World market access essential to moving soybeans in this era 

By Brian Warpup, Chair, ISA Membership & Policy Committee 

Stagnant soybean prices, moderate to lower corn prices: The spring and summer months have been very uneventful this marketing year. The question is, will there be anything to move prices going forward into harvest, or is this simply where we will be for the remainder of the growing season? 

World market access is the key to moving this market. The tariffs enacted earlier this year and then paused to pursue foreign trade deals have not come to fruition as the summer has come and gone. 

Negotiations with foreign counties have progressed but seem to stall before long-term deals are reached. We are currently running at $28 billion below what we were trading in 2018 and 70 percent of that are soybean sales. 

If trade deals are not enacted, then market facility programs will need to fill in the gaps. This is a great safety net, but farmers do not want to be reliant on programs provided by the government in the long term. 

We have relationships with around 20 countries that are well established, and a comprehensive trade agreement will give the American farmer protection of selling our products without a penalty to ensure that commodities are traded freely moving forward. 

The next step in these next few months is passing a new farm bill that would be current and up to date with new standards in agriculture. The passing and signing of the “Big Beautiful Bill” on July 4 helped take a step in the right direction. The bill is very friendly to farmers and helps bridge that gap that has not been present in the last few years because of the old farm bill. 

Items within the bill

• Cuts in food assistance by $186 billion but increased farm support by $62 billion. 

• Increases support levels for PLC, ARC, commodity market loans, along with payment limitations. 

• Reference price changes for grain sorghum, soybeans and wheat move from $4.51 to $4.67, from $9.66 to $11.50, and from $5.56 to $6.36 per bushel. 

• ARC increase guarantee goes from 86-90 percent of the benchmark revenue and the protection band increases from 10-12 percent of the benchmark revenue. 
  

Producers will also benefit from increased crop insurance program support in the legislation. Federal premium support levels increase from 3 to 5 percentage points. As a result, the federal subsidy for buy-up coverage changes from the current 38 percent to 64 percent of total premium to 41 percent to 69 percent of total premium based on buy-up coverage level. 

These actions have helped the transition of a new farm bill be a little easier moving into the fall. Some of these items needing reviewed and changed are promoting practices for soil health by funding efforts such as the Environmental Quality Incentives Program. 

Others include environmental easements for farmers and ranchers who choose to permanently protect their land and forests from commercial development, home grown energy production, and water quality improvements opportunities. 

Though prices are depressing, it is important to know that key people in legislature are actively trying to protect our interests within the negotiation process. Until then, there are several opportunities that can be invested to help supplement those losses that have occurred in the last several months. 

Click here to find out more.