GMOs and Food

What will farmers face in 2018?

First Posted: 7:24 pm - February 21st, 2018 - Views

By Gary Brock - gbrock@aimmediamidwest.com

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XENIA — In answer to the question left hanging in my January column — obviously I am still here. At least for now.

Last month, December actually, I resigned from AIM Media. I was general manager and editor at The Madison Press, as well as your Rural Life Today editor. After I gave notice that I was retiring, the company asked me to stay on for the next few months to help train the reporter I hired part-time in November, Amanda Rockhold.

I agreed, so I will remain on — probably through June.

The 2018 forecasts and markets

In January I attended the first of the 2018 Ag Forecast meetings sponsored by The Ohio State University. At the meeting were who I consider “the big three” in Ohio agriculture: Dr. Ian Sheldon of Ohio State Extension, Ohio State grain expert Barry Ward and former Ohio State professor of agriculture economics Matt Roberts. All three speaking at the Circleville meeting.

That alone was a big draw, with nearly a hundred central Ohio farmers in attendance, as well as representatives of Pickaway County Extension, the Ohio Farm Bureau and others.

Once again, there was plenty of talk about the 2018 Farm Bill, grain prices, land rental prices and of course — China.

In fact, China was clearly front and center among the economic points made by the speakers and farmers in the audience.

It was pointed out that China was the number one importer of U.S. agriculture products, followed by Canada and Mexico. And as goes Chinese purchases, so too goes the health of Ohio and American farmers.

One point made by agriculture economist Roberts that I agree with is that the Chinese are savvy when it comes to opportune grain contracts. Roberts believes that China will buy less American (and Ohio primarily) soybeans in 2018 with stiff competition from Eastern Europe and South America.

For now, he thinks the Chinese will buy more from these countries and less than in the past from us. Maybe.

He also pointed out that this should turn around by this summer and the U.S. will start seeing more soybean contracts from the People’s Republic.

But unlike Roberts, I think this turnaround will result in actually boosting our soybean sales over the more than 1.2 billion bushels to China, estimated over each of the last two years.

But two years ago I traveled to China to see for myself how the Chinese used American and Ohio soybeans – mostly in their production of fish meal for their billions of fish raised in aquaculture facilities near Shanghai.

One comment that stuck with me was from one of the facility’s managers, who talked about the constant need for a supply of millions of bushels of soybeans to feed the hungry fish that feeds China. He said that while South American soybeans can be bought cheaper, it is the quality of the American-grown soybeans that they prefer.

They seek it out. And I suspect that will continue unless trade negotiations get to the point of tariffs and worse, an embargo. I don’t think those things are going to happen, so I am optimistic about 2018 being a great year for soybean growers.

Corn, profits and what will be planted

It looks as though 2018 will see an acceleration of the shift from corn to soybeans.

Roberts predicted that soybean acres will exceed corn acres by about 95 million acres for soybeans to 85 million acres for corn – a turnaround from just a few years ago.

Roberts also pointed out that making money with corn is going to be tough the next few years. Supply or “overhang” remains high compared to demand – there is hope.

He identified that ethanol production continues to rise. The Marion ethanol plant recently announced it is doubling its size and a new plant in Greenfield just opened.

And once again China is part of the discussion. Roberts pointed out that China is considering efforts to improve its air quality, and to do so it must lower its auto emissions – something we in the United Stated started working on years ago. And what is needed to help drop these emissions in a country where the auto industry is booming?

You guessed it – ethanol. And while Roberts predicted that China will likely produce its own ethanol, it will need corn and lots of it to produce this ethanol – far more corn than it can grow itself and a lot more than it is importing now.

So it is possible that corn exports to China may go the way of soybean exports there. That’s great news for the American corn grower.

We can only wait and see what happens with this possibility. And suspect it will be sooner than later.

By Gary Brock


Rural Life Today