Matt Bennett Soybean Summit

Matt Bennett, a farmer and market analyst with Channel Seed, talked to farmers at the Illinois Soybean Summit March 10 about the impact the coronavirus is having and other market trends.

SPRINGFIELD, Ill. — Although about 400 people attending the 2020 Soybean Summit March 10 here didn’t fear coronavirus so much they stayed home, the virus was certainly a topic of discussion among the speakers and famers attending the Illinois Soybean Association event.

Roseville, Illinois, soybean grower Ron Moore said the disease COVID-19 is something farmers have no control over.

“You have to focus on what you do control,” he said, adding farmers must also be aware of the possible impact of the situation.

In a panel discussion, Moore did say he saw the virus as a top challenge this year. Other farmers and crop advisers included marketing, herbicides and profitability as top challenges this year.

The meeting was held the day before President Donald Trump suspended travel from Europe, before national sporting teams canceled or postponed seasons and before large events were canceled and many schools announced closures.

“The coronavirus is a challenge,” said Matt Bennett, a Shelby County, Illinois, farmer and grain analyst who was traveling by plane the next day and was uncertain about it.

“More than 100 countries have some level of coronavirus outbreak,” said Sara Wyant, Agri-Pulse Communications editor. “Coronavirus is bad — it’s scary.”

Trade talk

Wyant talked about the virus in context of its impact on trade. Among the top five issues soybean growers should consider this year, she said trade was No. 1 on her list. Until the coronavirus, many people were feeling better about trade this year than last year, she said.

Businesses gave a collective sigh of relief when phase one of the U.S.-China deal was agreed upon. The United States-Mexico-Canada Agreement is official after the Canadian Parliament approved it March 13. And agreements with Japan are positive. Now traders are waiting to see if China can deliver on its promises made in that pact, she said.

While China has garnered most headlines recently, there is still a lot or market potential for the U.S. worldwide, Wyant said. For example, today the U.S. has only 6% of market share in India, 19% in China and 25% in Japan.

“We have room to grow,” she said.

Wyant said she expects there will be some stimulus coming to farmers in the election year as the U.S. tries to get the economy back on track. That could include a third round of the Market Facilitation Program. She noted Illinois received the second highest amount of MFP payments in 2019.

The other four items Wyant sees as the top issues for soybean farmers this year are freedom to operate, sustainability, workforce and the rural voice being diluted. She noted that with the country’s population shift, Illinois will lose a congressional seat with the next alignment, giving the state less clout nationally.

Market strategies

Matt Bennett, a Windsor, Illinois, farmer and a grain analyst, said he is worried about farm incomes this year.

“Thank God I have an off-farm income,” he said. He got chuckles and head nods from those attending his “Maximizing Profit in Challenging Markets” workshop.

At this time it is essential to know one’s family living expenses as well as farm and crop input costs. Knowing those costs will help farmers know their breakeven and plan marketing better, Bennett said.

He said once farmers know their breakeven, they need to start contracting when their target prices come up. Last year he started at $4.07/bu. for corn and sold some corn at $4.18, $4.39, $4.59 and $4.72. The former grain elevator operator spread his risk.

A farmer with a breakeven at $3.50 might start selling some corn at $3.75 as a beginning safety net and sell more to take advantage of any price increases.

“Keep tabs. If there’s a rally, get on it,” he said, encouraging farmers to manage risk.

Bennett said $3 corn and $7 beans could happen in 2021.

“What’s your plan?” he asked.

Phyllis Coulter is Northern Illinois field editor, writing for Illinois Farmer Today, Iowa Farmer Today and Missouri Farmer Today.