From Mark Weinraub and P.J. Huffstutter
(Reuters) – The American farmers who have finished their harvest face a big problem – where to put the grain mountain they can not sell to Chinese buyers.
For Luisiana farmers, Richard Fontaine and his neighbors, the decision was costly: let the crops be rotten.
Fontenote spouts less than 1,000 of its 1,700 acres of soybeans this fall by cutting plants into dirt instead of collecting more than $ 300,000 beans.
His bean was damaged by bad weather, degraded by damp harvest. Usually he could sell them to a local elevator – giant silos, usually run by international grain traders who store grain.
But this year they do not buy such damaged grains. The lifts are already full.
"No one wants them," Fontenotte said in a telephone interview. As he spoke, he ran his tractor through a soy field, arranging it. "I do not know what else to do.
In the United States, grain growers are polluting crops, leaving them rotten or stagnant on the ground, hoping for better prices next year, according to interviews with more than two dozen farmers, academic researchers and farm creditors. This is one of the results, they say, for a trade war in the US with China, which has hurt the demand for exports and conquered storage facilities with excess grain.
In Louisiana, up to 15% of oilseed crops are plowed or too damaged to trade, according to data analyzed by Louisiana University officials. Cultures will be thrown into parts of Mississippi and Arkansas. Grain piles covered with snow sit on the ground in North and South Dakota. And in Illinois and Indiana, some farmers are struggling to protect silo bags filled with animal cultures.
US farmers planted 89.1 million acres of soybeans this year, the second largest, expecting China's rising demand for better returns than other bulk crops.
But Beijing hit 25 percent US soybean tariff in response to Washington's obligations on Chinese exports. This effectively excluded US soybean exports to China, which last year amounted to about $ 12 billion. China typically takes about 60% of US stocks.
The US government has developed an aid program of the same size – $ 12 billion – to help farmers bear the cost of a trade war. By mid-November, $ 837.8 million had been paid.
Some of that money will go from farmers to grain traders such as Archer Daniels Minndang Co. and Bundji, who are imposing on farmers more to store crops in lifts where there is little space. Bunge and ADM did not respond to requests for comment on storage fees.
Storm collapse and higher charges have increased the revenue of the Andersons grain elevator [ANDE.O], Said Chief Executive Pat Bowe in an interview.
"It pays the grain grower to keep it – that's the old-fashioned way to make money," Bow said.
These are boom times for John Wierenga, president of the Nealta Grain Storage Chain. The sales of their bags – white tubes up to 300 feet, which now emit the Midwest fields – have increased 30% over a year earlier.
"Demand is huge," Wierenga said. – We're sold.
Farmers feel a pinch. Those in Central Illinois could pay up to 40% more than in previous years to store crops in the coming weeks, says farm consultant Matt Bennett.
This is equivalent to between 3 cents and 6 cents a bushel, said Bennett, a painful cost for culture, which is already expected to bring farmers a little revenue.
Storage speeds swing wild, depending on the location of the elevator. Grain producers in rivers usually load more than their in-house colleagues because they are more dependent on export markets.
At some coastal terminals in the Midwest, farmers pay 60 cents a bushel for storing soybeans by the end of the year – more than twice as much as a year ago. Some commercial terminals require farmers only to put their soybeans.
Commercial warfare has only deepened the tension of storage, which has been a constant problem in recent years, owing primarily to global oversupply of grain.
Even before harvest this autumn, about 20 percent of the total grain storage in the US was full of corn, soy and wheat from previous crops, according to the US Department of Agriculture. This is the highest in 12 years for this time of year.
Some grain traders also pay extra fees to farmers who deliver less than the perfect soy, said Russell Altom, a soy farmer and senior vice president of agricultural credit at Relyance Bank in Pine Bluff, Arkansas.
"I've never seen such things so bad," said Altom. "I know a few farmers who hire lawyers to see if they can complain about pricing and fees."
Eric Maupin, a farmer in Newburne, Tennessee, said he faced so-called lucrative 60 cents at $ 1.20 for Bushel lifts, more than three times higher than a year ago.
"Damage can be anything – a fragmented bean, which is too small, too big – whatever it is," said Maupin.
Some farmers take out the farm equipment from the barns to create a grain overflow.
After packing nearly half a million bushels of corn and soy in ordinary steel bins, Terry Honselman and his family discovered extra space in a 35-year-old barrack on their farm in Casey, Illinois.
For most years, the building has been protecting agricultural equipment and seed bags. It is now filled with 75,000 corn bushes.
Like others, Honseman is engaged in resolving the war before this spring – when he says he will need space for planting.
(Report by Mark Weinraub in Chicago and Casey, Illinois and Paul H. Huffstutter in Chicago, edited by Carolyn Stuffer, Simon Webb and Paul Tomasch)
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