Demand rather than soybean loan ratio is the reason for the increase of soybean area

Introduction: This article was written by Barthes, a Nebraska farmer and President of the American Soybean Association In an article of the American agricultural network on January 14, he wrote that the increase of soybean loan rate through the agricultural Freedom Act in 1996 was the main factor of the increase of soybean planting area in the United States Although the soybean planting area has increased since 1996, I think that it is very one-sided to attribute the increase of soybean area to the relative increase of soybean loan rate, ignoring other important reasons for the increase of soybean area in recent years With the end of the holiday, Congress will be back in business A new agriculture bill will be passed in a few weeks, and the problem of soybean loan rate will surely attract more attention Therefore, the American Soybean Association hopes to explain more clearly the reasons for the increase of soybean area in recent years and the importance of maintaining the current level of soybean loan ratio Planting flexibility, agricultural economics and scientific research are the main reasons for the increase of soybean area Soybean acreage has indeed increased in the past 10 years, with an increase of about 12 million acres since 1995, according to USDA data But if we study these data carefully, we will find that about 10 million acres of them increased between 1995 and 1997 In those years, the market price was higher than the loan rate Specifically, the average price of soybeans in 1995 was $7.35 per bushel, down to $6.45 per bushel in 1996 and $5.35 per bushel in 1997 Therefore, since 1995, 85% of the increase in soybean area occurred when the market price was higher than the loan rate, and the loan rate of soybean had no effect on the increase of soybean area by farmers Why does soybean area increase after 1995? Previous agricultural policies lacked planting flexibility and discouraged farmers from planting soybeans In order to benefit from federal government agricultural projects, farmers preferred to plant corn, wheat, barley, cotton and rice The 1996 agriculture act changed that, allowing for real flexibility in farming Since then, farmers in corn and soybean planting areas began to plant 50% of corn and soybean, which is more conducive to the sustainable cultivation of land Last year, for example, Illinois had 10.7 million acres of soybeans, 10.9 million acres of corn, Iowa 11 million, Iowa 11.7 million, Indiana 5.6 million, and corn 5.9 million It is also mentioned that the areas with the largest increase in soybean area are only some states in the north and West, which rarely planted soybeans 10 years ago The increase in soybean area in these States is due to the development of new soybean varieties, which are more adaptable to the climate of these two states In addition, wheat spotting and other diseases forced farmers in North Dakota to switch from wheat to soybeans Lack of credit has also prompted farmers to abandon other crops for soybeans In 1999, 2000 and 2001, commodity prices fell in general, and the government reduced production loans to farmers Because of the small amount of loans, some farmers choose to grow many kinds of soybeans, because the cost of planting soybeans is lower than that of corn and cotton According to USDA's latest forecast, the cost of soybeans per acre is $78, compared with $164 for corn per acre The demand for soybeans in the world grain market is higher than that for other commodities Another reason for the increase of soybean area is the substantial increase of demand for soybean in domestic and foreign markets In fact, from 1990 / 91 to 1999 / 00, the world soybean consumption increased by 56%, compared with corn consumption by 27%, rice by 15%, cotton by 7.5% and wheat by 6.2% The consumption of soybean, rice, corn, cotton and wheat increased by 36%, 27%, 26%, 16% and 5% respectively Like other industries, if you want to develop, you have to make the right business decisions Based on these data, it is not surprising that the soybean area has increased in recent years According to the forecast report of USDA in January 2002, in 2001 / 02 market year, the comparison rate of soybean stock and consumption is slightly lower than 10%, compared with that of corn, rice, wheat and cotton, the comparison rate is nearly 16%, 20%, 30% and 50%, respectively A reduction in the soybean loan rate could result in an increase in the acreage of other crops, which are already oversupplied The world market demand for these crops is not as large as the demand for soybeans Let's expand the demand together, not reduce the income of farmers, which is the security guarantee The price of soybean has dropped to the lowest point in the past 30 years The devaluation of South American currency has also artificially promoted farmers there to increase soybean area For soybean growers, 2002 will be another arduous journey Lowering the soybean lending rate would send the wrong message to us soybean growers and our competitors in an inappropriate way The agricultural policies formulated by the Congress and the government of the United States should be to increase the demand for soybeans by expanding trade, promoting exports, increasing food subsidies, increasing the consumption of biofuels, and reforming unilateral trade sanctions policies that harm the interests of American farmers, so as to make the price of soybeans higher than the loan rate The American Soybean Association expects to do so with Congress and the government (compiled by Li Lei studio) (author:) shared on feed Weibo to: