Thursday, March 4, 2021

No proof Biden orders caused sudden corn, soybean price drops

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If Your Time is short

  • A post claims that unspecified executive orders issued by Biden during his first two days as president caused a sudden drop in soybean and corn prices, and big financial losses for farmers.

  • Experts said prices for both commodities have been high and were due for a correction.

  • The experts saw no connection between any executive orders and the price decreases.

During his first 48 hours in office, President Joe Biden signed a record number of executive orders and has continued issuing more, with many aimed at fighting the coronavirus pandemic or reversing orders issued by President Donald Trump.

Did any of Biden’s initial orders cost farmers a bushel full of cash by causing the price of corn and soybeans to plummet over 48 hours?

That’s the claim made in a widely shared Facebook post. The post  is an image of a Jan. 23 tweet that was shared more than 30,000 times on Twitter and reads:

“Soybean price is down 70 cents per bushel in the last two days. Corn is down 50 cents per bushel in two days. For those who don’t know, a small farmer like me working 1,000 acres just lost $100,000 on a 200 bushel per acre average corn crop thanks to Biden’s executive orders.”

The Facebook post was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

There has been a sudden drop in these commodity prices, though arguably less than what the post claims. But experts PolitiFact spoke to said they saw no evidence that any of Biden’s orders, which have the force of law, were the cause of the changes, given that prices have been running high.

It’s not clear which of Biden’s early orders the post might be blaming. A Jan. 22 order asks the Department of Agriculture to consider expanding and extending federal nutrition assistance programs.

Market was due for correction; other factors in play

Looking at changes between Jan. 20 — the date of Biden’s inauguration and his first executive orders — to Jan. 23, the date of the tweet — soybean prices dropped 58 or 59 cents and corn prices 19 or 22 cents per bushel, depending on the contract, said Ben Brown, an agricultural and applied economics professor at the University of Missouri.

Brown said the abrupt declines were not surprising, because prices have recently exceeded $13 per bushel for soybeans and $5 per bushel for corn, as crop supplies have been tight.

“Corn and soybean markets built strong gains in the markets over the last couple months with no major correction, leaving them vulnerable to last week’s action,” he said.

“I find no evidence to suggest that Biden’s executive orders caused the dramatic decrease” in prices, Brown said, noting that most of the orders “were already known and any impact to commodity markets were built in.”

Looking at price changes another way — between Jan. 21 and 22, the two days after the first executive orders — the declines were 79 or 84 cents on soybeans, depending on the contract, and 26 to 28 cents on corn, said Aaron Smith, professor of agricultural and resource economics at the University of Tennessee.

“Markets are simultaneously digesting data from multiple sources, so attributing declines or increases to one event over a three-day period should be done cautiously,” Smith said.

Because corn and soybean prices have been rising since August, driven by strong export sales, global weather concerns and other factors, “a short-term correction and price consolidation was overdue,” he said.

Many factors led to the price declines during Biden’s first days in office, Smith said, including beneficial rainfall and weather forecasts in South America; COVID-19 concerns related to new strains of the virus and a slower than expected pace of vaccinations; selling based on profit taking; and the change in the presidential administration.

Our ruling

A widely shared Facebook post showing a picture of a tweet claimed that soybeans dropped 70 cents and corn 50 cents per bushel in two days, causing farmers to lose big money, “thanks to Biden’s executive orders.”

The prices of both commodities did drop significantly, though arguably less than the post claims, during Biden’s first days in office.

But two experts said they saw no evidence that any of the orders issued by Biden during those first days caused the price drops. The experts said the drops were not surprising, given that prices for both commodities had been running high, and that multiple factors were at play.

We rate the post Mostly False.


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