November 26, 2004



Asian Rust May Affect US Soybean Outlook in 2005


Many US farmers and agriculture experts are concerned that the discovery of Asian soybean rust in an LSU test plot two weeks ago may affect the crop picture for 2005.


At a two-day summit at LSU, David Lanclos, a soybean specialist with the LSU AgCenter, said the first thing farmers should consider is their budget.


You have to look at your finances first and foremost, Lanclos said. If you can't budget two sprays for next year, you need to start thinking about alternative crops.


Lanclos said the alternative crop picture isn't necessarily rosy either.


You have aflatoxin in corn, you have low yields in grain sorghum and cotton prices aren't stable, he said. In beans, if we weren't dealing with the rust, we'll be seeing a million acres or more due to low input costs. However, because rust is now in the picture, we are cautioning producers that they may get by in 2005 with one fungicidal application, but they must have at least two budgeted.


David Bollich, a grain marketing specialist with the Louisiana Farm Bureau Marketing Association, said there are two scenarios farmers need to think about as planting time approaches.


"First, we are looking at some acres of soybeans shifting out into other crops. Secondly, what does get planted will see some loss, assuming widespread infection from the fungus."


Bollich said he is worried about the possible havoc Asian soybean rust may have caused even before it shows up in the fields.


"The problem we will run into this spring is that, as the markets try to price the risk of rust into our new crop, farmers will look at five or six dollar beans and weigh that price against spraying. It is likely they will then say they don't want to plant beans, Bollich said.


Once that happens, and experts predict a large number of acres shifting out of soybeans, prices will move higher, Bollich said. Once they move higher, farmers will then start to rethink planting based on those new numbers. It could create a real yo-yo effect in the markets.


Bollich said the markets will also be volatile with changes from each new report that comes out.


"Not to say every day we'lll see massive changes, but there will be periods where it's going to ramp up from some finding of rust or a report from a plant pathologist," he said. Predictions regarding the impact of this rust discovery on the state's soybean crop already vary widely. I've heard from pathologists who say it will have minimum impact and from those who say half the farmers in Louisiana will want to refrain from planting.


Bollich said farmers looking to book prices right now for soybeans need to keep a few things in mind.


Farmers looking at new crop soybean prices right now are probably in a bit of a quandary thinking what if beans get to six dollars a bushel, he said. Prior to hearing of the rust, they would have been happy to get some new crop sold, given the current supply and demand situation.

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