Trade war causes some wild swings


The deer grazing on the soybeans across the road did not move much when we drove down the drive yesterday afternoon. She was standing in the shade of the woods for an early excursion into culinary Nirvana.

Normally she would stay hidden until dusk, but the pull of the soybeans was too much for her.

Deer love soybeans

They also love red clover, as anyone who used to plow at night with a cab tractor call tell you. In the dark ages, when we plowed sod, it was normal to work after dark with a whole herd of deer for company, sometimes almost close enough to pet.

They had no fear of a man in a tractor cab. The genetic imprint of man-fear apparently only applied to man on foot. Man on a tractor had never killed them. Men in cars had, so they run from them.

Canada geese love soybeans, also.

Plant some near a pond and you discover something about geese you will wish you did not know. That is, they know exactly to the inch which plant is the nearest to the water. Take an aerial photo, get out a compass, and you will realize that you can draw a perfect semi-circle some distance from the pond to the edge of the denuded field.

The shape never changes. The distance of the semi-circle from the water is only a function of how much time they have had to eat. Every other year I fed three acres of beans to the geese on one field I used to farm.

Feeding wildlife

If you farm, you feed wildlife. One farmer I used to go to church with brought some kind of venison meal to every church dinner. He lived in Pennsylvania and had a nuisance deer permit. I remember a farmer in Erie County, Pa., who had a lot of woods.

He told me he and his friends shot over 100 deer one day. I suggested that would solve the problem for a while, but he said he could shoot that many more any day he wanted to. The good news for you this morning is that the deer are not costing you as much to feed as they were last month.

That is as good as the news gets. The bad news is, prices are still plummeting on good weather and political export news. You know it is a bad day when the first item on the market letter from CHS is, “President Trump has announced another set of 10 percent tariffs on $200 billion in Chinese imports late yesterday.”

Since our biggest exports to China are farm products, once again the American farmer is paying the price for foreign relations. We are putting tariffs on high-tech items to try to limit the stealing of intellectual property.

Chinese retaliation

The Chinese continue to retaliate by putting tariffs on our soybeans. A generation ago, President Jimmy Carter put limits on our ag trade in retaliation for “the great Russian grain robbery.”

This was actually a clever plan by the Russians to quietly buy a lot of wheat from every exporter at the same time.

By the time the trade realized the extent of the purchases, a big price run-up was on. The real start to the ag trade wars actually was a Reagan-era attempt to limit soybean exports to Japan.

This misguided policy was a result of rising soy and product prices here, which the non-livestock farmers thought was great. Sudden changes in trade policy never end well.

The Japanese took a billion dollars to Brazil to start up soybean production, and the rest, as we say, is history. Now Brazil and Argentina export more soybeans than the U.S. does.

In theory, the lastest soybean war will not change much.

World market

Soybeans are a world market, and China will continue to use as many as ever, just not ours. Ours will go somewhere else. In practice, the short-term prices are corroded, and the Brazilians are inspired to increase production yet again.

Add to the trade problems the current great weather across the Midwest, and you have corn prices down this Tuesday morning, June 19, another seven cents, beans off 22 cents.

December corn futures are down more than 60 cents now in less than a month, with the new contract low overnight at 3.68.

November soybean futures are off over $1.55 in the same time. USDA was expected to drop corn crop conditions to 76 percent good and excellent in the Monday report, but they reported 78 percent instead.

The soybean condition was downgraded to 73 percent. That was off 1 percent, but still one of the great conditions reported in the last … forever. Also, the soybean crop planting is now virtually complete at 97 percent, against an average 91 percent.

Ohio is at 95 percent, right on the average. So, enjoy watching the beautiful crops most of you have. Enjoy the deer and the geese, too.

Look on the bright side. Don’t spend much time on price watching. You won’t enjoy it for a while.


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