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Indiana Expects to Set a Soybean Crop Record. That's Not Entirely Good News.

Oversupply, trade wars drive prices down

(INDIANAPOLIS) - The Department of Agriculture expects a record soybean crop in Indiana this year and a near-record corn crop. But that's not expected to translate to big profits.

Purdue economist Chris Hurt says farmers were expecting soybean prices around 10 dollars a bushel, a price that would let them cash in millions of unsold bushels from last year. That prediction looked good in June, but two things have driven the price down 16-percent since then. One is the record production. Hurt says a mild winter and a near-perfect blend of rain and warm weather has led to early planting, early maturity and high yields. Coupled with the glut of soybeans from last year, that's led to too much supply to sustain higher prices.

And Hurt says the Trump administration's tit-for-tat war of tariffs  with China has driven prices down further, by shriveling one of the largest markets for soybeans. Hurt says the trade war has hurt corn growers less because China buys a lot more soybeans than corn, but corn prices are down nine-percent. And hog prices are off 30-percent -- Hurt notes both China and Mexico, which is also embroiled in a trade war with the U-S, are major customers for Indiana pork.

The USDA released the crop report at a forum with Purdue ag experts at the State Fair.

(Photo: valio84sl/Thinkstock)

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