The Trump administration’s trade war has suddenly made soybeans a hot commodity in policy circles. Data from Google Trends, for instance, shows searches for “soybeans” in the United States are near an all-time high.
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.
Those bean pods are typically left to sit on the plants to dry out and brown up through the autumn. Once the leaves fall off, they’re ready to be harvested. Soybeans are harvested using a large piece of equipment called a combine, which cuts the plants and separates the now-dried beans from the pods.
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.
The big culinary use, however, soy-derived oil, which is now the primary ingredient in many products labeled as “vegetable oil” in the United States. So if you’re wondering if you, personally, have ever consumed any soy products, the answer is almost certainly a hearty “yes.”
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.
Only about 15 percent of the soy crop goes to human consumption, primarily in the form of cooking oils, according to the USDA. Another 5 percent goes to biodiesel. The remainder gets split among a variety of uses, such as industrial applications and organic foods.
3. How much of it do we produce?
A lot — 89.6 million acres in 2018, to be precise, making it the United States' biggest crop by acres planted. To put that figure in perspective, 86.9 million acres is larger than the total area of New Mexico, the country’s fifth-largest state.
This year, in fact, soy acreage surpassed corn acreage for the first time since 1983.
Dollar-wise, American farmers produced about $41 billion worth of soy in 2017, according to the USDA, making it the second-biggest cash crop behind corn. For perspective, $41 billion is about three times the total annual revenue of the NFL.
4. Where do we grow it?
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.
For that reason, the administration recently announced a package of $12 billion in aid to farmers caught in the crossfire of the trade war.
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.”