushel, you can monitor 100 percent of your grain.
Tri-States Grain Conditioning has experts ready to give you their best advice for your grain storage needs. Just give us a call at 712 336 0199 for questions or quotes.
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