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Market Outlook
Commodity Policy
Trade
Biotechnology
Peanuts
Market Outlook
For information on current and previous baseline projections
for soybeans and soybean products, see the market
outlook chapter.
Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices (May 2008) explores the many factors that have contributed to the runup in food commodity prices over the last 2 years.
Ethanol
Expansion in the United States: How Will the Agricultural
Sector Adjust? (May 2007) examines effects of the expansion
in U.S. ethanol production. Market impacts extend well
beyond corn, the primary feedstock for ethanol in the
United States, to supply and demand for other crops,
such as soybeans and cotton, as well as to U.S. livestock
industries. As a consequence of these commodity market
impacts, farm income, government payments, and food
prices also change. See narrated
slideshow for
an overview; see related Amber Waves feature U.S.
Ethanol Expansion Driving Changes Throughout the Agricultural
Sector (September 2007).
The Changing Face of
the U.S. Grain System (February 2007) discusses the evolving nature
of U.S. grain handling and marketing, which is increasingly
marked by product differentiation and market segmentation.
More specialty crops now require either some form of
segregation or full-scale identity preservation to
keep them separate from conventional commodities. Market
segmentation within the grain system is driven by the
need to preserve market value or ensure product purity.
The Value of Plant Disease
Early-Warning Systems: A Case Study of USDA's Soybean
Rust Coordinated Framework (April 2006) examines USDA's coordinated
framework for soybean rust surveillance, reporting, prediction,
and management, which was developed before the 2005 growing
season. The study assesses the value of the information
tool to farmers and factors that influence that value.
The information's value depends most heavily on farmers'
perceptions of the forecast's accuracy. The study finds
that the framework's information is valuable to farmers
even in a year with a low rust infection such as 2005.
Economic
and Policy Implications of Wind-Borne Entry of Asian Soybean
Rust into the United States (April 2004) examines how the potential
economic impacts of soybean rust in the United States
will depend on the timing, location, spread, and severity
of rust infestation and on how soybean and other crop
producers, livestock producers, and consumers of agricultural
commodities respond to this new pathogen.
How Does
Structural Change in the Global Soybean Market Affect
the U.S. Price? (April 2004)concludes that South American soybean
production, combined with the U.S. soybean stocks-to-use
ratio, provides a strong basis for forecasting U.S. soybean
prices. The article estimates that a 1-percent increase
in South American soybean production decreases U.S. soybean
prices by about one-quarter percent.
Strong
Competition and Rising Prices Confront U.S. Soybean Exports
(September 2002) assesses the prospects for the 2002 soybean crop. Crop
rotations, improved net returns for corn, and economic
and weather conditions in Western States encouraged greater
planting of corn, resulting in the lowest US soybean area
since 1998. Lower soybean supplies will promote a hard
retreat in US soybean exports. Higher US prices will erode
the ability to compete with likely aggressive export campaigns
by Brazil and Argentina.
Stable
Field Crop Supplies Forecast for 2002/03 (June/July 2002)
examines USDA's first projection of production and prices
for the next marketing year. Supplies of most major US
field crops are expected to rise despite planted acreage
similar to or lower than last year. Production gains are
projected for corn and oats, while wheat and cotton output
is expected to decline. For some crops, higher use may
offset downward pressure on farm prices.
Soybean
and Cotton Plantings to Decline in Favor of Corn in 2002 (May 2002)
reviews USDA's Prospective Plantings report for
the eight major US field crops (corn, soybeans, other
feed grains, wheat, cotton, rice, minor oilseeds, and
hay). Planting intentions are projected at 248.3 million
acres, nearly identical to last year's despite widespread
weak price signals.
Characteristics and
Production Costs of US Soybean Farms (April 2002) reports that
average production costs of US soybeans ranged from $2.13
to $6.00 per bushel. Heartland, West, and Northern Crescent
producers had lower production costs per bushel than Mississippi
Portal and Southeast producers. Producers in higher sales
classes and producers with 250-750 acres of soybeans had
lower production costs than other soybean producers. Off-farm
income was an important source of household income for
many soybean producers.
The Soybean Processing
Decision (December 2001) states that the gross soybean processing
margin (the gross return per bushel of soybeans processed)
is the main decision variable that processors use in deciding
when and if to make binding commitments to process soybeans
on future dates.
Strong
US Soybean Demand Keeps Pace With Record Supply (September 2001)
reports that strong soybean demand is warding off burdensome
US surpluses, despite a relatively large harvest in fall
2001. Robust soybean imports by China and the European
Union have continued to support foreign demand for US
exports.
An
Assessment of a Futures Method Model for Forecasting the
Season-Average Farm Price for Soybeans (October
2000)
presents a method for forecasting soybean farm prices
using futures prices and assesses the historical accuracy
of this forecasting method with USDA forecasts.
Soybean
Prices Plummet to Lowest in 27 Years
(September 1999) reviews factors underlying low soybean prices projected
for 1999/2000, including large domestic production and
lagging export demand, and addresses the role of the soybean
marketing loan payment program on 1999/2000 plantings.
Soybean
Prices Plunge on Big World Harvests, Weaker Demand
(September
1998) highlights how greater world supplies of soybeans and
weaker demand have combined to produce a dramatic market
turnabout from 1997/98, as per-bushel soybean prices at
the farm level are forecast to slide from $6.45 to $4.85-$5.85
in 1998/99, the lowest level since 1986/87.
Rethinking
the Soybeans-to-Corn Price Ratio: Is It Still a Good Indicator? (April 1998)
examines the role of the price ratio in explaining the
mix between corn and soybean plantings, and the deficiencies
of the ratio as a guide for planting decisions, particularly
after the 1996 Farm Act.
Commodity Policy
Valuing Counter-Cyclical
Payments: Implications for Producer Risk Management and
Program Administration (February 2007) illustrates an improved method
for estimating counter-cyclical payment rates by accounting
for the variability in market price forecast errors. Forecasters
and producers can use the model to calculate the probability
of having to repay advanced counter-cyclical payments.
Soybean
Backgrounder (April 2006) addresses key domestic and international
market and policy developments that have affected the
U.S. soybean sector in recent years. It provides an analysis
of the competition among crops for domestic farmland and
the international supply and demand for soybean products.
The report also covers farm program costs and contains
a profile of operating and financial characteristics of
U.S. farms producing soybeans.
The 2002 Farm Act: Provisions
and Implications for Commodity Markets (November 2002) provides an
initial assessment of the legislation's effects on agricultural
production, commodity markets, and net farm income over
the next 10 years. Results indicate that commodity market
impacts are fairly small. Net farm income is projected
higher than under a continuation of the 1996 Farm Act,
largely reflecting an increase in government payments.
Soybeans: Background
and Issues for Farm Legislation (August 2001) addresses considerations
in the 2002 farm bill debate, including market conditions,
policy proposals, trade agreements, and the interactions
between policy and markets.
Analysis of the US Commodity
Loan Program with Marketing Loan Provisions (April 2001) illustrates
how marketing loans have enabled farmers to attain, on
average, per-unit revenues that exceed commodity loan
rates and assesses the impacts of marketing loans on production,
use, and prices.
Supply Response Under
the 1996 Farm Act and Implications for the US Field Crops
Sector (September
2000) analyzes the effects of planting flexibility
under the 1996 Act on regional and aggregate planted acreage,
crop mix, and farm prices for major field crops.
Impacts of
the US Marketing Loan Program for Soybeans (October 1999)
identifies effects of the program on acreage, prices,
and exports.
Provisions of the Federal
Agriculture Improvement and Reform Act of 1996 (September 1996) details
changes to US agricultural policy mandated by the 1996
Act, including program payments, acreage restrictions,
export and conservation programs, and other provisions.
Trade
The Role of Policy and
Industry Structure in India’s Oilseed Markets (April
2006)
reports that rising incomes in India are likely to lead
to continued strong growth in that country’s demand
for oils and oil meals. Extensive policy intervention
affects Indian oilseed production, trade, and processing.
Current high tariffs on oilseeds and oil are of little
benefit to Indian producers while imposing high costs
on consumers. Policy reform, particularly liberalization
of oilseed imports, could improve producer and consumer
welfare and have a significant impact on trade.
China's Soybean
Imports Expected To Grow Despite Short-Term Disruptions (October 2004)
assesses China's demand for soybeans and soybean products.
Liberalization in production and trade policies has facilitated
the country's booming soybean imports, though some recent
policy changes have disrupted imports. Despite short-term
disruptions, however, China's demand for soybean and soybean
products continues to look strong and provides favorable
opportunities for US soybean exports.
China: A Study of Dynamic
Growth (October 2004) assesses China's rapid economic growth since
1978, which has been driven by high rates of investment,
gains in productivity, and liberalized foreign trade and
investment. China's growth is likely to continue, but
the Chinese economy faces some potentially unsustainable
pressures, including possible currency appreciation, rising
rural-urban inequality, unemployment, banking reforms,
and an unusual combination of inflationary and deflationary
tendencies.
The Poultry
Sector in Middle-Income Countries and Its Feed Requirements:
the Case of Egypt (December 2003) examines the interaction between
domestic feed and animal production and meat and feed
imports. Egypt, a country with little potential for growing
feed, faces the issues many middle-income countries experience.
India's
Edible Oil Sector: Imports Fill Rising Demand (November 2003) examines
factors underlying India's emergence as the world's leading
importer of edible oils and evaluates US export prospects.
Income and population growth, trade policy reforms, and
domestic agricultural policies affecting the productivity
of India's oilseed farmers and processing sector have
contributed to increased consumption and import demand.
Oilseed
Policies in Japan (December 2002) describes the policies used by Japan
to support its oilseed producers and processors. Tariffs
on vegetable oils protect oilseed crushers. Strong subsidies
to divert land from rice into soybeans have led to increased
soybean production.
Livestock
Feeding and Feed Imports in the European Union—A Decade
of Change (July 2002) examines events and policy changes in the
livestock sectors of the European Union during the 1990s
and their impacts on trade in feedstuffs. Lower grain
prices and a declining euro together with several animal
disease epidemics resulted in significant increases in
the feeding of grains and oilseed meals and a reduction
in the feeding of nongrain feed ingredients.
Agriculture in Brazil
and Argentina: Developments and Prospects for Major Field
Crops (December 2001) points to the increasing competitiveness of
these countries in world oilseed and grain markets. For
each country, the potential for future market share gains
will depend on exchange-rate movements, overall economic
stability, infrastructure improvements, and further policy
reform.
Argentina
and Brazil Sharpen Their Competitive Edge (September 2001)
describes how the combination of abundant land, favorable
climates, and economic and political reforms has made
both countries increasingly competitive with the United
States in grain and soybean trade.
Prices
for Bumper US Soybean Crop Hinge on China's Imports (September 2000)
discusses China's import demand as a key determinant in
demand for US and South American soybean crops in 2000/01
and analyzes US production and its impact on world soybean
prices.
China's
WTO Accession Would Boost US Ag Exports and Farm Income (March 2000)
analyzes potential gains in US soybean product exports
from trade liberalization by China.
Upcoming World
Trade Organization Negotiations: Issues for the US Oilseed
Sector (October 1999)
reviews accomplishments of the WTO Agreement on Agriculture
in the global oilseed market and examines outstanding
issues, such as increased market access, reduction in
domestic government support programs and export subsidies,
tighter disciplines on state trading enterprises, and
uniform world trading rules and regulations for genetically
engineered commodities.
Despite
Rise of Market Forces, Continued Government Intervention
in China's Soybean Economy Adds Uncertainty in World Oilseed
Markets (November 1998) itemizes recent Chinese agricultural policy
changes (in the 1998 Oil Crops Situation and Outlook
Yearbook).
Biotechnology
The First Decade of Genetically
Engineered Crops in the United States (April 2006) reports that
over the past 10 years, farmers have widely adopted genetically
engineered (GE) varieties of corn, soybeans, and cotton.
While consumer concerns about foods contain GE ingredients
vary by country—European consumers are the most
apprehensive—those concerns have not had a large
impact on the market for GE crops in the United States.
Genetically
Engineered Crops: US Adoption and Impacts (September 2002)
examines the use of genetically engineered (GE) crops
in the United States since their introduction in 1996.
Soybeans and cotton with herbicide-tolerant traits have
been the most widely and rapidly adopted GE crops, followed
by insect-resistant cotton and corn. Analyses by USDA's
Economic Research Service and others indicate economic
benefits to many farmers adopting first-generation GE
crops.
Estimating
Farm-Level Effects of Adopting Herbicide-Tolerant Soybeans (October 2001)
compares and evaluates the farm-level effects of adopting
herbicide-tolerant soybeans. PDF
version with high resolution map
(this is a large file that may take time to download).
Genetically
Engineered Crops: Has Adoption Reduced Pesticide Use? (August 2000)
outlines differences in pesticide use for biotech and
nonbiotech soybeans as well as for other genetically engineered
crops.
Genetically Engineered
Crops for Pest Management in US Agriculture (May 2000) reports
that increased adoption of herbicide-tolerant soybeans
between 1996 and 1998 led to small but significant increases
in yields, no changes in net returns, and significant
decreases in herbicide use.
Biotechnology:
Implications for US Corn and Soybean Trade(April 2000)
discusses uncertainties in marketing bioengineered products
abroad and the potential impact on US agricultural trade.
Biotechnology:
US Grain Handlers Look Ahead(April 2000)
discusses potential costs of crop segregation and how
the US marketing system has responded to changing demands.
Value-Enhanced
Crops: Biotechnology's Next Stage (March 1999)
discusses enhanced end-use characteristics of emerging
seed technologies.
US
Farmers Are Rapidly Adopting Biotech Crops
(August 1998) discusses the development and traits of biotech crops
and the pace of adoption by producers in the United States
and other countries.
Peanuts
Peanut Backgrounder (October 2005) addresses key domestic and international market and policy
developments that have affected the U.S. peanut sector
in recent years. The report contains information on supply
and demand developments, domestic and trade policy, a
peanut farm profile and financial characteristics, and
addresses issues and opportunities to be considered in
domestic agricultural policy deliberations.
US
Peanut Sector Adapts to Major Policy Changes (November 2004) analyzes
pressures that led to a striking change in peanut policy
in the 2002 Farm Act and how farmers have fared since.
Although the circumstances of peanut producers are unique
in many ways, their experience can offer insights for
those contemplating similar policy changes for other crops,
such as tobacco. For the full report,
see Peanut
Policy Change and Adjustment Under the 2002 Farm Act
(July 2004).
Peanut
Consumption Rebounding Amidst Market Uncertainties (March 2002)
tracks market and policy-related developments that have
placed downward pressure on peanut farm prices and cash
receipts, including changes to the domestic support program
stemming from the 1996 Farm Act, the gradual opening of
the domestic market to imports under international trade
agreements, and the challenge of increased competition
in export markets from China.
Issues Facing
the US Peanut Industry During the Seattle Round of the
World Trade Organization (October 1999)
discusses key features of the US peanut program relative
to US commitments to the WTO on market access, domestic
support programs, and export subsidies.
U.S. Tariff-Rate
Quotas for Peanuts (October 1999)
traces the development of the U.S. peanut tariff-rate
quota (TRQ) from its Section 22 origins and explains how
the U.S. peanut TRQ operates. It also examines the influence
of the TRQ on the volume, timing, and country origin of
U.S. peanut imports; the U.S. TRQ for peanut butter and
paste; the U.S. NAFTA TRQ for peanuts; and various ways
of liberalizing TRQs.
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