Soybean is the most significant seed legume in the world, contributing to 25% of global edible oil; around 2/3rds of the world’s protein concentrate for animal feeding. The soybean industry, which includes the manufacture and processing of soybeans, is one of the largest agricultural components in the USA, making a substantial contribution to its economy.
Soybeans are one of the most resilient and versatile plants in the United States, grown sustainably in several regions. Soybean production in the USA involves growing genetically modified or non-genetically modified beans using both organic and traditional farming practices to meet customer demand.
Its production is fast gaining popularity for easy adaptability to different agro-climatic conditions and the scope to manufacture several processed food products. Let’s explore how soybean production is sustaining the U.S. economy, both directly and indirectly.
Soybean’s Substantial Support to the U.S. Economy
Food manufacturing and agriculture are significant sectors of the U.S. economy, contributing 2.0% of the 2018 gross domestic product. Soybeans, with their varied uses, ranging from items for animal and human consumption to industrial stuff like paint, plastics, and bio-diesel, have become one of the most precious agricultural supplies in the U.S.
The country is the world’s leading soybean producer and 2nd leading exporter, with 90% of its oilseed production, while sunflower seeds, peanuts, flax, canola, and other oilseeds make up the remainder.
Since soybean production substantially supports the U.S. economy, U.S. soybean farmers and producers constantly strive to increase production to meet global requirements, despite low commodity rates. As per 2019 reports, the total economic impact of soybean production on the U.S. economy averaged $115.8 billion per year, including $7.96 billion from crushing.
The soybean industry benefits more than 39 U.S. states, including Arkansas, Colorado, California, Georgia, Delaware, Indiana, and Idaho.
Economic Growth in Rural Communities
The United States has consistently remained on top of the world’s top soybean producers list, harvesting over 4 510 million buses in 2023. Soybean farms create substantial job opportunities in the U.S. by hiring both year-round and seasonal workers.
And in both cases, workers may expect longer work hours during late fall and spring, when soybeans are planted and harvested. The minimum wages increase with time as workers advance to management positions or continuously offer services for several years.
As per reports, the United States soybean sector supports 357 000 people, including 280 000 individuals serving as paid, full-time workers; 17 250 employed at crush facilities and an additional 78 000 family members, excluding the growers, supported by U.S soybean production—wages earned from the sector average $11.6 billion, with $570 million coming from crushing activities.
The average business in U.S. soybean production now employs more workers than five years ago. There has been a 6.5% average increase in the number of people employed in the U.S. soybean production sector in the last five years between 2018 and 2023.
The industry employs 121 573 individuals, with the revenue per employee increasing on average over the previous five years.
Supports Related Industries
The soybean industry contributes to the U.S. economy through manufacturing and processing and even through multiplier effects, also known as induced and indirect effects. Soybean mills and processing units buy electricity, containers, natural gas, and other products for soybean processing.
But soybean farmers buy inputs, like herbicides, fertilizers, and equipment, to grow, harvest and market their crops. Such business purchases support other related industries, like processing facilities, equipment, and fertilizer manufacturers. These are indirect effects.
The induced effects of soybean production occur when the employees and owners within the industry use their income to buy products and services from different businesses across the region.
For example, an irrigation supply owner’s income from sales to soybean farmers is spent on healthcare and groceries, thus contributing to the local economy. These induced and indirect effects of soybean production jointly contribute to the U.S. economy.
Since the U.S. is the world’s 2nd largest soybean exporter after Brazil, it benefits the transportation sector also to a considerable extent. The U.S. farmers depend on transportation as an essential link between their markets and fields in the U.S. and abroad, thus benefiting the country’s transportation industry.
While most of the U.S. soybeans grown in the Corn Belt and Upper Midwest are exported through rail and barge transportation, local soybean demand in poultry and livestock sectors is serviced through rail and truck. This has improved the efficiency and competitiveness of the U.S. transportation industry.
Income for the Farmers
U.S. soybean production has largely helped improve the socio-economic condition of marginal and small farmers mainly because even under the minor agricultural inputs, climatic adversities, and management practices, the sectors bring in profitable returns for the farmers. Soybean is one of the most resilient agrarian commodities for the rain-fed season, as it has maintained its performance despite adverse weather conditions.
Soybean farming is beneficial for farmers in those regions of the U.S. where small-scale agricultural systems make up the entire food production landscape. Additionally, soybean’s symbiotic nitrogen fixation properties mean it is perfect for cultivating different types of soils in changing climates.
Also, U.S. farmers use monitors and GPS in their equipment to track inputs and yields, change application and seeding rates to square inches, and ensure they use the right amount of fertilizer, seed, and other information.
The Bottomline
The significance of soybean production to the overall U.S. economy has only grown with time. The production chain benefits the farmers, related industries, and people at various stages, from planting and growing to harvesting, processing, and exporting.
