The Van Trump Report

US Soybean Production Costs Have Climbed More Than +150% Since 1997

From 1997 to 2018,  soybean seeding rates decreased from over 200,000 seeds per acre to about 157,000 seeds per acre, according to data compiled by Bryn Swearingen and Kate Vaiknoras at USDA’s Economic Research Service (ERS). At the same time, soybean seeds and other production costs have skyrocketed.

According to Swearingen and Vaiknoras, U.S. farmers spent an average of $19.72 per acre on soybean seeds in 1997, based USDA’s Agricultural Resource Management Survey (ARMS). That expense rose by more than +260% by 2023, when U.S. farmers were spending $71.03 per acre on soybean seeds. Meanwhile, total production costs also increased from $245.83 per acre in 1997 to $632.22 per acre in 2023, a +157% increase.

During the same time period, the researchers note that seeding rates fell in every major soybean-producing State. The leading soybean-producing States of Iowa and Illinois fell by -18% and -35%, respectively. Whereas some smaller producing States, such as Mississippi and Tennessee, saw less than a -10% decline in soybean seeding rates. The researchers say the differences in seeding rates may be attributed to regional differences in technology use and planting methods.

For reference, the average US soybean yield in 1997 was reported at 38.9 bushels per acre vs. the current record US average yield of 51.9 bushels per acre harvested back in 2016. In the seven years following 2016, the average US yield has been above +50 bushels per acre four times and sub-50 bushels per acre three times, so no real trend of moving aggressively higher. 

Swearingen and Vaiknoras attribute much of the decline in seeding rates to “changes in planting methods, seeding technologies and seed quality.” Notably, in the mid-1990s, seed companies introduced genetically engineered (GE) soybean seeds.  The adoption rate forGE soybean seeds in 1997 ranged from 8% to 21%. By 2002, adoption had jumped to 60% to 96%, and by 2006 and in remaining survey years, U.S. farmers had planted GE soybean seeds on at least 93% of acres in all regions.

The authors point out that in more recent years, farmers can purchase soybean seeds with stacked resistance to multiple herbicides, while precision agriculture has also become increasingly popular. These
technological advancements have increased the quality and reliability of the seeds but the researchers say that these advances also may have made it more costly to grow soybeans.

It’s always interesting to know how you match up against the competition, which in the case of US soybeans means Brazil. According to the folks at farmdoc*, total direct costs for soybean production in Mato Grosso (Brazil’s biggest soybean production state)  have increased from $274 per acre in 2016 to $390 in 2023. According to farmdoc:

“Overall, soybean production costs have been higher in Mato Grosso than in central Illinois since 2016. Despite the higher costs, Brazil’s operating margins remain positive because of high commodity prices in recent years, robust global demand, and a favorable exchange rate for Brazilian exporters.”

A large chunk of Brazil’s higher costs are tied to fertilizer, which for Mato Grosso soybeans increased from $88 per acre in 2016 to $187 per acre in 2023, an average annual growth rate of +16.4%. That compares to central Illinois where the authors say fertilizer costs increased at an annual rate of +12%, from $49 to $95. Read the full post HERE.  

(Sources:” Comparing Direct Costs of Soybean Production in the United States and Brazil” farmdoc daily (13):215, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, USDA Oil Crops Outlook May 2024)

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