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Soybean farmers and Congress seek answers to questionable USDA export and supply reports: 'Please Madame Secretary, tell us what is happening'

Editor's note, July 9, 2003: The following news release has been corrected to show that "to date the USDA numbers show that export sales have totaled 1.059 billion bushels with..." The initial version put the export numbers at 1.59 billion bushels. -- RS.

(Tuesday, July 8, 2003 -- CropChoice news) -- Froma news release.

Contact: Contact: Harvey Joe Sanner (501) 516-7000, hjsanner@aol.com

Des Arc, Ark., July 8, 2003 --- The Soybean Producers of America (SPA) expressed their gratitude to United States Congressman Marion Berry, D-Ark., today for a letter he sent to Secretary of Agriculture Ann Veneman. When Congressman Berry was alerted to the apparent discrepancy in the United States Department of Agriculture's World Outlook Board recent report on export sales of soybeans and this year's ending (Aug. 31, 2003) soybean stocks projection, he requested information from Secretary Veneman that might explain why soybean prices aren't reflecting the tight supply situation.

Harvey Joe Sanner, Executive Director of the SPA said, "These USDA numbers appear to be terribly inaccurate. It's as if supply and demand do not impact our markets anymore."

To date the USDA numbers show that export sales have totaled 1.059 billion bushels with eight weeks of export opportunities remaining before the market year ends. "Not only did USDA fail to adjust their numbers to reflect the actual bushels exported in their ending stocks forecast, they are assuming that no beans will be exported during the next two months. We have also learned that USDA has relied on unrealistic high soybean yield projections, which adds to their bloated carry-out numbers," Sanner added.

In alerting producers to the potential serious nature of what is going on with the questionable soybean supply and demand numbers, SPA Chairman Dan McGuire referred to information provided by Risk Management Specialist Jim McCormick of Allendale, Inc. "When experts like Mr. McCormick say that the government has blatantly underestimated demand, and overestimated stocks by 50 million bushels, which depresses prices, we think it is time for farm and commodity organizations as well as regulatory entities and the Congress to take a close look at the soybean market structure," McGuire said. Allendale, Inc. is based in McHenry, Illinois and is one of the largest commodity research advisory firms in Mid-America and one of the few brokerage firms that develops its own research.

"Furthermore, Mr. McCormick points out that the 1.059 billion bushels of soybeans already committed for sale means that ending stocks should be 91 million bushels, not the 140 million that USDA indicates, and the last time stocks were 100 million bushels was 1976 and 1973 when prices topped $10.76 and $12.90 per bushel respectively," McGuire said.

An SPA examination of previous projections by USDA regarding soybean ending stocks revealed that over estimations are common, sometimes by as much as 168 million bushels per year. By very conservative estimates, soybean ending stocks will be near record lows before the 2003 crop is available. In fact, when ending soybean stocks were this low in 1996, soybeans were trading in the $7.50 per bushel range. Now they are selling more than a dollar a bushel below that level while demand and new uses are rising.

"All the check-off funded soybean promotion, research and new uses for soy products means little if producers can be denied fair and equitable prices when supplies are at pipeline levels. We are eager to see the information Secretary Veneman provides to Congressman Berry," Sanner said.


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