The Global Economic Impact of U.S. Soybean Production

The Global Economic Impact of U.S. Soybean Production

Soybeans have evolved into a pivotal component of American agriculture, contributing a staggering $124 billion to the U.S. economy in 2022, as indicated by a study conducted by the National Oilseed Processors Association and the United Soybean Board.

“Soybeans’ contribution to the U.S. economy is only increasing day by day,” remarked Himanshu Gupta, CEO, and co-founder of ClimateAI, in an interview with CNBC.

This versatile legume is celebrated as a crop with multifaceted applications, finding use in food, fuel, and animal feed industries globally.

“Soybeans are kind of that wonder crop that has amazing capabilities,” explained Arlan Suderman, chief commodities economist at StoneX, in a conversation with CNBC.

Remarkably, the U.S. was not always a soybean-producing powerhouse, as Suderman recollected, “I’m old enough to remember when soybeans were an alternative crop that a few people were playing with back in the 1960s.”

Soybeans once occupied a niche in agriculture, but U.S. farmers eventually recognized their potential for animal feed, protein, and export. The yields from soybean farms saw significant growth over the years.

Meagan Kaiser, a soybean farmer and chair of the United Soybean Board, shared insights into this transformation: “The average soybean production in our county 40 years ago, in 1980, was 31 bushels. Today, that same acre produces 51 bushels on average. Most of the time it’s much higher than that.”

In recent years, the global soybean market experienced explosive growth, with the U.S. at the forefront of production. For instance, in the early 2000s, the U.S. earned about $9 billion from all oilseed crop exports combined. By 2021, revenue from soybean exports alone soared to $26.4 billion, as reported by the U.S. Department of Agriculture.

Nonetheless, the U.S. has encountered challenges, partially stemming from its reliance on a single export market: China.

China, being the largest importer of soybeans globally, accounts for approximately 60% of the total soybean trade. USDA data reveals that about half of the value of U.S. soybean exports is directed to China.

This trade relationship took a downturn in 2018 when the U.S. engaged in a tit-for-tat tariff dispute with China, with soybeans becoming a focal point of this dispute.

As a result, China shifted its attention to Brazil for soybean imports, propelling the South American nation to the position of the world’s foremost soybean producer and exporter.

Joe Janzen, an assistant professor at the University of Illinois and its FarmDoc project, explained the factors behind Brazil’s ascendancy, stating, “Over 30 or 40 years, [Brazil] dramatically increased soybean acreage and production.”

He added, “Brazil is a relatively low-cost place to produce corn and soybeans. The export market is very competitive, and we need to be cost competitive with Brazil and Argentina if we want to capture market share.”

Intense international competition has prompted the U.S. market to explore alternative applications for soybeans, such as biofuels, renewable diesel, and bioplastics.

Meagan Kaiser expressed optimism about the future, noting, “In the next 10 years, we’re going to have a whole new generation of farmers… and they’re going to solve [problems] in a more efficient way. Ways that I probably can’t even imagine.”

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Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Science Currents journalist was involved in the writing and production of this article.