The potential wind-borne entry of Asian soybean rust into the United States could cost the U.S. soybean industry $640 million to $1.3 billion in economic losses in it’s first year in the country, according to a recent economic analysis.
Annual loses in the ensuing years could average anywhere between $240 million and $2.0 billion, depending on the severity and extent of subsequent outbreaks.
Of course, any factors that reduces soybean production are likely to boost the price of soybeans and soybean meal. With May soybean contracts over $9 per bushel and meal contracts near $320 per ton, hog producers can scarcely afford anything that increases the price of beans and threatens already tight supplies.
In some markets, soybeans have been over $10 per bushel, due to tight supplies that have some experts worried about exhausting the domestic supply this summer. Bids for new crop soybeans have been going for as high as $7 per bushel.
The biggest reason for the spike in soybean prices is a revision in the Brazilian soybean production estimates. With 90 percent of the soybean harvest complete in Brazil, the estimate was lowered from 57.7 million metric tons to 50.1 metric tons.
Add that to the fact that the U.S. domestic crush volume is higher than expected and you have support for the high soybean prices.