1. So, uh, what are soybeans?
As the name implies, soy is a member of the bean family. It grows in short leafy bushes that flower and produce fuzzy green pods, each typically containing about three beans.
The final harvested product is a small dry bean resembling a brown version of a dried pea.
2. So, what are they used for?
Most people encounter soy through any number of food products. Tofu is made from soybeans. So is soy sauce, obviously. Edamame, the beans you can get at many grocery stores and Asian restaurants, are a type of soybean. There’s soy milk. Soy nuts. Soy ice cream.
Here’s the confusing thing, though: Many of the soy products you eat are actually made with imported soybeans. The stuff American farmers grow here? Most of that gets put to other uses.
According to the U.S. Department of Agriculture, for instance, over 70 percent of U.S. soybean production gets used for animal feed. In the feed sector, poultry farmers are the biggest consumers of soybeans, followed by pigs, dairy cows, beef cattle and aquaculture.
3. How much of it do we produce?
There’s a belt of heavy soy production running from the Red River Valley along the Minnesota-North Dakota border, and heading down through the eastern Dakotas, Iowa, Illinois, Indiana and Ohio, according to the USDA Agricultural Census, which was last conducted in 2012.
Another significant region extends around the Mississippi River as it heads down from Missouri to Louisiana. And there’s also some production from Maryland’s Eastern Shore and down through the Carolinas.
5. So, what do tariffs have to do with any of this?
Here’s the thing: According to USDA data, nearly half of U.S. soy production gets exported overseas in any given year. If other countries decide to either reduce their U.S. soy imports or slap on tariffs in response to tariffs of our own, that could have economic ripple effects not just for American soy producers but also for the other industries, such as beef and poultry, that rely on soy.
That’s why we’re hearing so much about soy in the news lately. Farmers are now caught in a tug-of-war between the Trump administration, which believes putting tariffs on foreign goods will ultimately be good for U.S. consumers and producers, and other nations, which are retaliating with tariffs of their own.
6. What’s all of this doing to soybean prices?
Soybean prices, already low before the Trump administration announced $34 billion in tariffs on Chinese goods, recently fell to a 10-year low.
Data compiled by MacroTrends shows that overall, the price per bushel for U.S. soybeans is down by close to 20 percent since Trump took office in January 2017.
The White House has sought to ensure farmers and consumers that any pain from the tariff fight will be “short-term.”