China’s soybean demand will eat higher U.S. yields

Soybean production in North America has likely started to surge, but that is OK because China’s demand will keep pace.

Those thoughts were floating around the Grain World conference Nov. 15, as analysts and grain trade players tried to spot future trends.

Bill Lapp of Advanced Economic Solutions said he suspected soybean yields have begun diverging from their long-term growth trend, with increasing gains in recent years.

“It does appear that, even with sub-optimal weather, we’re getting a boost in yields,” said Lapp during an oilseeds outlook panel.

“I think we might be in a new trend.”

U.S. soybean yield grains have trailed behind impressive gains in corn, with average yields in the mid-1980s of 32 bushels per acre reaching 42 bu. per acre by the early 2010s.

However, since 2013 several crops have surpassed that trend line, reaching to the 50 bu. level.

Crop production analyst Kurt Ahrens of Grainbot had earlier predicted that world soybean yields will grow by about 25 percent in the next 33 years.

Continued soybean production growth will depend on moving ever greater quantities of the crop, but Felix Muller of COFCO said that shouldn’t be a problem.

Chinese people are eating ever more meat and protein products, and that will demand a continued growth in soybean imports for feed.

“When people ramp up their consumption of meat a little bit more similar to the United States or Europe, you have a massive demand growth on top of what we see now,” said Muller.

And what is seen now is steady growth in soybean import demand, as a growing Chinese feed industry sources raw materials from the world.

Chinese consumers already eat similar amounts of pork as Europeans, but they eat only a fraction of chicken or dairy products that Europeans and Americans eat.

Muller said even the slowdown in Chinese economic growth hasn’t crimped the growth of Chinese soybean imports.

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