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What happens when Brazil runs out of soybeans?
The Chinese are currently filling their soy needs with Brazilian soybeans. But what happens when the Brazilian supplies are exhausted?
Grant Kimberley, director of market development with the Iowa Soybean Association, says Brazil normally starts to run out of soybeans around this time of the year.
“Brazil did have a pretty good production year, this last year, so they may have a little bit more than they normally would have had,” Kimberley says. “But eventually, whether it’s next month or at least by December, they’re probably going to start running out of supplies. And so that may force the Chinese to come back to buy some from the U.S.”
But there’s no guarantee that will happen. Kimberley says the Chinese are intent on reducing their need for U.S. soybeans.
“They’ve said that they’re going to reformulate and go with low-protein feed rations. They’re going to use alternative feed sources, other than soybeans,” he says. “They’re going to try to reduce their demand for soybeans in general—not just from the U.S., but just their overall demand.”
Kimberley says the Chinese will probably need a certain amount from the U.S. But he thinks they will do all they can to avoid buying U.S. soybeans until the trade dispute between the two countries is resolved.
“That’s why we’re hopeful that both sides will continue to negotiate and work to try to find a resolution to this sooner rather than later.”
AUDIO: Grant Kimberley
How about putting some of that acreage in Flax – something that Americans seeking a healthy diet will buy!