Minnesota farmers backed away from soybeans in 2019

Minnesota farmers planted 12% fewer acres of soybeans in 2019 than the previous year, as the trade war battered demand for the state's second-largest cash crop and heavy spring rains delayed planting.

The decline in soybeans led to a drop in acres planted for all crops in the state last year.

"The trade war certainly didn't help, but weather was the deciding factor," said Bryan Klabunde, a farmer near Waubun, in northwest Minnesota.

Planting delays in some parts of the state were so extreme that farmers couldn't even plant soybeans, which don't have to be seeded as early as corn.

But for Klabunde, who farms in a part of the state where soybean production is geared for export to China, the trade war was the main reason to reduce soybean acres and plant more corn.

"Based on the trade war, our acres were down. Corn seemed like it was going to be a better bet," Klabunde said. "It didn't turn out to be the case. The market was flat. Something just needs to jar loose."

Minnesotans planted 6.9 million acres of soybeans in 2019, compared to 7.8 million acres in 2018, the U.S. Department of Agriculture said. Planted corn acres fell less than 1% in the state last year.

Nationally, soybean acres planted fell 14.6%. Corn acres planted rose slightly.

The federal government's bailout for farmers affected by the trade war, called the Market Facilitation Program or MFP, has benefited soybean farmers most. But its 2019 round wasn't announced until May 23, after many farmers had decided what to plant.

"At the time of planting, the price of soybeans was at a point where they probably weren't break-even and the MFP hadn't been announced," said Kelly Longtin, general manager of the Red River Grain Co. in Breckenridge, Minn.

For farmers, the decision to plant that last field with corn instead of soybeans wasn't part of a grand plan, it was likely decided in the moment based on prices, Longtin said.

"You're getting to the end of May, corn made more sense," Longtin said. "They probably planted one more field of corn and one less field of soybeans, and across the state that adds up quick."

Though farmers have repeatedly voiced concerns that the trade war will permanently damage demand for soybeans in China, last year's drop in planted soybeans is unlikely to be permanent, said Mike Steenhoek, director of the Iowa-based Soy Transportation Coalition.

Corn and soybean farmers can tinker with their ratio, but most of them plant 50% soybeans and 50% corn, and moving too far off that isn't good for the soil.

"Some farmers go 60% corn, 40% soy, but if you want to go more than that, you're planting corn after corn after corn," Steenhoek said. "And farmers like to rotate those crops."

Klabunde, the farmer near Waubun, said another winter of heavy snow portends a wet spring. That should bode well for soybeans, he said, since they can be planted later and don't need as much care as corn.

"In the northern part of the state if you don't have your corn in by the 15th of May, there's a strong consideration to plant soybeans," Klabunde said.

As for the trade war and its effect on soybean prices, Klabunde said he's not yet optimistic. Reports of a Phase One trade deal with China haven't changed that.

"There's no more certainty in trade than there was five months ago," Klabunde said.

Adam Belz • 612-673-4405 Twitter: @adambelz