American Soybean Association (ASA) leaders are in Washington, D.C. today calling on policymakers to address soybean grower issues in a new Farm Bill as well as concerns about China’s recent embargo of U.S. soybeans. The ASA meetings are key as the Senate considers approaches to a new Farm Bill and President Bush participates in the Asian Pacific Economic Cooperation (APEC) Summit in Shanghai.

Soybean grower leaders are meeting with Senators as well as U.S. Special Trade Negotiator for Agriculture Allen Johnson. ASA representatives included President Bart Ruth of Nebraska, First Vice President Dwain Ford of Illinois, Vice President Ron Heck of Iowa, past-President Marc Curtis of Mississippi and Board Member Bob Metz of South Dakota.

“As the Senate considers Farm Bill policy, it is important for soybean growers to communicate their dissatisfaction with the House-approved Farm Bill,” Ruth said. “The Senate needs to draft an alternative bill that provides fair and balanced treatment for soybean producers.”

The House of Representatives approved the “Agriculture Security Act” on October 5. ASA supports the overall spending levels set in the bill. However, ASA has grave concerns that the legislation does not provide levels of support for soybeans that are equitable with the support for other major crops. These concerns focused on fixed payments and target prices for soybeans that do not reflect historical price relationships with other program crops. Based on the historical price relationship between soybeans and corn of 2.5/1.0, the soybean fixed payment should be 66 percent higher than provided for in the House bill. Using the same price ratio with target prices, the soybean target price should be 18 percent higher than specified in the House bill.

Compounding the effects of the disproportionate fixed payment and target price established for soybeans, the House bill also reduces maximum loan rates for soybeans by 6.5 percent from $5.26 per bushel to $4.92, representing an annual loss of $1 billion in income protection. Further, loan rates for all crops except cotton and rice can fall below established maximum levels to whatever rate is determined by formula; crops other than cotton and rice have no guaranteed income floor under the House loan program.

“The combined effects of the inequitable treatment of soybeans in the House bill would be to disadvantage soybean farmers and the production of soybeans in the United States,” Ruth said. “This would be very perverse agricultural policy since the rate of growth in demand and usage for soybeans during the past decade has been far greater than that of any other commodity. Global usage of soybeans grew by 56 percent as compared to 27 percent for corn, 15 percent for rice, 7.5 percent for cotton, and only 6.2 percent for wheat. In the United States, growth in usage of soybeans similarly outpaced the growth of other commodities, with soybean usage growing by 36 percent and wheat usage actually declining by 5 percent.” Ruth continued, “Disadvantaging U.S. production of the commodity that is experiencing the fastest rates of growth in global and U.S. demand would transfer production of soybeans to South America. That just isn’t good agricultural or public policy.”

Regarding trade with China, ASA leaders urged the Administration to continue to press China to drop its unjustified and discriminatory barriers to soybean imports. Soybean prices have dropped an estimated 25 cents per bushel since September 27, when China’s national quarantine office issued new requirements for documentation, testing and inspection of soybean shipments for noxious weeds, diseases and foreign materials.

This action severely compounded the problems that have occurred since June, when China’s Ministry of Agriculture announced it would implement regulations governing imports of crops produced from biotechnology. After four months of U.S. requests for clarification, China has failed to clarify how these regulations will be administered or provide assurances that shipments received will be allowed entry. As a result of China’s unjustified barriers to soybean imports, the United States has exported no soybeans to China during the current marketing year, September 1 to October 4, versus 341,600 metric tons during the same period last year. China’s trade restrictions also have caused the postponement or cancellation of soybean shipments valued at $100 million. Soybeans are the United States’ leading agricultural export commodity to China, and China was American soybean farmers’ largest export market last year with exports totaling over $1 billion.