In 2009, the forces impacting our soybeans
are varied and unpredictable
and they can come at us from the
furthest reaches of the globe.
Managing the way those forces impact
our soybean returns, however, is much
closer to home.
The global soybean complex is constantly
changing and we must be prepared
to change with it. It helps to start,
in my mind, by looking at how much
change we ve already adapted to in
Canada.
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During my farming career, soybeans
have evolved from a southwestern Ontario
crop to today where they are firmly rooted
across the province and are established in
Manitoba and Quebec and beyond. Acreage
has exploded too, up eight-fold from 1976.
Both factors have revolutionized the
way our prices are determined, and we ve
had to handle more than one or two
bumps along the way.
Now we re having to adapt to global
change. The United States, Brazil,
Argentina and China have the biggest
production areas in the world. Worldwide,
the USDA December 2008 report estimated
that 2008/09 soybean production
will come in at 234.65 million metric
tonnes (mmt).
Of that, the U. S. is projected to supply
79.49 mmt, Brazil 59 mmt, Argentina
50.5 mmt, and China 16.8 mmt.
U. S. ending stocks for December were
205 million bushels, the same as in the
2007-08 crop year. World ending stocks
were 54.19 mmt, up slightly from the
53.10 mmt in December 2007.
These numbers serve as a scorecard for
market analysts and farmers measuring
supply and demand each month, but in
reality they must also be viewed within an
even larger context.
Soybeans are an oilseed and part of the
enormous world oilseed market, a market
that is made up not only of soybeans but
also of canola, sunflower seeds, flaxseed,
cottonseed and others.
Vegetable oils are all extracted from
these oilseeds, and to some extent all substitute
for each other. When you crush a
soybean, you get approximately 19 per
cent oil and 81 per cent soybean meal.
Traditionally, soybeans have been
grown for their protein with soybean oil
being the byproduct.
When you combine other oilseeds into
the projections, the December estimates
from the USDA point to world production
of 400.59 mmt, with the United
States producing 88.19 mmt of that. Brazil
produces 61.51 mmt and Argentina 55.24
mmt.
What s different here is the influence
of other countries such as India, which
produces 33.7 mmt of oilseeds and the
former Soviet Union states of Ukraine,
Russia and Uzbekistan, which are estimated
to produce 20.45 mmt.
Canada with its large canola component
in addition to soybeans is estimated
to produce 16 mmt (USDA Table 10.5
Major Oilseeds, Area, yield, and
Production). Of course, palm oil production
is massive too, and for some markets,
there s competition as well from
animal fats.
At the end of the day, soybean
demand is not only impacted by its own
variables, but also by the vagaries of the
world s vast stretch of agricultural production
areas.
Yet the soybean has its advantages.
Soybeans are one of the most efficient
choices for getting protein into a feed
ration, whether that ration be for chickens
and swine or for human consumption.
With an increasingly hungry world, this
puts the soybean in an enviable position.
