What Is The Evolution Of Soy Demand Over Time?

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Around the world, there has been a surging demand for soy. It is one of the most traded commodities globally, produced in tropical and temperate regions, and serves as a critical source of protein and vegetable oils.

Since the 1950s, global soybean production has increased more than 15 times. The United States, Argentina, and Brazil produce about 80% of the world’s soy. China imports the most soy and is expected to increase its commodity import significantly.


Soybean crops have been traced back to China as old as the 11th Century B.C. But it was only in 1804 that American literature mentioned the word soybeans when global soy use increased.

Experts believed soybeans were only introduced to the American colonies in 1765 as “Chinese vetches.” Interestingly, the first reference of soybeans was tested in an agricultural school in the U.S. only in an 1879 report from Rutgers Agricultural College, based in New Jersey. Most of the early soybean production in the country was forage rather than harvested for seed.


Expansion of Soybean Production to the U.S.


Soybean acreage started to increase before World War II as there was a disruption of trade routes for oils and edible fats. It became famous as a new crop in the United States as there was an immediate need for soybean oil and meal.


In addition, soybeans benefited other crops in a crop rotation, and their culture was very similar to corn. Following World War II, soybean production moved from the southern USA into the Corn Belt. Finally, the U.S. started to dominate soybean production all through the 1950s, ’60s, and ’70s. The USA grew more than 75 percent of the world’s soybean crop.


In 1908, the first shipment of soybeans to the West was sent by Japanese firms from Manchuria, China, to England. After that, during the next two decades, soy oil exports and soybeans from Manchuria to Europe increased rapidly. It is important to note that soybean production in China almost stayed constant during this period.


Soybean Production in China

Although soybeans are grown throughout China, the most significant production is in the eastern part of North China, especially in Shantung, Hopeh, Shansi, Honan, Anhwei, and Kiangsu.

The fall in production from 1936-1944 was due to extensive internal conflicts over large areas of China, but by 1948 production had recovered. By 1979, the combined total of 7.5 million tons for China and Manchuria in 1950 had risen to 14.5 million tonnes. This was an increase of 193% in 29 years and an average growth of 6.6% yearly.

From ancient times, effectively all Chinese soybeans have been used in China. In the 1950s, experts estimated that 55% of the crop was used for food. Soybean is a significant source of protein in the Chinese diet.


Soybean Production in Manchuria


Although Manchuria has been a significant center of soybean production since the early 1900s, its production has never surpassed China’s. Although it almost equaled China’s production for one year in 1930. Manchuria’s role as a major soybean producer and processor can only be understood in the larger context of its tumultuous history.


Although Manchuria has been a significant center of soybean cultivation since the early 1900s, its production has always remained within that of China proper, even though it almost equaled China’s output for one year in 1930.


Soybean Benefits


Over three-quarters of global soy is fed to livestock for dairy and meat production. Most of the rest is used for industry, biofuels, or vegetable oils. You would be surprised to know that only 7 percent of soybean is used directly for human food products such as soy milk, tofu, edamame beans, and tempeh. Soy is a food item often promoted as a substitute for meat and dairy – such as tofu and soy milk, but it is driving deforestation. It is a common misconception.


How Has The Demand For Soy Changed Over Time?


Global soy production has exploded over the last 50 years. Today’s global soybean production is more than 13 times higher than in the early 1960s. Even since the year 2000, the production of soy has doubled. In the 1960s, farmers produced only 20 to 30 million tones annually. The figure now is 350 million tones.


You can increase agricultural production in two ways. Firstly, by improving its yields. Secondly, by expanding the cultivated land. Over the years, many countries have seen yield gains, but the expansion of croplands usually drives these production increases. Unfortunately, some of these croplands have been at the expense of forests.


Which Countries Produce the Most Soy?


According to statistics, global soy production has increased rapidly over the past 50 years. But to understand if it has become a high environmental cost, you must understand where this growth comes from.

The distribution of soybean production is spread across the world. Most of the world’s soy comes from the U.S. and Brazil. They together produce more than two-thirds, i.e., 69 percent of global soy production.


Both these countries produce almost the same amount. In 2018 the U.S. produced approx. 123 million tones and Brazil 118 million tones. These countries account for around one-third of the global production of soybeans. The other major producers are Argentina, which accounts for about 11 percent.


There has been a significant change in soybean production in the U.S. and Brazil. The US has been a considerable soy producer for a few decades, so its growth in recent decades has become much slower than Brazil. It is also essential to understand that these countries are the potential drivers of deforestation.


Bottom Line


It would be best to understand what products have been driving soybean growth. When we mention soybean, we often think about foods such as soy milk, tofu, tempeh, or edamame beans. They are also used as dairy and meat substitutes.

Switching from meat to a high-protein alternative such as tofu or from dairy to soy milk is good but worse for the environment. But surprisingly, only a tiny percentage of global soy is used to prepare these products. Over three-quarters are used as feed for livestock. Over one-third or 37 percent, of global soy, is fed to chickens and other poultry. In addition, one-fifth to pigs and 6 percent to aquaculture. Very little, only 2 percent, is used for beef and dairy production.