Soybean Exports Set Records in 2022 and a Look Forward

Numerous positive accomplishments made the 2021-2022 marketing year one to remember for U.S. soybeans. U.S. Soy’s combined exports (whole soybeans, meal and oil) achieved a record value of $40.42 billion, up 17% year over year. Export volumes reached 71.79 million metric tons — the second highest on record, according to the USDA Economic Research Service and Foreign Agricultural Service (source). The questions for many soybean farmers are what is going to happen this year and what factors are going to affect the global commodity market? When examining the global soybean marketplace, there are several key factors to watch closely.

One impactful item to watch is the expansion of crush facilities. The soybean processing industry is expected to grow and expand over the next few years, and this change is expected to increase opportunities for soybean consumption. Expanding crush capacity provides additional places for farmers to sell their beans while providing more soybean meal and oil for domestic and international markets.

More specifically, the soybean oil market is being driven largely by the growth in renewable diesel. To meet the demand for crush, capacity in the U.S. must grow. Meeting crush demand will contribute to long-term growth of the marketplace and increase prices farmers receive for their grain.

Another consideration in the upcoming year will be the production capacity from South America and resulting export sales to China. Farmers are keeping a close eye on South America as they continue to grow as our largest grain and livestock export competitors. Farmers in Argentina and Brazil have struggled through severe drought in recent years due to the effects of La Niña.

Despite drought, Argentina and Brazil are expected to have harvests that contribute significantly to the world market.

Because of these events in South America, markets are telling farmers they should plant soybeans this year, according to Mac Marshall, USB vice president of market intelligence. “Farmers are going to be managing both agronomic and economic needs. Increased demand for soybean oil in the wake of challenges from palm, canola and sunflower oil production is creating an opportunity for soybean oil to fill the oil demand. There’s also been an aggressive effort to utilize soy oil as a feedstock to run facilities producing renewable fuels. The market is constantly adjusting prices to accommodate for these changes.”

In addition to growing conditions in South America, Chinese decisions on importing grain are an important consideration. China has traditionally been our largest U.S. soybean export customer.

“In the fall of 2020, the U.S. had pulled through the trade war, and China was making large purchases. With current global challenges, the war in Ukraine and drought conditions in countries that traditionally bring a lot of soybeans to the world market, China will need to continue importing soybeans for animal feed,” said Marshall.

It is noteworthy that this year, U.S. Soy commemorated its 40-year partnership with the Chinese agriculture industry. That relationship, nurtured through the years, continues to ensure that U.S. soybeans are in demand as a reliable, high-quality product.

While China looks to remain a strong export destination for U.S. Soy, USB and USSEC have worked to diversify exports to markets around the world.

“Most people don’t realize that Egypt is the United States’ fourth-largest export destination for U.S. soybeans. Ecuador is a large importer of soybean meal. With Brazil being China’s largest soybean supplier now, we have done a good job of seeking other markets to sell our grain and meal,” said Marshall. “With the increase in demand for soybean oil, we have a large amount of high protein meal to export. Right now, we export about 12 million metric tons of meal.”

With issues ranging from the war in Ukraine to weather conditions around the world, there are a lot of variables to consider. Marshall advises: “Understand what is unfolding beyond our fences and beyond our domestic borders. Have those critical conservations on what is impacting our prices and ask the right questions. Talk about what is unfolding in China and South America and what is happening domestically to not pit commodity versus commodity or country against country.”

USB, USSEC and ASA share a long-term commitment to innovation, sustainability, service, collaboration, consistent investment and the long-term impact of the soy checkoff to create value for all its stakeholders. Information on trade and exports can be found on the USB website, USSEC and ASA’s websites and the USDA website.

USB has invested in several programs to ensure efficient access and bolster international trade. USB funded research, analysis and design costs of the Port of Grays Harbor’s Expansion and Redevelopment Project. The terminal, located in Aberdeen, Washington, plays an important role in international exports. In 2019, the checkoff funded research, analysis and design costs related to dredging the lower Mississippi River to ensure this vital waterway remains a viable export option for Midwestern states. And in 2021, the checkoff funded pre-engineering and design work to maintain Lock and Dam #25 on the upper Mississippi River.

No one has a crystal ball to predict with 100% certainty what the future will bring for soybean exports. Soybean farmers, through their checkoff, have had tremendous successes — which are paving the way toward a bright future.