Dive Brief:
- U.S. soybean production is under threat as blistering heat engulfs the Midwest at a critical part of the plant’s growing stage.
- The return of high temperatures and drought conditions in August “have negatively impacted crop development,” according to a CoBank report issued on Thursday. Scouts on a tour through top producing soybean states found pods aborted as well as widespread sudden death syndrome and white mold.
- Soybeans are in the pod-setting phase, and August rains are crucial to maximize yield potential. However, hotter temperatures late in the growing stage tend to raise the content of soybean oil, which generally attracts higher prices than meal.
Dive Insight:
With planting acreage for soybeans already down this year, crop losses could further tighten supplies at a time where stocks are already at their lowest point in three years.
Multiple cities in the Midwest recorded smothering heat in late August, with temperatures in areas such as Sioux Falls, South Dakota setting records, according to the U.S. Department of Agriculture.
David Seba, co-owner of Seba Bros. Farms located south of Kansas City, told Agriculture Dive in an email that “crop conditions are dire.”
“Last week’s heat, with no rainfall and already extremely dry soil conditions, has done irreparable damage to the crop,” said Seba, who each week sends trucks north of the Sioux City area bordering Iowa, Nebraska and South Dakota. “Most fields now have huge wilted areas, presumably SDS, with no chance of recovery, even in the event of rainfall.”
However, with higher temperatures boosting oil content in crops, farmers may still be able to cash in. Demand for soybean meal has declined due to a tough market for livestock producers, while the appetite for soybean oil has jumped due to an expansion of renewable diesel.
“Although hot temperatures during the growing season tend to reduce soybean protein levels and lower soybean meal values, the combination of higher oil extraction and higher soybean oil prices will … benefit processor margins,” the CoBank report said.
Soybean oil prices are on the rise, according to the USDA. Cash soybean oil prices in Central Illinois increased to an average of 71 cents per pound in July, compared with 60 cents in June.
Although heat has also pressured corn yields, soybeans are more vulnerable to the effects of higher temperatures at this point of the growing cycle.
"Soybeans have a much tighter supply situation than corn due to the loss of planted acres," according to the CoBank report.
Editor’s note: This story has been updated to include comments from a farmer.
