David Iverson has been raising soybeans for 40 years. So the Astoria, S.D., farmer knows as well as anyone that the crop has seen its share of price swings. Now, with soybean prices surging, interest in soybeans has reached its highest levels in recent memory.
"We've had down prices for a number of years and all of a sudden we get a big rally. So there's more interest in soybeans now," said Iverson, who's also national secretary of the United Soybean Board, in which volunteer farmer-leaders administer soybean checkoff activities focused on research and market development.
By all accounts, the question isn't whether U.S. farmers will plant more acres to soybean this spring. Rather, it's how many additional acres will be devoted to beans. More will be known in late March, when the U.S. Department of Agriculture releases its widely watched annual Prospective Plantings report.
A look at prices reveals why soybeans have become more popular. The average U.S. price received for soybeans shot from $8.28 per bushel in May 2020 to $10.90 per bushel in January 2021, the last month for which official U.S. Department of Agriculture statistics are available. The January 2021 price is the highest beans have been since late 2014.
"If we have an early spring, we'll see a little more wheat (and potentially a little less soybeans.) If we have a late spring, we'll see a little less wheat," he said.
Wheat, a cool-season grass, generally fares best when it's planted early enough that it matures before late-summer heat. Typically, farmers who raise all three crops plant wheat first, then corn and finish up with soybeans.
In particular, planting soybeans two years a row on the same field "is not something I recommend" because it can put the field at greater risk from crop pests, he said.
Cornerstone of U.S. ag
Typically, about half of U.S. soybeans are exported each year, with China a major buyer, primarily to feed its huge hog population. Now, with China rebuilding its hog herd after a devastating bout of African swine fever, Chinese demand is strong, officials say. Another factor is that China has banned feeding its hogs table scraps, a practice known as swill-feeding, which increases the need for soybeans and other conventional feed.
Though Brazil recently overtook the United States as the world's leading soybean producer and exporter, soybeans remain a cornerstone of U.S. ag along with corn and wheat. In 2020, U.S. farmers planted 90.9 million acres of corn for grain, 83.1 million acres of soybeans and 44.35 million acres of wheat.
If it seems strange to see higher estimated acreage rise for all three crops, realize that the wet spring in 2020 prevented large amounts of cropland from being planted. The unplanted fields generally are much drier now, so it's reasonable to assume that they'll go back into production this spring — and that soybeans apparently will account for the majority of them.
Soybeans are important in most of the Upper Midwest, including Iowa and large parts of Minnesota, North Dakota and South Dakota. Iowa typically ranks second in U.S. soybean production (behind Illinois), while Minnesota usually is in the top five. North Dakota and South Dakota, in turn, typically rank in the top 10.
In large chunks of the region, particularly Iowa, southern Minnesota, eastern North Dakota and eastern South Dakota, many farmers have two-year crop rotations that alternate corn and soybeans. A two-year rotation of soybeans and wheat is common in some other parts of the area.
In some cases, the additional acres might be on fields that aren't best-suited for raising soybeans, lowering the potential profitability of growing the crop, he said.
Planting extra soybeans, especially two years in a row on the same field, requires special attention to the seed variety and avoiding use of the same variety. And because planting soybeans multiple years in a row on the same ground can lead to pest problems, it's important to scout fields extra carefully, Kandel said.
Many state Extension services provide guides on raising soybeans For example, South Dakota State University offers information at https://extension.sdstate.edu/agriculture/crops/soybean.
Private-sector agronomists, crop consultants and seed companies, among other sources, also can provide information on the agronomic challenges of growing soybeans on more acres.
Thoughts on 2021
The U.S. soybean crop has seen both record supplies and record demand over the past decade, "which has produced what I would call the see-saw effect in soybean acres, especially over the past five years," said Hart, the Iowa State economist.
Now, the see-saw is in the up position again. Hart said the last time he's seen this much interest in planting soybeans was 2016-17.
"Definitely (I'm) expecting more soybeans (planted) this spring," Hart said. "When you're looking nationwide, you're looking at another 6 or 8 million acres of soybeans planted this year," which is in line with the USDA planted acreage estimate.
"Some of that is going to come from the prevented planting ground we've had the past few years. But some of that will be some crop acreage shifting around, and that's going to be the most interesting aspect," he said. "You've got corn in a very strong pricing position, wheat sitting pretty good right now and soybeans — they all have very strong prices, so it's giving farmers the flexibility to choose which way they want to devote their land."
As Hart indicated, some fields once planned for corn and wheat likely will be switched to soybeans. Such a switch holds short-term profit potential, but carries the risk of additional pest problems and hurting soil health, experts say.
Vogel doesn't expect to see many slated-for-wheat fields switched to soybeans in northwest Minnesota, where the bulk of the state's wheat is grown. Northwest Minnesota farmers understand the value of a multi-crop rotation, he said.
How much soybeans to plant isn't the only issue facing area farmers. They also must decide whether current prices warrant selling a big chunk of their 2021 crop now, in advance of harvest.
Hart's advice: "It never hurts to look. But I'm not looking to be very aggressive in fully selling that crop. But if you want to put in some price protection, now's a good time to set in a floor" through tactics such as options.
Asked for any advice he might give to relatively new farmers who are enjoying surging soybean prices for the first time, he replied, "It's a great opportunity to lock in prices we haven't seen in a while."