Crop Insurance Today Second Quarter 2022 - 15

Soybeans
Global soybean production in 2021 declined
by just over five percent, declining from 368.12
million metric tons in 2020 to 349.37 in 2021. The
decline is attributable to a decline in production
in major exporting countries, falling by 12 percent
from 2020. Severe drought in the Southern
Hemisphere, particularly southern Brazil, Paraguay,
and Argentina, which account for around
53 percent of world production, took its toll on
soybean production in 2021. Reduced output in
Brazil in 2021 was largely responsible for the fall
in world output, down over 10 percent from the
previous year, falling from 139.5 million metric
tons to 120.71 million tons. Production in Paraguay
declined by over half, falling by more than
57 percent, from 9.9 million metric tons in 2020 to
4.2 million metric tons in 2021. Production shortfall
in Argentina also added to the decline, down
4.2 million metric tons in 2021, over nine percent
below production in 2020. In contrast, record
soybean production was reported in the United
States. Marginally higher yields and more than
four percent more harvested acres resulted in an
increase of around five percent from the previous
year, growing from 114.75 million metric tons in
2020 to 120.71 in 2021, accounting for 34.5 percent
of global soybean production in 2021.
Global soybean domestic use was virtually
unchanged in 2021, declining slightly by 901 million
metric tons, less than one percent from the
previous year. Slight increases in food and feed
use, up by 502 million metric tons, just over one
percent from the previous year, were offset by a
Figure 7
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Index of Farm Prices Paid and Received for Crops and Animals (2000-2021)
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Source: Crop Prices Received and Paid and Livestock Prices Received, USDA, NASS, Quick Stats https://quickstats.nass.usda.gov
Livestock Prices Paid, USDA, NASS Agricultural Prices, various issues, Page 5, https://usda.library.cornell.edu/concern/publications/c821gj76b?locale=en#release-items
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decrease in crush, declining 1,403 million metric
tons, about 0.5 percent from 2020. The reduction
in crush was primarily linked to a cutback in
soybean crush activity in China, with a decrease
of 4,000 million metric tons in 2021, down 4.3
percent from the previous year. The reduction
in China crush volume, especially in the fourth
quarter was reported to be linked to widespread
electrical outages hampering soybean crush.
The impact of the reduction in Chinese soybean
crush on global soybean use was dampened by an
increase in crush in the United States, increasing
by 2,205 million metric tons in 2021, a 3.5 percent
increase from 2020. In addition, an increase
in domestic feed use of 400 million metric tons
in 2021 helped cushion the blow from a decrease
in use in China.
The cutback in use of soybeans by China had
a negative effect on the United States exports of
soybeans. In 2021 the United States exports of
soybeans fell by 3.28 million metric tons, down
5.3 percent from the previous year, primarily
through declining shipments to China following
the slowdown in demand. Despite the reduction
in exports, prices remain strong in part
due to cross price effects from strong corn prices
and lingering market effects of record exports
in 2020 as China trade resumed and the swine
heard continued to recover from outbreaks of
African swine fever. By the end of 2021 increased
domestic use had outpaced the fall in exports,
along with a heavily depleted beginning inventory,
down 51 percent from the previous year,
ending stocks declined 8.5 percent from 2020.
Combined with larger total use the United States
ending stocks-to-use ratio declined for the third
year in a row, falling to 5.25 percent from 5.7
percent in 2020 providing further support for a
bullish price outlook. At the close of the year the
marketing year average price increased by almost
23 percent, reaching $13.25 per bushel, up from
$10.80 in the previous year. Continued low level
of ending stocks-to-use and expectations of
a recovery in the Chinese market coupled with
concerns over uncertain climatic conditions in
the Southern Hemisphere provide support for a
continuation of strong prices in the coming year.
Prices Received and Prices Paid
Strong commodity market prices are a cause
for optimism in the outlook for the overall farm
economy, however a continued rise in input prices
overshadows that outlook. Rapidly increasing
prices paid by farmers and ranchers offset the
potential gains from improved prices received
for crops and livestock. A continuing challenge
facing United States producers is illustrated in
the overall index of prices paid for inputs and
prices received for crops and livestock (Figure
7). In the case of crops, while commodity prices
move up and down, input prices trend steadily
upward. For livestock producers feed and related
input costs vary with the price of crops like
corn and soybeans, but while they have fallen
from the high levels in 2013 a renewed upward
trend began in 2019, and given the near-term
outlook, will likely continue. Livestock related
prices, however, have persistently failed to keep
pace with input prices since 2016.
Improved prices for crops are reflected in
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https://quickstats.nass.usda.gov https://usda.library.cornell.edu/concern/publications/c821gj76b?locale=en#release-items
Crop Insurance Today Second Quarter 2022

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