Soybean Backgrounder

U.S. soybean plantings peaked at 75.2 million acres in 2004, pushing output and use to record levels. Future increases in acreage and production, however, could be limited by competition for area from other U.S. crops, possible constraints on yield growth from changing rotations and new diseases, and increasing foreign competition. The U.S. share of global soybean and soybean product exports has steadily diminished due to the phenomenal growth of foreign soybean output and exports, particularly by Brazil and Argentina. The development of nontraditional soybean uses (such as biodiesel) and growth in demand for food use could provide some support to the U.S. soybean sector. In 2004, at least three-quarters of all soybean-producing farms had farm operations that were considered profitable. Since 2002, government payments to the soybean sector have been relatively small, consisting primarily of fixed direct payments. Domestic market conditions, Federal budget deficits, and multilateral trade negotiations will be importan