China has ended its boycott of US soybeans, but Delaware farmers still face low prices. Delmarva Public Media's Don Rush talks with Maggie Reynolds, reporter for Spotlight Delaware covering southern part of the state, about the impact of an uncertain market.
RUSH: The great Chinese soybean boycott is over. This is Don Rush. The US Treasury Secretary has announced that Beijing has agreed to purchase 25 million metric tons of American soybeans annually. In addition, China said it would begin by purchasing 12 million metric tons between now and January. For soybean farmers in Delaware, this is good news, although they see themselves as somewhat insulated due to the local poultry industry. We turn to Maggie Reynolds, reporter for Spotlight Delaware, who covers the rural communities in the southern part of the state. We talked before the announcement.
REYNOLDS: So I mean exports have been dropping dramatically because of the loss of the market to China and also the price of soybeans has dropped substantially this year. It's about $10 or a little bit under $10 compared to about $14 two years ago. And so just generally a big decrease in opportunities in the city market.
RUSH: So has the Chinese boycott actually had an impact on Delaware farmers?
REYNOLDS: It has mainly in terms of the fact that the price has dropped, but Delaware is a more unique market for soybean farmers than some other places like in the Midwest because there's a poultry industry on the Delmarva Peninsula. So Delaware soybean farmers are able to sell most of their soybeans within Delaware, its just that they don't have as high of a profit margin with the price being lower.
RUSH: One of the farmers you talked to seemed to indicate that he wasn't worried because they thought anyway, that was just simply a surplus of soybean production.
REYNOLDS: I mean, I think the idea that there's a surplus of soybeans this farmer said was because they were Ukraine, other countries saw an opportunity to step into the soybean market, and so then there started being more production of soybeans and that dropped the price. And so that surplus can explain why the price is lower now.
RUSH: So are these farmers then thinking that they're going to be able to weather this?
REYNOLDS: Yeah, I mean I think they really take it one year at a time because I've got a sense from them that it can vary so much. if weather wipes out a crop or if they kind of made a bad strategic choice with leaning more into a certain crop. So it can be common to have years with breakeven. One farmer, Jim Minner said that he had a period of three or four years where he was really making a profit and then he's had now a couple of consecutive years without a profit. So they just have to be kind of prepared for this sort of thing. And I don't think that they're able to look more than maybe one year ahead just with how quickly things change. So I don't think that any of these farmers are feeling like they could go under.
RUSH: There is the irrigation of some of these fields, which obviously makes some of the soybean more expensive, does that play a role in how farmers are dealing with it? I know on the other hand, there was one farmer you talked about that didn't have and lost some crops in the process.
REYNOLDS:One farmer, I spoke to, Ray Ellis, he has a bigger operation, so he has grain bins and he has irrigation, so that's helpful for him in that he didn't have to worry as much about weather concerns, but like you said, it's more expensive and he has a larger farm, so he's kind of able to weather those costs as well. Whereas another farmer, Dave Marvell doesn't have those and so a lot of his soybean crop was wiped out. So it's kind of, I guess just depends on the size of the farm. It can also be really specific to where in the state [the] farm is located. I know that some farms in Western Kent County had a different weather experience than farms even on the eastern side of Kent County or just a little bit south in Sussex County. So it can really be specific to exactly how much rain is in an area.
RUSH: Maggie Reynolds reporter for Spotlight Delaware who covers rural communities in the southern part of the state. This is Don Rush for Delmarva Public Media.
