SPA leaders say its not the first time the North Carolina agribusiness consortium has tried to use such a strategy to influence the markets for soybeans, soy products, corn or feed wheat when prices were rising.
“It appears to be a blatant attempt to negatively pressure market prices paid to farmers in North Carolina and elsewhere,” said Harvey Joe Sanner, SPA executive director and soybean farmer from Des Arc. “Why would a large corporation make a public announcement of its internal business strategies?
“We have noticed that in all the months that they do not import feed grains, no public announcement is made. If it smells like market manipulation and walks like market manipulation, it is probably market manipulation. It hurts farm families worldwide, and if it is not unlawful it should be.”
Sanner says the farm community is also concerned about the potential for crop contamination from South America by the Asian rust virus that drastically reduces yield. Experts have warned of the danger that Asian Rust, which has been confirmed in Brazil, could make its way to U.S. soybean fields.
USDA has received appeals from SPA and other farm groups to restrict soybean imports from affected countries.
"Frankly, we don't believe the claims by Wilmington Bulk LLC that they are paying less for imported products,” said Sanner. “Their actions indicate a complete disregard for the well being of farm communities across America by an attempt to undermine the first grain market rally in years.
“All farmers need this overdue rally, especially those in drought-stricken areas, and certainly all farmers need to avoid Asian Rust contamination."
Dan McGuire, SPA chairman, has documented and compared soybean meal prices from Brazil versus meal purchased from processors right in North Carolina.
“On Oct. 28, 48 percent soybean meal pellets FOB the port of Paranagua, Brazil were priced at $258 per metric ton,” McGuire said. “When ocean freight to Wilmington, N.C., plus discharge, handling and inland freight to feeding operations is added, the price was about $308 per metric ton.
“On the same day 48 percent U.S. soybean meal was priced at $306.03 per metric ton from processors in Raleigh and Fayetteville, N.C.,” he noted. “Also, if importers buy a shipload (35,000 metric tons), they have to pay interest on the money used until all that meal is sold out. If they buy railcar or truck quantities in North Carolina, as needed, they avoid that added interest cost.”
McGuire called talk from importers of competitively bringing in feed wheat or corn from Europe “bogus nonsense. No. 2 yellow corn and No. 2 soft red winter wheat in North Carolina were from $1.50 to $2 per bushel cheaper than European or UK corn or feed wheat, based on Oct. 28, 2003 prices, even before adding ocean freight from Europe, plus discharge, handling and inland freight to feeding destinations.
“As usual, the agribusiness strategy appears to be about driving U.S. prices down,” he said. “This same strategy has been shown to also drive down world prices, as the United States is the proven price leader in the world for these commodities.”
The prices for Brazilian soybean meal, EU or British corn or wheat prices, plus ocean freight costs “expose the misinformation that imported feed is cheaper,” he said. “This case study confirms the dangers of current U.S. trade and farm policy and the exploitive mentality of the agribusiness multinationals who conceived it.”