CHICAGO (Reuters) – Archer-Daniels-Midland, one of the world’s largest grain traders, is offering incentives for U.S. farmers to deliver soybeans to one of its main processing facilities this month as low prices have slowed producers’ sales, a grain trader and a company official with knowledge of the matter said.
In an unusual offer during the peak fall harvest, ADM is allowing farmers to deliver soybeans to its facility in Decatur, Illinois, and set the final sales price later without paying for storage, the two sources said.
In return, ADM will take ownership of the soybeans, which will allow it to process the crops, they added.
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A company spokesperson declined to comment.
Bumper harvests have pressured crop prices and farmers are suffering from high costs of fertilizers and other inputs. Additionally, China, the biggest importer of soybeans, responded to President Donald Trump’s trade tariffs this year by turning to South America, depriving U.S. farmers of their main market.
FARMERS STORE CROP
Many farmers are stockpiling soybeans in hopes of getting better prices in the future, growers and analysts said, leaving fewer supplies available for major U.S. processors.
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ADM’s offer, known as free deferred pricing, will be available to farmers until the end of October, and those who participate will have until September 2026 to set a selling price, according to the company official.
“It tells me that they need grain, that they don’t have enough grain to keep the process going,” said David Isermann, a farmer from Streator, Illinois, who will not participate in the ADM program.
Farmers said ADM’s offer was unusual because processors typically have access to abundant supplies during the harvest season.
This year, farmers agreed to sell less of their crop than usual at the start of the harvest season, Miranda Wamsley, ADM’s vice president of grower sourcing, said in an interview last month. She did not provide specific figures.
Some farmers said they normally sell about half the expected crop by the time harvest begins, but have sold about 20% or less this year.
“Because prices are low, everyone is storing grain on the farm and saying, ‘No, you won’t get my grain until prices go up,’” said Steve Pitstick, a farmer in Maple Park, Illinois.
Commercial grain companies still need crops to process products like vegetable oil.
In September, U.S. soybean crushing reached the fourth-highest level of any month, according to data from the National Oilseed Processors Association released Wednesday.
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FARMERS STRUGGLE TO MAKE MONEY
Deferred pricing is potentially attractive to farmers who are harvesting voluminous crops because otherwise they have to figure out where to put the supplies if they don’t want to sell them.
Storage space is limited on farms and costs a few cents per bushel per month at grain elevators. Crops can also be damaged in storage.
U.S. Secretary of Agriculture Brooke Rollins said last week that the Trump administration could offer an aid program to soybean farmers once the two-week government shutdown ends.
