Soybean Demand Continues to Drive Production

Sean Charles | May 06, 2008

The world soybean harvest reached a record 214 million tons in 2005, the latest year with data, an increase of 4.4 percent from 2004.1 (See Figure 1.) The United States, Brazil, Argen­tina, and China accounted for 90 percent of that output.2 (See Figure 2.)

The United States is the largest producer of soybeans, with an output of 83.4 million tons in 2005.3 Over the past 25 years, however, its market dominance has eroded.4 The United States produced 60 percent of the world’s soybeans in 1980 but only 39 percent in 2005.5 The country’s declining role as an exporter can be traced to increased competition with South American producers, growing domestic competition with corn, the production of biodiesel, and the resistance in some markets to geneti­cally modified (GM) soybeans.6

Soybeans enrich the soil with nitrogen, which can then be used by other plants, making them beneficial for crop rotations.7 In the United States, this has usually meant planting soybeans and corn in alternating years. But high demand for corn for ethanol production and distiller’s grains (a high-protein animal feed) has driven many farmers to plant two years of corn for every year of soybeans.8 This in large part explains the 7-percent decline in total U.S. soybean harvested area in 2005.9 Globally, however, harvested area stayed stable at 92 million hectares.10 (See Figure 3.)

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