US farmers have signalled plans to sow soyabeans across an area the size of Germany this year, an expanse that reflects the relentless rise of meat demand in China and other emerging economies.
The record 89.5m acres (36.2m hectares) of soyabean fields would follow all-time high plantings in South America, the other leading grower of the oilseed. The harvest under way in Brazil is set to surpass 100m tonnes for the first time, analysts say.
Soyabeans are crushed into vegetable oil and protein meal that is fed to livestock and chickens. Global demand has nearly doubled in the past decade to 331m tonnes, as the meat industry expands in countries such as China and Thailand to meet dietary changes.
Consumption is also growing inside the US, the top producer. Bunge, one of the world’s largest agricultural traders and processors, plans to build its first new US soyabean crushing plant in 15 years, partly to serve poultry companies.
“The world wants to buy soyabeans,” said Pedro Dejneka, partner at MD Commodities, a consultancy based in Chicago and Paraná, Brazil.
Plantings have increased in spite of a slump in agricultural commodities that is now in its fourth year. Prices for Chicago soyabean futures touched the lowest level of 2017 on Friday, with CBOT May soyabean futures dropping 1.8 per cent to $9.46 a bushel. CBOT May corn rose 0.5 per cent to to $3.59½ a bushel.
The acreage statistics were revealed in a US Department of Agriculture report called Prospective Plantings, a survey of 83,000 farmers in early March. While boosting soyabean acreage 7 per cent from last year’s record sum, farmers planned to reduce land planted with corn by 4 per cent to 90m acres, according to the USDA.
The US has become a critical soyabean supplier to China, selling it $14bn worth last year. The agricultural industry worries grain exports could be a victim of any trade dispute between the two countries. Donald Trump, US president, has warned his first summit next week with Chinese president Xi Jinping is likely to include a “very difficult” discussion on trade.
China imports three-fifths of the world’s internationally traded soyabeans. Domestic cultivation is focused mainly on foods such as tofu, said Joseph Glauber of the International Food Policy Research Institute in Washington. World demand growth has been “phenomenal”, he said, and “most of it is China.”
Despite good harvests in South America, farmers there have been slow to sell their stocks because of stronger currencies in both Brazil and Argentina, which reduce the value of a commodity that is traded internationally in dollars.
Emilce Terré at the Rosario Board of Trade in Argentina said: “The thing that worries us right now is that different factors suggest that farmer selling will stay below the normal pace this new season.”
Even as US farmers added acreage, domestic stocks of soyabeans stood at 1.7bn bushels as of March 1, 13 per cent more than last year, the USDA also reported.