A year ago, almost to the day, we ran an editorial that asked the above question — except the year was 2007.
That editorial said in part:
“Farmers, tighten your seat belts. This could be some year.
Beans in the teens? Analysts are saying it is possible. It depends to a large extent on whether a huge switch from beans to corn occurs on America’s farmland acres.
That switch would be occasioned by the rising demand of corn for ethanol and the very attractive corn prices, which that demand is already creating. ...”
At that point, in January 2007, corn for March delivery was knocking on the door of $4 a bushel and soybeans seem poised to hit $7.
One veteran analyst was suggesting an increase of between 8 to 10 million acres of corn across the nation, which could mean, he predicted, a reduction of between 6 to 7 million acres of beans.
That happened.
Another analyst was quoted as saying that “the day of sub-$6 bean prices is over” and there is talk that bean prices could double to $13 by the end of 2007. That didn’t happen. Not quite.
Last year’s editorial continued:
“... Of course, as the prices of those commodities go up — dragging wheat and oats with them — consumers will begin to feel the pinch in the supermarkets. Soybeans and corn and wheat feed the world and if it costs more, for example, to make a frozen pizza, you can bet you’re going to pay more for it. ...”
And it had this counsel for Mr. and Mrs. John Doe, the consumer:
“... But the trade-off may be that, for the first time in three decades, the farmer may be able to bank a buck on his crops, and you can take some comfort that he’ll be around to provide your food and fuel for years to come. ...”
The year 2007 was a real ride. Looking back, on Nov. 26, soybeans for January delivery hit $11.14 a bushel, the highest intraday price since July 1973, in after-hours trading at the Chicago Board of Trade.
Soybeans had advanced for the seventh straight week and had surged 62 percent in a year after U.S. farmers planted the fewest acres in 12 years.
And China just kept buying more and more.
On that same November day, corn for December went to $3.93 a bushel and the March corn contract rose to $4.10.
Wheat came along for the ride.
Commented a farmer relaxing in the office of a local elevator, “$11 wheat? I never thought I would see the day.”
On Dec. 11, January soybeans surged to $11.37, the highest spot contract since 1973. Corn closed above $4 for the first time since June. Wheat was at $8.94.
Now, into the New Year, corn has cooled, wheat is holding its own and soybeans are hot.
China and India —they are being lumped in the trade as “Chindia” — cannot get enough soybeans, that is to say, protein.
The diets of their people are changing. They can’t get enough soymeal and oil to feed the chickens and the pigs.
World stocks are shrinking. Brazil hoped to immensely increase its production, but will only reach 10 percent of its goal.
That leaves the American farmer who will put those acres that he pulled for corn last year back into soybeans and wheat.
A key member of the production committee of the United Soybean Board, which regularly takes the pulse of the U.S. soybean market, said he would not surprised to see soybeans go to $15 a bushel in 2008.
A grain marketing specialist from Maryland backed him up. “I won’t count it out,” he said.
Dare we say it again? Beans in the teens in 2008?
Farmers, tighten your seatbelts.