A new study from the National Oilseed Processors Association (NOPA) and the United Soybean Board finds the soybean sector has a $124 billion impact on the US economy. Based on data from crop years 2019/20 to 2021/22, the contribution includes $85.7 billion from soy production and $9.8 billion from soybean processing.
According to the study, more than 500,000 individuals are involved in soy farm decision-making. This includes 223,000 paid, full-time equivalent jobs and an additional 62,000 family members (beyond growers themselves) who reside on farms and are often integral to soybean farming operations. The total wage impact of the sector averaged $10 billion. Overall, the U.S. soy sector accounts for approximately 0.6 percent of the U.S. gross domestic product.
The authors note that although the direct effects of the soybean value chain on the broader US economy are significant, they fail to capture the ripple effect that soy has on supporting industries. These “indirect” effects include, for example, the facilities that process soybeans may employ only 50-100 people directly, but will employ many more on a contractual basis to keep the facility in working order.
Direct effects also fail to capture the economic activity stemming from expenditures of households drawing a salary from a given sector. These “induced” effects are typically smaller than indirect effects but can still add up to a sizable economic force, particularly in a local economy.
“As indicated by this study’s findings, the economic contributions of the soybean processing and refining sectors to the US economy are substantial, connecting soybean farmers with end users,” said Thomas Hammer, president of NOPA. The report notes that the sector’s contribution has also been boosted in the past couple of years by higher commodity prices and greater domestic processing. Below are more highlights from the report, which is available HERE.
- Economic benefits from the US soybean sector peaked in the reports most recent year of 2021/22, with a total contribution of $160 billion. The report notes that higher prices alone added +20% to 2021/22 values compared with the previous year and added over +50% to the impact when compared with 2019/20.
- The direct economic impact of the US soybean sector has averaged $63 billion during the past three years, up by around +$13 billion on the average in the previous 2019 report. However, the authors note that this masks a larger upswing in the most recent years, from $44 billion in 2019/20, to $81 billion 2021/22.
- An estimated 306,000 full-time equivalent jobs and resident farm family members were supported by the soybean sector in 2021/22, of which almost 68,000 are farm family members.
- Direct employment, which excludes family members, have averaged around 82,000 during the past three years. Once farm family members are included, US soybeans support, on average, around 285,000 people. The direct employment impact has climbed back from its 2019/20 low when lower output meant fewer full-time equivalent jobs needed.
- Soybean production represents by far the most important step in the soybean value chain in terms of its broader impact on the US economy. Soybean production represents close to 70% of the economic impact of the soy value chain and around 50% of the total paid jobs.
- As well as national results, the study also collected local data for all fifty states. The soybean sector’s total economic impact is highest in Illinois ($18.8 bil), Iowa ($17.0 bil), Indiana ($10.3 bil), Minnesota, ($10.2 bil), and Missouri ($8.4 bil).
