USDA economist forecasts strong demand to continue
The future looks bright for U.S. soybeans.
“Right now, we’re one of the most high-quality and reliable suppliers in the world, and I see that continuing in the next 20 years,” says Keith Menzie, oilseeds analyst in the USDA Office of the Chief Economist.
While projections this far into the future might seem insignificant, they are important in the future planning process for U.S. soybean farmers, ag lenders, ag policy makers and the soy checkoff.
Demand drives profitability, and the checkoff is working on stimulating demand growth by defining and promoting the U.S. Soy Advantage. Based on soy’s component quality, sustainability and value, that advantage builds preference for U.S. soy in the face of competitive threats.
U.S. benefits from quality over quantity
Menzie says that South America will continue to be a strong competitor because of the acreage available in comparison to the United States, whose growth will largely come from increases in yield, not land.
“Soybean acres can expand in Brazil if the price is right,” he says. “They’ll need a pretty healthy price to keep expanding, but that is where the land is if you’re talking globally.”
Despite this, he says that the quality of U.S. soybeans and transportation advantage will continue to keep U.S. soy demand high. According to USDA Agricultural Projections to 2025, global soybean and products trade over the next 10 years is projected to increase in soybeans by 22 percent, in soybean meal by 20 percent and in soybean oil by 30 percent.
More meat, more meal
Rising incomes and increasing meat consumption in developing countries are expected to lead to increased livestock production, boosting demand for soy products for feed use, especially for poultry.
Over the next 20 years, Menzie sees growth continuing in China, which accounts for almost two-thirds of world soybean trade, and in other Southeast Asian countries like Thailand and Vietnam.
“Growing global incomes is the key,” Menzie says. “There are plenty of populations where incomes are growing and people are demanding more meat in their diets, so I think the outlook is good for soy as a protein source.”
Staying competitive through continuous improvement
No matter where the new market for soybeans is, the U.S. Soy Advantage – quality, sustainability and value – will continue to add demand. U.S. soybean farmers are unmatched when it comes to delivering a consistent, reliable supply of soybeans, but the best can still get better. Menzie says farmers should keep doing what they are doing.
“We’ve had four record years in a row on yield,” he says. “We’re obviously pretty good at what we are doing, and if we keep that up, we’re going to always be there as a key supplier for the world.”