EAGAN, Minn. – The effects of the trade war are starting to be felt by farmers as harvest 2018 is in full swing. As growers started looking for places to go with the new crop, they realized grain is coming in much faster than it is going into the market.
“A lot of farmers are trying to find every square inch of storage space that they could use, particularly for soybeans because they're going nowhere,” said Bob Zelenka, executive director of the Minnesota Grain and Feed Association, during a recent phone interview. “It's an unusual fall.”
In a typical year, rail cars would haul loads of beans to the West Coast headed to export markets and farmers would be more concerned with where to store the corn crop.
This year however, without an active soybean market, the new crop will have to be stored.
“At the elevator level, you are reserving more space than normal for soybeans, particularly your fixed storage, because you do not want to put soybeans in temporary bunker storage or on the ground,” said Zelenka.
With more of the fixed bin storage space going to beans, farmers have had to find new ways to store corn in addition to elevator bunker storage. Some farmers have started using silage bags to store their grain corn.
“You worry about maintaining the quality of grain stored in those bags versus fixed storage where you can monitor the quality and you can use aeration fans when necessary,” he said.
Many of the bunkers at the elevators are on hard surfaces with sidewalls and have aeration available when needed to keep the grain cool and dry.
While the bags do not allow for aeration, quality can be maintained as long as the grain was cool and dry going into the bag. Winter will help greatly in maintaining quality as freezing temperatures will prevent any mold or insect growth.
Moisture has been more of a challenge this year, especially with the early October rains.
“There were some higher moisture soybeans in some areas which would require, in some cases, putting the beans through a grain dryer, which is unusual,” he said.
Soybeans going through a grain dryer has a higher risk factor than corn. Beans often come out of the field dirtier than corn with pods being mixed in the grain. Soybeans also have an oil factor that corn does not. The combination of pods, excess dry matter and oil creates a fire risk inside a grain dryer.
“In some areas of the state, the beans are coming in fairly dry, so no drying was necessary,” he said. “Going right into the bin and using aeriation, you can bring them down a couple of points easily.”
The big unknown around this year’s soybean crop is how long will it be in storage.
For years, China has been one of the main global buyers of U.S. soybeans. It took many years to develop and grow that market, but the trade war started earlier this year may put an end to it.
“China has been pretty active recently in trying to move beyond dependency on Minnesota or U.S. soybeans,” said Zelenka. “For example, cutting back on the amount of protein they put in their feed, looking at using the substitutes like canola meal and then recently lifting an embargo to allow sourcing of canola meal from India.”
If the tariffs are ever lifted, it is unlikely the U.S. will enjoy the same amount of market share it once did with China.
“Certainly, once those tariffs are taken off, you are looking at two to three months before you get the logistics back in place to line everything up for efficient movement of grain back into those markets,” he said.