Soy Export: How to Tap into the Growing Global Demand for U.S. Soybeans
Soybeans are one of the most important crops in the U.S. agriculture sector, accounting for nearly $27.4 billion in export value in 2021, a new record. The U.S. is the world’s largest soybean exporter, supplying about 40 percent of the global market. But how can U.S. soybean producers and exporters take advantage of the growing demand for soybeans and soy products around the world? Here are some tips and insights to help you succeed in the soy export business.
1. Know your target markets and customers
Different countries and regions have different preferences and needs for soybeans and soy products, depending on their consumption patterns, processing capacity, quality standards, and trade policies. For example, China is the largest importer of U.S. soybeans, mainly for animal feed and oil production, while Mexico is the second largest market, mainly for human consumption and food processing. The European Union, Egypt, Japan, Indonesia, Taiwan, and South Korea are also among the top 10 markets for U.S. soybeans in 2021, with varying demand for whole beans, meal, oil, and other products. It is important to understand the specific requirements and opportunities of each market and customer, and tailor your product offerings accordingly.
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2. Differentiate your product with quality and sustainability
U.S. soybeans have a reputation for high quality, consistency, and reliability in the global market, which gives them a competitive edge over other suppliers. U.S. soybeans also have a lower carbon footprint than other sources, thanks to the efficient and sustainable production practices of U.S. farmers. These attributes can help you attract and retain customers who value quality and sustainability in their sourcing decisions. You can also leverage the resources and programs of the U.S. Soybean Export Council (USSEC), which works to differentiate, elevate preference, and attain market access for U.S. soybeans in more than 80 countries.
3. Stay updated on market trends and trade policies
The global soybean market is dynamic and complex, influenced by many factors such as supply and demand, weather conditions, crop production, price movements, trade agreements, tariffs, sanctions, and other regulations. It is essential to keep track of these factors and how they affect your target markets and customers, as well as your own competitiveness and profitability. You can use various sources of information and analysis, such as the USDA Foreign Agricultural Service (FAS), which provides data and reports on global trade, production, consumption, stocks, and outlook for soybeans and other commodities.
4. Build relationships and networks with key stakeholders
Exporting soybeans is not a one-time transaction, but a long-term partnership that requires trust, communication, and collaboration among various stakeholders along the value chain. These include farmers, processors, traders, shippers, brokers, buyers, end-users, government agencies, industry associations, and non-governmental organizations. You can benefit from building strong relationships and networks with these stakeholders, who can provide you with valuable information, insights, support, and opportunities for your soy export business.
5. Seek assistance from experts and professionals
Exporting soybeans can be challenging and risky, especially if you are new to the international market or face unfamiliar situations or problems. You can reduce your risks and increase your chances of success by seeking assistance from experts and professionals who have experience and expertise in the soy export business. These include consultants, lawyers, accountants, bankers, insurers, freight forwarders, customs brokers, inspectors,
and others who can help you with various aspects of exporting such as market research, contract negotiation, financing, logistics, documentation, compliance, dispute resolution, and more.
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Soybean Export Trends in 2022
According to the USDA Foreign Agricultural Service, the value of U.S. soybean exports to the world reached a new record of $27.4 billion in 2021, up 7 percent from the previous year’s record . This was driven by higher unit values, which increased by more than 25 percent due to tight exporter supplies and strong demand from China . However, the export volume declined by 17 percent to 57.8 million metric tons, mainly due to lower shipments to China, the EU, and Thailand .
Soybean Export Outlook for 2023
The USDA Economic Research Service and Foreign Agricultural Service forecast that U.S. soybean exports will decline by 9 percent to 55.8 million metric tons in the marketing year ending in September 2022 (MY 2021/22) . This is because of reduced demand from China, where total imports are expected to drop by 3 percent due to higher prices and negative crush margins . On the other hand, import demand from other key U.S. trading partners such as Mexico, Egypt, Japan, and Bangladesh is projected to remain high, providing an opportunity for U.S. exports .
Soybean Export Challenges and Opportunities
The U.S. soybean industry faces several challenges and opportunities in the global market. Some of the challenges include:
- Competition from other major exporters such as Brazil and Argentina, which have lower production costs and larger harvests .
- Trade barriers and uncertainties such as tariffs, quotas, sanitary and phytosanitary measures, and biotechnology regulations .
- Environmental and social concerns such as deforestation, greenhouse gas emissions, labor rights, and animal welfare .
Some of the opportunities include:
- Diversifying export markets and products such as soybean meal, oil, and biodiesel .
- Enhancing quality and sustainability attributes such as protein content, oil composition, traceability, and certification .
- Promoting innovation and collaboration such as research and development, market intelligence, and trade promotion .
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