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February 12, 2025
2018 Farm Bill, Recent Videos
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October 31, 2018
Grain Market Outlook
Y 2018/19 are up 88.65% from 116.3 mb or 24.8% over a year earlier. Among the countries that have
tangibly increased U.S. soybean imports from a year ago are some in the European Union (i.e., Germany, Italy,
the Netherlands, Spain, and the United Kingdom), Japan, Taiwan, Iran, South Korea, Saudi Arabia, Egypt,
Argentina, Canada, Mexico, and Peru.
“Unknown #2” – The Size of South American Soybean Production in Early‐Mid 2019: With an opportunity
to sell soybeans to China given their distinct preference for soybeans from non‐U.S. sources, key South
American soybean producing countries such as Argentina and Brazil have reported plans to increase soybean
plantings for their 2019 crops. In Brazil, initial estimates from private sources and the USDA are for a 1.0%
increase in production to 120.4‐120.5 million metric tons (mmt), up from the USDA estimate 119.8 mmt in
2018. Of course weather risks / threats to South American 2019 production will have to be dealt with over the
coming months. However, current intentions are for South American soybean production to increase in 2019
– which if it actually happens would further negative prospects for U.S. soybean prices in “new crop” MY
2018/19 (Figure 14).
Planting of the South American soybean crop has already began – starting in late fall 2018 here in the
United States. This means that U.S. corn and soybean producers will have some amount of information on
2019 South American crop and market prospects when they make crop planting decisions in late winter – early
spring 2019 here in the United States. All else being equal, anticipated 2019 South American acreage trends
may lead U.S. farmers to lower their 2019 U.S. soybean plantings and to raise their 2019 U.S. corn plantings.
2. Other Factors to Consider in Soybean Market Outlook
Prior to the escalation of the U.S.‐China trade dispute, U.S. soybean market prospects where described as
“neutral‐to‐cautiously optimistic” for the “new crop” 2018/19 marketing year. Now with the uncertainty and
potential negative impacts of 25% soybean import tariffs by China against U.S. soybeans, and a record large
2018 U.S. soybean crop being harvested, the “narrative consensus opinion” of the market has turned
pessimistic price‐wise, which has been reflected in “new crop” NOVEMBER 2018 Soybean futures (Figures
15abcd).
NOV 2018 Soybean futures declined from a high of $10.43 ¾ on May 30th down to a low of $8.12 ¼ per
bushel on September 18th (Figure 1). Since then, NOV 2018 Soybean futures have increased to a high of $8.92
on October 15th before declining again to a close of $8.33 ½ on Tuesday, October 30th.
3. Kansas Cash Soybean Prices & Basis Bids
Cash soybean price bids on Tuesday, October 30th in Central Kansas at major terminal elevator locations
were in the range of $7.04 ½ to $7.23 ½ per bushel ($1.29 to $1.10 under NOV 2018 CME soybean futures). At
Topeka and Atchison in Northeast Kansas, cash prices were both at $7.58 ½ per bushel ($0.75 under NOV
2018). These Central and Northeast Kansas prices on October 30th are down substantially from $9.88 ‐ $9.93
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($0.35 to $0.30 under JULY 2018 soybean futures) on May 30th. Cash soybean bids at Kansas soybean
processing plants in Emporia and Wichita on October 30th ranged from $7.63 ½ to $7.68 ½ per bushel ($0.70 to
$0.65 under NOV 2018) – down substantially from May 30th when prices ranged from $9.86 ($0.37 under JULY
2018) to $9.93 ($0.30 under) (Figure 2).
In Western Kansas cash soybean bids at major grain elevators on October 30th ranged from $6.85 to $7.09
per bushel ($1.49 to $1.25 under NOV 2018), down substantially again from $8.88 ($1.35 under JULY 2018
futures) to $9.23 ($1.00 under) on May 30th.
4. Reviewing South American Export Competition in “Old Crop” MY 2017/18
Soybean market signals from South American export competitors Argentina, Brazil and Paraguay have
improved in recent months as a result of the U.S.‐China trade dispute (Figures 13‐14). Serious drought had
caused Argentina soybean production to decline by 31.3% from a USDA estimate of 55.0 million metric tons
(mmt) in 2017 down to 37.8 mmt in 2018, and cut projected Argentine soybean exports by 70.1% to 2.1 mmt
in the “old crop” 2017/18 marketing year (MY) which ended on August 31st. Argentina soybean meal exports
were 19.4% lower (25.25 mmt) in “old crop” MY 2017/18, down from 31.3 mmt in MY 2016/17.
However, Brazilian soybean production was higher – offsetting Argentina’s declines to a degree. Brazil is
estimated by the USDA to have produced a record high 119.8 mmt of soybeans in year 2018, up 4.5% from the
previous record of 114.6 mmt in year 2017. Brazilian soybean exports are estimated to have been 76.2 mmt in
“old crop” MY 2017/18 (ending August 31st), up 20.7% from 63.1 mmt in MY 2016/17. Brazil soybean meal
exports are projected to be 16.8% higher (16.1 mmt) in MY 2017/18, up from 13.8 mmt in MY 2016/17.
Paraguay soybean production is estimated to be down marginally – providing a neutral influence to the
market. Paraguay is projected by the USDA to have produced 9.81 mmt of soybeans in year 2018 – down
moderately from 10.34 mmt in year 2017. Paraguay soybean exports are estimated to have been 6.25 mmt in
“old crop” MY 2017/18 (ending August 31st), up 2.0% from 6.13 mmt in MY 2016/17.
These three South American countries are the main competition in global soybean export markets for the
United States. Argentina, Brazil and Paraguay are forecast to comprise 54.0% (76.3 mmt) of estimated World
soybean exports (147.4 mmt) in “old crop” MY 2017/18. The U.S. is estimated to have made up 37.8% (57.95
mmt) of World soybean exports for MY 2017/18, with other countries making up the remaining 8.2% (13.15
mmt) (Table 3).
The trade dispute between the U.S. and China has “pushed” Chinese soybean export purchases toward
Brazil and Argentina and away from the U.S. at least temporarily until the matter is either settled OR
exportable South American supplies are eventually no longer available in fall 2018. There has been both
negative and positive news coming from these negotiations to date, with any final agreement still to come.
5. U.S. Soybean Supply‐Demand Projections for “New Crop” MY 2018/19
The USDA provided a forecast of U.S. soybean supply, demand, and prices for “new crop” MY 2018/19 In
the October 11th USDA WASDE report. Based on 2018 U.S. soybean production projections 89.145 million
acres (ma) planted, 88.348 ma harvested, and 2018 U.S. soybean average yields of 53.1 bu/ac., the USDA
forecast 2018 U.S. soybean production to be 4.690 bb. This 2018 forecast of a record high 4.690 bb in U.S.
soybean production would be up from the previous record of 4.411 bb in 2017, and the 2nd highest amount of
4.296 bb in 2016 (Table 1, Figures 4‐5‐6).
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Total Supplies of U.S. soybeans in “new crop” MY 2018/19 are forecast to be a record high 5.153 bb, based
on 438 mb in beginning stocks, 4.690 bb in production, and 25 mb in imports. This amount is up from the
previous record highs of 4.734 bb and 4.515 bb in U.S. soybean Total Supplies in “old crop” MY 2017/18 and
MY 2016/17, respectively (Table 1, Figure 6).
Soybean crush in “new crop” MY 2018/19 is forecast to be a new record high of 2.070 bb – to be driven by
expected ongoing domestic usage for livestock feed and ongoing strength in U.S. soybean meal exports (Table
1, Figures 7 & 9ab). This would be up 15 mb in U.S. soybean crush from the previous record of 2.055 bb in “old
crop” MY 2017/18.
Exports of U.S. soybeans in “new crop” MY 2018/19 are forecast to be 2.060 bb – down previous record
highs of 2.129 bb in “old crop” MY 2017/18 and 2.166 bb in MY 2016/17 (Figures 8‐9‐10). See the previous
discussion on U.S. soybean export prospects in section #1 above.
Seed usage of U.S. soybeans is projected to be 103 million bushels (mb) in “new crop” MY 2018/19, with
Residual use forecast at 34 mb. While seed use of 103 mb is forecast to be down slightly from 104 mb in “old
crop” MY 2017/18, residual use of 34 mb is up from 8 mb in “old crop” MY 2017/18 (Table 1, Figures 9ab).
Total Use is projected to be a near‐record high of 4.268 bb – down 28 mb from the previous record high of
4.296 bb last year (Table 1, Figures 9ab).
As a result of these supply and use projections for “new crop” MY 2018/19, ending stocks are projected to
be a record high 885 mb, with percent ending stocks‐to‐use of 20.74% – both up from 438 mb (10.20% S/U) in
“old crop” MY 2017/18 (Table 1, Figures 9ab & 10ab‐11).
United States’ soybean prices for “new crop” MY 2018/19 are projected in the range of $7.35‐$9.85
(midpoint = $8.60 /bu) – with the midpoint projection being down $0.73 /bu from $9.33 /bu in “old crop” MY
2017/18 (Table 1, Figures 10ab‐11). This scenario is given a 60% likelihood of occurring by KSU Extension
Agricultural Economist D. O’Brien.
6. Alternative KSU Soybean Forecast Scenarios for “New Crop” MY 2018/19
Three alternative KSU‐Scenarios to the USDA’s forecast for U.S. soybean supply‐demand and prices are
presented for “new crop” MY 2018/19 (Table 1a, Figure 10). These projections show how varying 2018 U.S.
soybean export‐use and production scenarios could affect U.S. soybean supply‐demand and price outcomes in
“new crop” MY 2018/19. Probability‐weights are added to reflect judgements about how likely each scenario
is to occur in “new crop” MY 2018/19, i.e., during the September 1, 2018 through August 31, 2019 time period.
#1 ‐ KSU “Lower 2018 U.S. Soybean Exports” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions: 89.145 ma planted, 88.348 ma harvested, 53.1 bu/ac yield, 4.690 bb production, 5.153 bb
total supplies, 2.070 bb domestic crush, 1.870 bb exports (down 200 mb from USDA’s forecast), 4.068 bb total use
(down 200 mb from USDA’s forecast), 1.085 bb ending stocks (up 200 mb from USDA’s forecast), 26.67% Stocks/Use (up
from the USDA’s forecast of 20.74%), & $8.40 /bu U.S. soybean average price (down from the USDA’s forecast of $8.60);
#2 ‐ KSU “Higher 2018 U.S. Soybean Exports” Scenario for “new crop” MY 2018/19: (10% probability):
Assumptions: 89.145 ma planted, 88.348 ma harvested, 53.1 bu/ac yield, 4.690 bb production, 5.153 bb
total supplies, 2.070 bb domestic crush, 2.270 bb exports (up 200 mb from USDA’s forecast), 4.468 bb total use
(up 200 mb from USDA’s forecast), 685 mb ending stocks (down 200 mb from USDA’s forecast), 15.33% Stocks/Use
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(down from the USDA’s forecast of 20.74%), & $9.00 /bu U.S. soybean average price (up from the USDA’s forecast of
$8.60);
#3 ‐ KSU “Low 2018 U.S. Soybean Production” Scenario for “new crop” MY 2018/19: (15% probability):
Assumptions: 89.145 ma planted, 88.348 ma harvested, 50.0 bu/ac yield (down from the USDA’s forecast of 53.1
bu/ac), 4.417 bb production (down 273 mb from USDA’s forecast), 4.880 bb total supplies (down 273 mb from USDA’s
forecast), 2.070 bb domestic crush, 2.060 bb exports, 4.268 bb total use, 612 mb ending stocks (down 273 mb
from USDA’s forecast), 14.34% Stocks/Use (down from the USDA’s forecast of 20.74%), & $9.05 /bu U.S. soybean
average price (up from the USDA’s forecast of $8.60).
7. World Soybean Supply‐Demand Prospects
World soybean production of a record high 369.48 million metric tons (mmt) is projected for “new crop”
MY 2018/19, up 9.5% from 337.45 mmt in “old crop” MY 2017/18, and up 6.1% from the current record high of
348.12 mmt in MY 2016/17 (Figure 13). The “new crop” 2018/19 marketing year begins September 1, 2018
and continues through August 31, 2019. World soybean total supplies of 466.13 mmt in “new crop” MY
2018/19 are forecast to be up 7.4% from 434.13 mmt in “old crop” MY 2017/18, and up 8.8% from 428.54
mmt in MY 2016/17.
World soybean exports of a 157.40 mmt are projected for “new crop” MY 2018/19, up 2.8% from 153.12
mmt in “old crop” MY 2017/18, and up 6.8% from 147.36 mmt in MY 2016/17 (Figure 13). China is expected to
continue to be the key World soybean importer in the coming marketing year, although there are signs that
the Chinese are seeking to moderate their annual soybean usage or import increases through changes in
livestock feeding approaches.
Projected World soybean ending stocks of a record high 110.04 mmt (31.17% Stocks/Use) in “new crop”
MY 2018/19 are up from 96.65 mmt (28.70% S/U) in “old crop” MY 2017/18, up from the previous record high
96.68 mmt (29.4% S/U) in MY 2016/17, and 80.42 mmt (25.62% S/U) in MY 2015/16 (Figures 13 & 16).
Projected Foreign (Non‐U.S.) soybean ending stocks of 85.96 mmt (21.8% S/U) in “new crop” MY 2018/19,
are down 1.1% from 84.73 mmt (22.7% S/U) in “old crop” MY 2017/18, and is down from 88.47 mmt (24.5%
S/U) in MY 2016/17.
…
2020 Ag Lenders Conference Presentations
y in the Charles. H. Dyson School of Applied Economics and Management at Cornell University.
Over the next year, I’ll be developing a research, extension, and teaching program in agricultural policy. Expect to hear from me!
Introduction: traditional background
Introduction: nontraditional background
What is nontraditional finance?
“Nontraditional credit suppliers or lenders…are those whose primary contacts with producers historically have been for goods and services other than credit” (Sherrick, Sonka, & Monke, 1994)
Current definition: Lending that is originated outside of the “traditional” local branch‐loan officer model
Other important categories
2 stories about nontraditional finance
Story 1: Evolving agricultural credit markets• …
December 1, 2015
Beef Cattle
of procurement patterns, management
practices, and producer … can best be described as managing for 141 days, targeting a … useful in better understanding management practices within the stocker …
October 7, 2014
Commodity Program Papers
with their marketing
and riskmanagement decisions. Therisk of loss in trading futures … Sponsors that include:
1. Ag Risk Solutions
2. ARMtech Insurance …
August 28, 2015
Financial Management
This study examines the effectiveness of a relatively new whole‐farm revenue insurance product,
Adjusted Gross Revenue‐Lite (AGR‐Lite), on net farm income risk for 49 southeast Kansas beef farms using farm‐
level data. AGR‐Lite is whole‐farm revenue insurance, which provides protection against low revenue resulting
from natural disasters causing production losses and commodity market fluctuations that affect revenue. AGR‐
Lite may be used as a stand‐alone product or as an umbrella (wraparound) policy allowing producers to use
AGR‐Lite in conjunction with alternative insurance policies.
…
August 28, 2015
KFMA Research
This study examines the effectiveness of a relatively new whole‐farm revenue insurance product,
Adjusted Gross Revenue‐Lite (AGR‐Lite), on net farm income risk for 49 southeast Kansas beef farms using farm‐
level data. AGR‐Lite is whole‐farm revenue insurance, which provides protection against low revenue resulting
from natural disasters causing production losses and commodity market fluctuations that affect revenue. AGR‐
Lite may be used as a stand‐alone product or as an umbrella (wraparound) policy allowing producers to use
AGR‐Lite in conjunction with alternative insurance policies.
…
2018 Extension Outlook Conference
and
Director, North Central Extension RiskManagement Education Center
Department … agecon.unl.edu/lubben
North Central Extension RiskManagement Education Center – ncerme.org
E-mail …
November 12, 2015
2015 Crop Insurance Workshop Presentations
Specialist, Agriculture & Business Management, CSU ExtensionRiskManagement Decision for Tomorrow2015 …
February 27, 2018
2018 Farm Bill Meetings Presentations
andDirector, North Central Extension RiskManagement Education Center
Department … agecon.unl.edu/lubben
North Central Extension RiskManagement Education Center – ncerme.org
E-mail …