In its May 12 World Agricultural Supply & Demand Estimates report, U.S. Department of Agriculture analysts forecast record global soybean production for the 2023/24 crop year at nearly 410.6 million tons, up almost 11% from last year.  

If realized, this will be the largest year-over-year production increase in nearly two decades, shares Jason Grant, W.G. Wysor Professor of Agriculture and Director of the Center for Agricultural Trade at Virginia Tech. 

More than half the increase is estimated to come from increased yields in Argentina, after a historic drought. Meanwhile, USDA reports Brazil, Uruguay and Paraguay account from more than a quarter of production gains from increased plantings and higher yields across all three countries. U.S. farmers are forecast to plant acreage numbers similar to last year, but projections show higher yields. 

“There are always some ups and downs depending on the supply and demand and many different local conditions, says Jim Sutter, U.S. Soybean Export Council Chief Executive Officer. “Currency has challenged some markets limiting imports from what was normal and what is really needed.” 

Grant expects with the rebuilding of global grain and oilseed supplies that will normalize soon. 

“It’s not necessarily been a supply issue, but more of an affordability issue,” explains Grant, sharing that when you get in an uncertain macro-economic environment where money flows to the U.S. dollar, it puts pressure on the agricultural markets and farmers and ranchers. “This supply shift will help customers in Egypt, Bangladesh and Southeast Asia more easily afford U.S. Soy.” 

Sutter reminds that agriculture is a cyclical business and just as things tighten, they also loosen. This supply will help customers afford U.S. Soy, and we can look to see more demand growth on the whole. 

Sutter frequently talks about the role of conflict in the global soy complex and its impact, and just as the World Health Organization is rolling back its emergency status for COVID-19, Ukraine’s agricultural sector is rebounding.  

Grant shares that Ukraine with the help of the Black Sea Grain Initiative has been able to find alternative export routes and has mostly rebounded in supplying the Black Sea Region. 

It’s collaborations such as the Black Sea Grain Initiative and the willingness of countries — like China, which just approved its first gene-edited crop — to adopt technology and harness innovation that results in success. 

Sutter says: “We must continue to seek new partnerships and collaborate across the food and agriculture industry and stakeholders. Working together brings us a step closer toward achieving sustainability goals, reducing hunger, and feeding our global village. 

“None of us can do it alone – the world is no longer filled with scavengers or hunters – we all rely in some way on the global food supply chain!” 

USDA projects global soybean meal consumption to increase 4% in 2023/24, of which China accounts for nearly one-third of global consumption growth. Additionally, soybean oil consumption is forecast up 5%, with demand from food and industrial use by China. 

When we drill into U.S. figures, USDA projects U.S. Soy exports to be 1.1 million tons lower at 53.8 million tons on stronger domestic crush and greater global competition despite larger supplies. Furthermore, soybean supplies in 2023/24 are forecast higher from increased yield projections, which offset the lower carryin. Additionally, soybean crush is forecast at a record high driven by strong margins on high domestic soybean oil prices, and soybean stocks are forecast to be at their highest level in four years. 

Meanwhile, U.S. soybean meal exports are forecast at a record large, but strong domestic demand for soybean oil as a renewable diesel feedstock will keep U.S. prices at a premium and continue to limit exports. 

This story was partially funded by U.S. Soy farmers, their checkoff and the soy value chain. 

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