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FOREWORD

This publication on soybeans is the first of a series of publications dealing with the nature of international trade in different agricultural commodities important to Alabama. Future publications in this series are expected to deal with other commodities in as timely an order as possible, considering the nature of trade issues and policies most important at the moment. Soybeans was chosen first because it represented the most important Alabama agricultural commodity affected by international trade. Work on this publication was conducted under Project Ala.-550 of the Alabama Agricultural Experiment Station entitled "Impact of International Trade on Alabama Agriculture." The objectives of this project are to: 1. Determine the present and potential impact of international agricultural trade, including trade policies and issues, on the Alabama economy in general and on selected agricultural commodities important to Alabama. 2. Assess the current competitive position of the Port of Mobile relative to other ports and its potential position after completion of the Tennessee-Tombigbee waterway with respect to international trade in agricultural products. Information contained in this publication does not represent completion of an objective of the project. Rather, it represents background information collected as a preliminary to a more indepth study of one commodity and the Alabama economy. The reason for publishing this preliminary information at this point in the project is so that Alabama farmers, agribusinesses, farm and commodity organizations, extension workers, researchers, and others concerned with international trade can have, in a summarized form, some of the more important background information concerning their particular commodity before it would otherwise be available. While much of the data are from published sources, the layman might have some difficulty assembling these data and processing them in the form presented here. Also, some of the information is from unpublished data from a previous grain marketing project of the Alabama Agricultural Experiment Station and not easily available to the public. Working with data on international trade is difficult. Not only are there different data bases (USDA, ERS; USDA, FAS; and the UN), but data are constantly being updated. Because of these difficulties, all data pertaining to world production, exports, and imports are

from the USDA, FAS data base of March 1981 and all U.S. export data by countries are from the USDA, ERS data bases, including some from more recent dates. The latter will be from different time periods and will not always agree with the USDA, FAS base; but, relationships intended to be presented should not be affected.

Conversions
1 short ton = 2,000 lb. = .907185 MT 1 metric ton = 2,204.622 lb. = 1.102311 ST 1 acre = .404694 hectares 1 hectare = 2.4710 acres 1 bu. soybeans = 60 lb. = .03 ST = .0272155 MT
1 ST
=

33.333 bu.

=

2,000 lb.

1 MT

=

36.7437 bu. = 2204.622 lb. 1 lb. _ .00454 MT

CONTENTS
Page FOREWORD ...................................
INTRODUCTION ............................................

...........

2
5 9 9 10
. 12

ALABAMA'S EXPORT SHARE ...................... THE ALABAMA SOYBEAN MARKET ........... .................... Patterns of Soybean Trade in Alabama .................... Supply, Demand, and Price Structure ...................
WHOLE SOYBEAN PRODUCTION AND TRADE . . . . . . . . . . . . . . . . . .

7

W orld Production ..................................... World Trade ........................................ U.S. Trade.......................................17
SOYBEAN CAKE AND MEAL PRODUCTION AND TRADE . . . . . . . . . . . . . . .

12 14
21

World Production .......... World Trade ......... U.S. Trade ..........................................
SOYBEAN OIL PRODUCTION AND TRADE .

..................... ....................
. . . . . . . . . . . . . . . . .

World Production ..................................... W orld Trade ............................. ............ U.S. Trade ......... .................... ISSUES AND POLICIES ....................................... U.S. Grain Embargoes to the U.S.S.R. and Poland ........ The Effect of Exchange Rates ........................... Protectionism Versus Free Trade ........................ EC-10 Present Policies .................... ............ Japan's Present Policies ........... ..................... Brazil's Present Policies ............ .................... Argentina's Present Policies ............................ Tennessee-Tombigbee Waterway and Port of Mobile Expansion ................................. Soil Mining Aspects of Soybean Production ............... Requirements for Shipping in U.S. Vessels ...............
SUMMARY AND CONCLUSIONs .......... .... .......... ... .

21 21 25 25 25 25 30 30 31 31 31 32 33 33 34 34 34 35 35 36

REFERENCES .....

............................

............

FIRST PRINTING 3M, 1982

Information contained herein is available to all persons without regard to race, color, sex, or national origin.

INTERNATIONAL TRADE IN SOYBEANS AND PRODUCTS IMPLICATIONS FOR ALABAMA
JAMES L. STALLINGS* INTRODUCTION IN AGRICULTURAL COMMODITIES has been a bright spot in the U. S. merchandise trade account during the past decade. The dollar value of U. S. agricultural exports increased more than five-fold from $7.7 billion in calendar year 1971 to more than $43 billion in 1981 (3).
Metric tons, thousands 5OO

TRADE

- --

Preliminary

/

5,

"Soybean oil

FIG. 1. U.S. export of soybeans and products, 1970-1980.
*Associate Professor, Department of Agricultural Economics and Rural Sociology.

6

ALABAMA AGRICULTURAL EXPERIMENT STATION

U.S. exports of soybeans have been dominant in this overall success story of agricultural exports, averaging 82 percent of the whole beans, 39 percent of the soybean cakes and meals, and 34 percent of the soybean oil exported in the world over the last 5 years (1977-81) (5). This has meant that between 50 and 60 percent of all soybeans produced by U.S. farmers during this period were exported. Or, looking at it another way, more than 1 out of every 2 acres of soybeans harvested in the United States during this period was harvested for export. Figures 1 and 2 indicate the increasing importance of exports of soybeans and products since 1970. Whole bean exports peaked at 23,818,000 metric tons (875.2 million bushels**) in 1980 and seem
Billion dollars

8Soybeans and products

7
6
5

4

3

72

73

74

75

76

77

78

79

80

FIG. 2. Value of U.S. exports of soybeans and products, 1970-1980.
**See conversion table following Foreword, page 3. All data from this point will be in metric

tons which is the unit of trade for most of the world.

INTERNATIONAL TRADE IN SOYBEANS

7

to have stabilized near that level after a drop to 19,712,000 metric tons (724.3 million bushels) in 1981. Preliminary 1982 figures are for an export of 22,861,000 metric tons (840 million bushels). Meal and oil exports have not risen as dramatically as whole bean exports since 1970. ALABAMA'S EXPORT SHARE The concept "export share" is used by the USDA to indicate, for individual states, that share of U. S. exports which is proportional to its production of a product. For relatively homogeneous commodities, such as soybeans and other grains and products, it is reasoned that whether or not the grain or product physically comes from a particular state, the economic impact is the same in that, if an equivalent amount of total U.S. exports had not occurred, that state's demand would have been affected by the amount of its export share. Alabama's export share of whole soybeans, and the equivalent amounts necessary to export meals and oil, are shown in table 1. In the last 5 years, the U.S. and Alabama's share has averaged 55.2 percent (weighted average) of U. S. and Alabama production of whole beans. The value of Alabama's export share has increased to a high of $203.6 million in 1979-80. From another standpoint, it has required the production from as much as 1,190,700 acres of Alabama harvested cropland in 1980-81.

Go

TABLE 1. SOYBEANS AND PRODUCTS: U.S. AND ALABAMA EXPORT SHARES

Years Years 67/68 68/69 69/70 70/71 71/72 72/73 73/74 74/75 75/76 76/77 77/78 78/79 79/80 80/81 81/823
2 Oct. 3

U.S. bean production' (000 Bu.) 976,464 1,106,967 1,133,139 1,127,113 1,176,129 1,270,608 1,547,543 1,216,287 1,548,344 1,288,608 1,767,267 1,868,754 2,267,901 1,792,062 2,030,452

U.S. Bu. eq. exp. (000 Bu.) 391,629 414,650 619,599 625,541 563,146 673,790 789,565 603,493 770,498 747,541 980,488 1,019,425 1,206,134 1,016,638 1,141,820

export shares 2 Pet. of prod. Value (000 $) Pct. 1,107,225 40.1 37.5 1,109,164 54.7 1,714,396 55.5 1,981,914 47.9 1,867,248 3,249,956 53.0 51.0 4,923,632 49.6 4,042,828 4,051,939 49.8 5,637,489 58.0 6,410,698 55.5 7,514,988 54.6 53.2 8,587,756 56.7 8,041,826 7,766,165 56.2

Ala. production Acres 484,000 550,000 630,000 600,000 655,000 800,000 970,000 920,000 1,260,000 1,170,000 1,500,000 1,850,000 2,150,000 2,100,000 2,050,000 Bu. 12,826,000 12,100,000 14,175,000 13,800,000 17,030,000 16,000,000 20,370,000 21,160,000 30,870,000 28,080,000 31,500,000 38,850,000 53,750,000 31,500,000 47,150,000 Acres 194,084 206,250 344,610 333,000 313,745 424,000 494,700 456,320 627,480 678,600 832,500 1,010,100 1,143,800 1,190,700 1,152,100

Ala. export shares 2 Bu. 5,143,226 4,537,500 7,753,725 7,659,000 8,157,370 8,480,000 10,388,700 10,496,360 15,373,260 16,286,400 17,842,500 21,212,100 28,595,000 17,860,500 26,498,300 (000 $) 14,541 12,112 21,459 24,368 27,010 40,881 64,765 70,349 80,771 122,813 114,226 156,184 203,556 141,311 180,315

I-

C) C c I-i C
ir

'Calendar year of first year. 1-Sept. 30-allocated as percent exported by U.S. Forecast. Sources: USDA ERS, Foreign Agricultural Trade of the United States, and Ala. Crop and Lstk. Rept. Serv., Ala. Agricultural Statistics.

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rn

z

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-I -I

INTERNATIONAL TRADE IN SOYBEANS9

THE ALABAMA SOYBEAN MARKET Patterns of Soybean Trade in Alabama Figure 3 characterizes the nature of the physical flow of trade in soybeans and products as it affects the Alabama economy. This pattern was derived from a survey of grain handling firms in Alabama during 1978 under Southern Regional Research Project 115, "Alternative Structures for Increasing Efficiency in Inter-and IntraRegional Grain Marketing Systems." While the physical amounts of movement of soybeans and products will have changed somewhat since 1978, the general nature of the physical flows should have remained the same and should provide background for models of the soybean industry for further research.

FIG. 3. The Alabama soybean economy-physical movements.

10

ALABAMA AGRICULTURAL EXPERIMENT STATION

Supply, Demand, and Price Structure The supply, demand, and price structure existing in the Alabama soybean economy is illustrated in figure 4. While no statistical estimates of the relative effects of the various factors illustrated have been made under the present international trade project at this time, the various factors have been identified and graphed as a model for the design of more specific research. Note that prices received by Alabama farmers for their soybeans are determined by the demand for the whole soybeans for storage, crushing in Alabama, by out-of-state U.S. firms, and for foreign export. Simultaneously, prices received by Alabama farmers will be determined by the commercial supply of beans available in Alabama. Demand for beans to crush in Alabama, in turn, is determined by forces affecting the meal and oil prices. Figure 4 illustrates only a few of the possible factors involved in a comprehensive model of the whole demand, supply, and price structure for Alabama soybeans. The reader can visualize, for instance, that each of the elements of demand for the whole beans and for meal and oil would have its own set of factors (not shown here) which would determine that particular demand. Figure 5 illustrates the demands (D), supplies (S), prices (P), and quantities (Q) for meal, oil, and whole beans using the economists' concepts of demand and supply curves. In the illustration, for instance, the price of soybean meal in the U.S. is determined by the interaction of supply and demand resulting in price (Pm) and quantity (d). The relationship is affected, however, by demands for U.S. except Alabama, Alabama demand, foreign export demand, and supply of meal stocks. Soybean oil supply and demand similarly determine a price of (Po) for soybean oil with a quantity demanded of (i) for the U.S. Total demand for whole beans for crushing is, in turn, determined by crushing demands for meal and oil, as well as demands for whole beans for U.S. except Alabama, for Alabama, foreign export demand, and commercial stocks. The various demands for whole beans, along with the supplies, finally determine a price for whole beans of (Pb) with a quantity supplied of (o). While all these relationships will not be used in all trade analysis, they do provide an overall framework for guiding research into the various issues and policies involved in international trade in soybeans and soybean products. They should provide a framework for further work on the present international trade project in Alabama.

INTERNATIONAL TRADE IN SOYBEANS

11

Acres

Relative

profitability

of

planted Acres harvested Yield per harvested acre
Alabama -

other form enterprises Weather, insect, and disease problems Levels of different production inputs

U.S. soybean
supply

soybean
production

On-form
storage

Alabama

commercial

soybean

supplyax

FIG. 4. The demand, supply, and price structure for Alabama soybeans.

12

ALABAMA AGRICULTURAL EXPERIMENT STATION

I. Total Demand and Supply for U.S. Soybean Meal

Q

Ia

'

b

QM

c

Q M

d

QM Meal Stocks

QM

U.S. except AI. Demand

Alabama Demand

Foreign Export Demand

Total DerAand for U.S. Meal

I.

Total Demand and Supply for U.S. Soybean Oil
s

ID.

ID

_S

D.

1S

D

I

S

.S

[i
Ik
QB

r,.e

up ri

I

U.S. except Al. Demand

n QB QB I QB m QB o Commercial Total Demand for Total Demand Alabama Demand Foreign Export Stocks U.S. Crushing and Supply for Demand Whole Beans

p

QB

FIG5.5. Graphic illustration of supply and demand components of the U.S. and Alabama soybean markets.

WHOLE SOYBEAN PRODUCTION AND TRADE World Production The United States is, by far, the most important producer of soybeans in the world, accounting for an average of 63.88 percent of world production in the 5 years from 1977-1981, table 2. Only three other countries have, individually, averaged more than 1 percent of world production during these years: Brazil, 16.34 percent; the People's Republic of China, 9.51 percent; and, Argentina, 3.96 percent. World production of soybeans, therefore, is mostly dependent upon the above four countries which have averaged 93.69 percent of world production in the last 5 years. From the standpoint of competition for the world market, therefore, only three countries have the potential for being competitive with the U.S. and Alabama; and, one of these, the People's Republic of China, tends to use all of the soybeans it produces and imports more. Only Brazil and Argentina have shown competitiveness in the world market for whole soybeans, as will be seen in the next section.

TABLE

2. SOYBEANS: WORLD PRODUCTION, BY COUNTRIES,

1977-1981 (000
1979 1980

-I
METRIC TONS)

m

z
Cum,. Pct.
63.88 16.34 9.51 3.96

Rank 1977-81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Country

Mkt. yr.'

1977

1978

1981

1977-81 Av.
49, 040.2 12,544.6 7,300.0 3,040.0

0

Pct.
63.88 80.22 89.73 93.69 I

z

United States.......................09-08 Brazil..............................03-02 China, P.R.........................09-08 Argentina...........................04-03 Indonesia...........................01-12 Canada............................08-07 U.S.S.R...........................01-12 Paraguay...........................04-03 09-08 Mexico ............................ Korea, N..........................10-09 Korea, S...........................10-09 Romania...........................09-08 10-09 India .............................. 01-12 Japan .............................. Colombia........................... 01-12 08-07 Bulgaria............................ Iran ............................... 08-07 Thailand............................ 04-03 Australia............................ 04-03 .09-08 Egypt ............................. Totals Top-20 ........................ Others .......................
All

35, 070

48,097
9,534

501,859
10,236

61,1722
15,040

12,513
6, 600

1,400
523 251 480 377 280 300 295 213 150 111 103 99 102 114 55 11
59,047

7,300 2,700
617 580 545 333 470 310 319 191 180 190 131 90 86 96 73 27
71,869

7,600
3,700

7,500 3,500
650 671 467 600 680 330 257 376 300 192 146 152 130 95 89 106

49,453 15,400

674 516 639 450 330 320 293 230 220 190 137 120 115 94 99 79
76,901

7,500 3,900

660 713 540 700 280 330 288 330 450 174 155 140 115 100 52 105 389

624.8 546.2 534.2 492.0 408.0 318.0 290.4 268.0 260.0 171.4 134.4 120.2 109.6 99.8 73.6 65.6
76,441.0

0.81 0.71 0.70 0.64 0.53 0.41 0.38 0.35 0.34 0.22 0.18 0.16 0.14 0.13 0.10 0.09

94.50 95.21 95.91 96.55 97.08 97.49 97.87 98.22 98.56 98.78 98.96 99.12 99.26 99.39 99.49 99.58

m
Co)

0

w m
z
Co)

268

301
72,170

324

93,003
368

81,385

..........................

59,315

77,1225

330.0

93,325

81,774

76,771.0

Source: USDA, FAS, Foreign Agriculture Circular, Qilseeds and Products, FOP6-18, March, 1981. 'The market year begins in the year before, or Jan. 1, of the year indicated in the northern hemisphere or near the equator, and in the year indicated for the southern hemisphere countries and some near the equator.
Wi

14

ALABAMA AGRICULTURAL EXPERIMENT STATION

World Trade While the United States accounted for an average of only 63.88 percent of the world production of soybeans during 1977-1981, it accounted for an average of 81.73 percent of all world exports of whole soybeans, table 3. Other countries accounting for more than 1 percent during this time included Argentina, 9.01 percent; Brazil, 5.65 percent; and Paraguay, 1.41 percent. World exports of whole soybeans are, therefore, mostly dependent upon the named four countries which have averaged 97.80 percent of the exports in the period from 1977-1981. Further, research into world competition with the United States for the whole soybean trade can, therefore, practically, be confined to analysis of the three countries, Argentina, Brazil, and Paraguay. Unlike soybean oil, as will be seen in a later section, the import market for whole soybeans is made up mostly of the more affluent industrialized countries that either have large livestock and poultry industries and want to do their own crushing (the countries of Europe) or have a need for both human and livestock feeds (Japan), table 4. However, unlike world production and world exports, which are dominated by four countries, world imports of whole beans are not dominated by any one country or small group of countries. Japan is the largest single importer of whole soybeans averaging 16.55 percent of world imports from 1977-1981. After Japan, the 10 countries of the European Economic Community (EC-l0: West Germany, Netherlands, Italy, U.K., Belgium, Luxemburg, France, Denmark, Greece, and Ireland) accounted for 11,471,800 metric tons or 46.20 percent of all imports during these years. Other individual countries of importance were Spain with 9.63 percent, the U.S.S.R. with 5.32 percent, Taiwan with 3.68 percent, and Mexico with 3.02 percent. The People's Republic of China has been increasing imports in recent years and may be an important market in the future.

zI

TABLE 3. SOYBEANS: WORLD EXPORTS,

BY COUNTRIES, 1977-1981 (000 METRIC

TONS)
17-1C 1781G Av.
20,023.6

m z
0 .. Pct.
81.73
90.74 96.39 v

RankConrMk.y. 1977-81ConrMk.y. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
17

197 197 15,351 623 2,581 241 116 125 25 30 1 12 0
0

17 17 19,061 1,983 658 192 218 90 64 18 18 8 8
1

199 199 20,115 2,830 638 347 332 265 91 17 18 9 2
1

18 18
23,818

191 191
21,773

z
-I

Pct.
81.73
9.01 5.65

United States.......................09-08 Argentina...........................04-03 Brazil..............................03-02 Paraguay..........................04-03 Netherlands.........................01-12 China, P.R.........................09-08 Canada.............................08-07 Singapore...........................01-12 01-12 Germany, W ........................ 04-03 Thailand.................... ....... Uruguay............................ 04-03 01-12 France ............................. South Africa.........................05-04 01-12 Hong Kong......................... Romania............................ 09-08 01-12 Japan ..............................
U. K
. ....................

2,700 1,540

450 250 190 55 30 25 7 12
8

2,900 1,500

500 250 200 60 30 25 10 12

207.2 1,383.4

m
C,)

01-12

18 19

Denmark........................... Nigeria............................. Totals........................

01-12 10-09

11 6 9 0 3 0 2
19,136

1 2 0 0 0 0 0

1 3 0 0 0 0 0

1 1 0 0 0 3 0

101 0 0 5 0 0 0

346.0 233.2 174.0 59.0 25.0 17.4 9.2 6.8
4.0

1.41 0.95 0.71 0.24 0.10 0.07 0.04 0.03
0.02

97.80 98.75 99.46 99.70 99.80 99.87 99.91 99.94
99.96

0

m z

CI)

22,322

24,669

3.0 2.4 1.8 1.0 0.6 0.6 0.4

0.01 0.01 0.01 0.00
0.00

29,090

0.00 0.00

99.97 99.98 99.99 99.99 100.00 100.00 100.00

27,276

24,498.6

Source: USDA, FAS, ForeignAgriculture Circular, Qilseeds and Products, FOP6-18, March, 1981. 'The market year begins in the year before, or Jan. 1, of the year indicated in the northern hemisphere or near the equator and in the year indicated for the suuthern henisphere countries and some near the equator.

jl

, TABLE 4. SOYBEANS: WORLD IMPORTS, BY COUNTRIES, 1977-1981 (000 METRIC

TONS)
1977-81 Av. 4,108.8 Pct. 16.55
14.89

Rank 1977-81 1 2 3 4
5

Country

Mkt. yr.'

1977 3,602 3,372 1,691 1,835 1,179 1,364 1,131 813 663 549 550 253 407 401 392 133 228 140 0 146
18,849 873

1978 4,260 3,613 2,665 2,179 1,279 906 1,238 1,061 959 782 580 188 406 491 263 239 260 241 92 181
21,883 1, 278

1979 4,132 3,673 3,288 2,237 1,706 1,765 999 1,005 1.111 869 633 261 372 486 350 428 316 260 253 229
24,373

1980 4,250

1981 4,300
3,875

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Japan. ............................ 01-12 Germany, W........................ 01-12 Netherlands ......................... 01-12 Spain..............................09-08 Italy ............................... 01-12 U.S.S.R...........................01-12 U.K............................... 01-12 01-12 Belg.-Lux ........................... Taiwan ............................. 01-12 France ............................. 01-12 Mexico ............................. 09-08 China, P.R.........................09-08 Israel............................... 01-12 Denmark ........................... 01-12 08-07 Canada ............................. Korea, S............................ 10-09 Norway ............................ 01-12 Romania ......................... 09-08 Brazil.............................. 03-02 Portugal ............................ 01-12 Totals
Top-20.............................. ................ Others ....... ......

3,950
3,558

3,696.6

Cum. Pct. 16.55
31.44

2,900

3,189
2,800

2,878.2

1504

1,065
1,250
1,100

11,525 1,500
1,100

2,390.2

11.59
9.63 5.79 5.32

43.03
52.66 58.45 63.77

1,38.6 1,320.0
1,153.6

1,150 900 900 1,200 750 380 210 425 500 340 330 450 230
26,054

1,015.8
912.6 793.6 749.2 452.4 378.6 377.6 370.6 352.0 293.8 250.2 249.0 203.2

4.65
4.09

68.42
72.51

930 868 783 810 328 300 423 460 325 280 450 230
25,764

3.68 3.20 3.02 1.82 1.52 1.52 1.49 1.42 1.18 1.01 1.00 0.82

76.19 79.39 82.41 84.23 85.75 87.27 88.76 90.18 91.36 92.37 93.37 94.19

C)
C
c-

1504

1,713

1,866

23,384.6

1,446.8

All................................

19,722

23,161

25,877

27,477

27,920

24,831.4

m m z
C,)

Source:USDA, FAS, Foreign Agriculture Circular, Qilseeds and Products, FOP6-18, March, 1981. of the year indicated in the northern hemisphere or near the equator and in the year indicated for 'The market year hegins in the year before, or the southern hemisphere countries and some near the equator.

Jan. 1,

-a

0

z

INTERNATIONAL

TRADE

IN

SOYBEANS

17

U.S. Trade Only the United States has had an absolulte surplus of soybeans over total domestic use in the last 5 years large enough to export consistently large quantities of whole beans, table 5. Consistency is important in world trade; and, while the United States has steadily increased exports of beans from 15,351,000 to 21,773,000 metric tons from 1977-1981, Brazil's exports have been highly inconsistent. Also, Brazil's domestic use of total supply has ranged from 72 to 93 percent while the U.S. domestic use has ranged from 49 to 57 percent. While the People's Republic of China is an important producer of soybeans, it represents little competition to U.S. trade at the moment as nearly 100 percent of its production is for domestic use. Argentina, on the other hand, while not a large world producer, has been steadily increasing exports and has been exporting a large percent of its production. As with world imports, no one country dominates U.S. exports, table 6. While the Netherlands accounted for 21.55 percent, Japan is also important with 18.69 percent over the period from 1977-1981. Again, the EC-10 is an important bloc for U.S. exports of soybeans accounting for 45.70 percent. Other important countries, individually, include Spain with 7.83 percent, Taiwan with 4.79 percent, the U.S.S.R. with 3.60 percent, and Mexico with 3.29 percent. An important question for the United States, and for Alabama, is: "What percent of the world imports of different individual countries is now accounted for by U.S. exports and where does the potential for increased exports exist?" By looking at tables 4 and 6, it can be seen that the U.S. exports 18,305.2 metric tons to its top 20 customers. This is 78.3 percent of the 23,384.6 metric tons imported by the top 20 importing countries from 1977-1981. The potential for increased exports of whole beans, therefore, does not appear to lie so much in getting a bigger share of the existing market as in expanding the total market. This may occur with or without U.S. encouragement as countries become more affluent and develop livestock feeding industries. A larger potential for expansion of the market share may be in exports of soybean meal and soybean oil

18

ALABAMA AGRICULTURAL EXPERIMENT STATION

where the United States does not now control as large a share, as will be seen later. There is also the question of whether or not exports of whole beans should be expanded at the expense of exports of meal and oil. Conventional economic theory would hold that the more of the operations in a manufacturing process that can be done on U.S. soil, with U.S. labor, the better. The process of converting beans to meal and oil, presumably, would result in more employment in the United States and the export of a higher value product per unit of weight.

TABLE 5. PRODUCTION-UTILIZATION BALANCE FOR SOYBEANS FOR THE FOUR TOP PRODUCING COUNTRIES, 1977-81

Year

Production 000 MT.

Begin. stocks

Imports

TotalTotal supply Exports dom. use

End stocks

T. dom. Tsof Pct. 57 54 55 49 53 72 91 93 89 89 98 99 97 98 98 46 31 23 23 26

1977 1978 1979 1980 1981 1977 1978 1979 1980 1981 1977 1978 1979 1980 1981 1977 1978 1979 1980 1981

35,070 48,097 50,859 61,722 49,453 12,513 9,534 10,236 15,040 15,400 6,600 7,300 7,600 7,500 7,500 1,400 2,700 3,700 3,500 3,900

000 MT. 000 MT. 000 MT. 000 MT. United States 6,666 0 41,736 15,351 2,801 0 50,898 19,061 4,386 0 55,245 20,115 4,738 0 66,460 23,818 9,764 0 59,217 21,773 621 1,090 300 121 171 0 0 0 0 0 114 190 24 43 18 0 92 253 450 450 253 188 261 810 750 0 0 0 0 0 Brazil 13,134 10,716 10,789 15,611 16,021 2,581 658 638 1,540 1,500 125 90 265 190 200

000 MT. 000 MT. 23,584 27,451 30,392 32,878 31,457 9,463 9,758 10,030 13,900 14,330 6,728 7,398 7,596 8,120 8,050 701 883 851 825 1,000 2,801 4,386 4,738 9,764 5,987 1,090 300 121 171 191 0 0 0 0 0 190 24 43 18 18

P.R. China 6,853 7,488 7,861 8,310 8,250 Argentina 1,514 2,890 3,724 3,543 3,918

623 1,983 2,830 2,700 2,900

Source: USDA, FAS, Foreign Agriculture Circular, Oilseeds and Products, FOP6-18, March, 1981.

TABLE 6. SOYBEANS:

U. S. EXPORTS, BY COUNTRIES OF DESTINATION,

1977-1981 (000
1980

METRIC TONS)

m z
Cum. Pct.
21.55

Rank 1977-81 1 2
3

Country Netherlands .................................. Japan ........................................
Spain..
..

1977 2,966 3,070
1,030

1978 4,203 3,798
1,564

1979 4,137 3,884
1,489

1981

1977-81 Av.

0

z

Pct.
21.55

5,907

4,085

..........

3,877 2,158

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
19

Germany, W ................................. 1,566 Taiwan ...................................... 731 Italy...... ................................... 815 U.S.S.R. .................................... 825 Mexico ...................................... 399 France ....................................... 460 Belg.-Lux .................................... 411 U.K........................................ 390 Canada ...................................... 446 Korea, S..................................... 154 Israel........................................ 392 Denmark .................................... 321 China, P.R................................... 0 Norway...................................... 201 Romania ..................................... 107
Yugoslavia

....................................

1,514 927 882 744 580 602 500 742 281 248 418 409 47 249 221
180

1,479
1,173

11,374

3,849 1,503

4,259.6

1,781

3,695.6 1,548.8

1,542.8
946.0

18.69 7.83
7.80 4.79

40.24 48.07
55.87 60.66

856

1,043

0

841 1,178 575 704 398 551 376 439 375 341 142 238 200
236

1,016 813 845 740 585 520 393 473 249 342 810 298 308
223

839 0 855 493 712 384 291 467 277 156 472 261 61
205

878.6 712.0 650.8 599.8 521.2 517.4 357.4 356.2 342.2 313.8 294.2 249.4 179.4
176.8

4.44. 3.60 3.29 3.03 2.64 2.62 1.81 1.80 1.73 1.59 1.49 1.26 0.91
0.89

65.10 68.70 71.99 75.02 77.66 83.89 85.62 87.21 88.70 89.96 90.87
91.76

80.28 82.09

z

Co)

40

20

Portugal...................................... 80 Totals Top-20................................. 14,404 Others ................................... 751 All.................................... 15,155

189 18,298 1,388 686

174 18,930 1,264 20,194

138 21,925 1,908 833

235 17,969 2,003 972

163.2 18.305.2 1,462.8 768.0

0.83

92.59

Source: USDA. ERS. Foreign Agricultural Trade of the United States, hi-monthly and yearly supplements.

(0

0 TABLE 7. SOYBEAN MEAL: WORLD PRODUCTION, BY COUNTRIES, 1977-1981 (000 METRIC

TONS)
1977-81 Av. Pct.
40.65 15.48 5.62
5.06

1977-8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Country

Mkt. yr.'

1977 16,772 6,719 2,748 2,347 2,225 1,163 1,455 5,163 943 830 621 637 541 450 504 455 243 311 307 85. 40,919
1,648

1978 20,296 6,891 2,977 2,594 2,542 1,862 1,705 999 1,023 982 780 841 567 598 618 518 328 286 364 138 46,909

1979 22,094 7,039 2,946 2,667 2,645 2,287 1,788 1,152 1,208 748 767 824 577 705 680 499 374 304 357 248 49,909

1980

1981

Gum. Pct.
40.65 56.13 61.75
66.81

United States.......................09-08 Brazil.............. ............... 03-02 Germany, W.......................01-12 China, P.R.........................10-09 Japan............................. 01-12 Netherlands.........................01-12 Spain..............................09-08 U.S.S.R...........................01-12 Italy............... ............... 01-12 U.K.............................. Mexico.............................09-08 01-12 Belg. -Lux........................... Canada............................. 08-07 01-12 France ............................. 01-12 Taiwan ...... ....................... Argentina........................... 04-03 Romania............................ 09-08 Israel .............................. 01-12 01-12 Denmark ........ ,.................. 10-09 Korea, S............................ Totals To p-20 ........................ Others ....................... All ..........................

24,589 9,870
3,100

23,091
10,175 2,996

21,368.4 8,138.8

2,864

2,725 2,530
2,316

2,830

2,953.4
2,660.4

2,725 2,205
2,236

0.-12

1,318
1,280
954 1,020 864 738 685 642 489 502 293 235 354

11,220

1,473
920 1,170 860 765 727 593 625 497 304 155 385

2,572.4 2,009.4 11,900.0

4.89 3.82
3.61

71.70 75.52
79.13

1,301.0
1,134.8

2.47 2.16

81.60 83.76

886.8 871.6 805.2 637.6 633.0 607.4 517.2 388.8 299.6 283.6 242.0 50,211.4

1.69 1.66 1.531.21 1.20 1.16 0.98 0.74 0.57 0.54 0.46

85.45 87.11 88.64 89.85 91.05 92.21 93.19 93.93 94.50 95.04 95.50

C

57,368

55,952

42,567

2,011 481,920

23,420
52, 329

2,728 603,096

2,966 58,918

2,354.6 52,566.0

m x m m

Source: USDA, FAS, Foreign Agriculture Circular, Oilseeds and Products, FOP 6-18, March, 1981. of the year indicated in the northern hemisphere or near the equator and in the year indicated for 'The market year begins in the year before, or the southern hemisphere countries and some near the equator.

z

Jan. 1,

CO) 0

z

INTERNATIONAL

TRADE

IN

SOYBEANS

21

SOYBEAN CAKE AND MEAL PRODUCTION AND TRADE World Production Soybean meal production does not necessarily take place in the countries where the soybeans are produced. For instance, while the four largest producers of soybeans (United States, Brazil, the People's Republic of China, and Argentina) accounted for an average of 93.69 percent of world soybean production from 1977-1981, they only accounted for 62.17 percent of the meal production, tables 2 and 7. Many important users of soybean meal prefer to import the whole beans and produce their own meal and oil. Some of these countries, in turn, export meal and, especially, oil in competition with the United States. Notable among these are the countries of the EC-l0. While the United States dominated production of soybean meal with an average of 40.65 percent from 1977-1981, table 7, the domination is not nearly as great as with soybean production with 63.88 percent, table 2, and whole soybean exports with 81.73 percent, table 3. Brazil is the only other important producer of soybean meal that is also an important producer of soybeans and is one of the chief competitors with the United States in the export of soybean meal. World Trade
While the U.S. is the world's largest producer of soybeans and soybean meal, it is not the dominant exporter of meal, table 8. During the period from 1977-1981, Brazil has averaged slightly more meal exports than the United States with 38.82 percent of the world total. One of the reasons for Brazil's leadership in meal exports is that the U.S. used an average of 72.21 percent of its total meal supply domestically for these years (5). Meal exports, therefore, are more of a residual market after domestic needs are taken care of in the U.S. This is true of Alabama as well. With its large poultry industry, Alabama uses much of the soybean meal it can produce within the State. During this same period, however, Brazil used domestically only 25.55 percent of its production of meal, leaving a larger absolute amount for export. While the EC-10 produces much of the meal it uses from imports of whole beans, it is also the world's principal importer of soybean meal. The countries of the EC-10 accounted for 52.66 percent of all

N% N~
TABLE 8. SOYBEAN MEAL: WORLD EXPORTS, BY COUNTRIES, 1977-1981 (000 METRIC TONS)

Rank 1977-81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
17

Country

Mkt. yr.'

1977 5,329 4,136 593 715 371 268 89 106 63 0 51 17 47 0 18 9 12 0 2 0

1978 5,368 5,516 1,145 890 516 269 116 117 68 40 45 20 46 0 10 11 14 0 10 0

1979 5,038~ 5, 996 1,535 1,010 481 258 141 130 75 50 41 40 18 40 9 13 12 12 12 0
14,911

1980
6, 900

1981
7,350

1977-81 Av.

Cum. Pct.
382 37.41 8.64

Pct.
38.82 76.23 84.87

Brazil..............................03-02 United States.......................10-09 Netherlands.........................01-12 Germany, W.......................0112 Belg.-Lux...........................01-12 Argentina...........................04-03 Norway...........................01-12 Singapore...........................01-12 Denmark..........................01-12 India...............................10-09 Canada............................08-07 04-03 Paraguay............................ 01-12 U.K ............................... 01-12 Lebanon............................ 01-12 France............................. 01-12 Italy...............................
Israel.............................. 01-12

18 19 20

04-03 Bolivia ............................. 04-03 Uruguay............................ .09-08 Spain............................. Totals Top-20 ........................ Others ........................ . .. . . . . .. . . . . Al411

7,174 1,700 1,100 500 220 175 135 28 60 43 36 10 40 9 15 10 25 16 10 18,206 2 18,208

6,078 1,700
1,380 500 325 164 140 25 100 45 73 25 55 20 15 10 19 13 40

5,997.0 5,780.0 1,334.6
1,019.0

6.60

91.47

473.6 268.0 137.0 125.6 51.8 50.0 45.0 37.2 29.2 27.0 13.2 12.6 11.6 11.2 10.6 10.0
15, 444.2

3.07 1.73 0.89 0.81 0.34 0.32 0.29 0.24 0.19 0.17 0.09 0.08 0.08 0.07 0.07 0.06

94.54 96.27 97.16 97.97 98.31 98.63 98.92 99.16 99.35 99.52 99.61 99.69 99.77 99.84 99.91 99.97

w

C
I I-

C
I

rn m

11,826
5
11, 831

14,201

18,077
1
18, 078

14,213

. 12

3
14,914

15,448.8

4.6

Source: USDA, FAS, Foreign Agriculture Circular, Qilseeds and Products, FOP 6 18, March, 1981. 'The market year begins in the year before, or Jan. 1, of the year indicated in the northern hemisphere or near the equator and in the year indicated for the southern hemisphere countries and some near the equator.

z
C,,

0

z

zI
TABLE 9. SOYBEAN MEAL, WORLD IMPORTS, BY COUNTIES,

1977-1981 1979 2,558 1,812 1,226 960 839 938 715 622 555 471 500 480 360 315 52 283 380 250 280 254

(000
1980 2,765

m
METRIC TONS)

z
1977-81 Av. 2,433.4 Pct. 16.02
10.80

Rank

1977-81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Country

Mkt. yr.'

1977 1,706 939 720 950 841 644 563 554 264 471 161 339 244 205 0 314 425 217 230 143

1978 2,276 1,693 1,070 900 912 730 704 666 433 532 490 376 328 240 0 340 482 238 129 213

1981 2,862 1961 1,183 1,040 1,085 1,000 895 580 575 462 570 381 420 425 1,000 300 17 260 220 225

France.............................. 01-12 01-12 Germany, W........................ 01-12 Italy............................... 01-12 Germany, E. ....................... 01-12 Netherlands ......................... Poland.............................. 01-12 Denmark ........................... 01-12 Hungary ............................ 09-08 U.K ............................... 01-12 01-12 Belg.-Lux ........................... Czechoslovakia....................... 01-12 Canada ............................. 08-07 01-12 Austria ............................. Venezuela .......................... 01-12 U.S.S.R. ........................... 01-12 Japan.............................01-12 Spain.............................. 09-08 Sweden ............................ 01-12 Romania............................ 09-08 Ireland............................. 01-12 Totals
Top-20.............................

1,800
1,135 1,000 970 1,100 820 635 600 471 550 430 375 375 500 250 60 220 240 200

1,641.0

Cum. Pct. 16.02
26.82

0

z
r

1,066.8 970.0 929.4 882.4 739.4 611.4 485.4 481.4 454.2 401.2 345.4 312.0 310.4 297.4 272.8 237.0 219.8 207.0
13, 297.8

7.02 6.39 6.12 5.81 4.87 4.03 3.20 3.17 2.99 2.64 2.27 2.05 2.04 1.96 1.80 1.56 1.45 1.36

33.84 40.23 46.35 52.16 57.03 61.06 64.26 67.43 70.42

0 wo mn

73.06 75.33
77.38 79.42 81.38 83.18 84.74 86.19 87.55

z

0)

9,930
1,702 11,632

12,752
1,666 14,418

13,850
1,784 15,634

14,496
2,152 16,648

15,461
2,152 17,613

Others............................. All................................

1,891.2 15,189.0

Source: USDA, FAS, Foreign Agriculture Circular, Qilseeds and Products, FOP 6-18, March, 1981. 'The market year begins in the year before, or Jan. 1, of the year indicated in the northern hemisphere or near the equator, and in the year indicated for the southern hemisphere countries and some near the equator.
N~

WI

TABLE 10. SOYBEAN MEAL: U.S. EXPORTS, BY COUNTRIES OF DESTINATION 1977-1981

(000

METRIC TONS)

1977-nk81 1 2 3 4 5 6 7
8

Country Netherlands ................................. Germany, W ................................ Italy ........................................ Poland...................................... Canada ..................................... Venezuela.................................... Germany, E. ................................
Japan.......................................

1977 566 953 429 257 256 128 0
217

1978 655 1,040 742 493 339 114 105
271

1979 748 718 691 243 414 244 469
204

1980 1,490 1,013 856 400 356 329 325
210

1981 1,502 710 684 312 331 374 245
154

1977-81 Av. 992.2 886.8 680.4 341.0 339.2 237.8 228.8
211.4

Cum. Pct. 16.16 14.85 11.39 5.71 5.68 3.98 3.83
3.54

Pct. 16.61 31.46 42.85 48.56 54.24 58.22 62.05
65.59

r>
D >

9 10 11 12 13 14 15 16 17 18 19 20

Romania .................................... France...................................... Spain....................................... Mexico ..................................... Czechoslovakia ............................... Yugoslavia.................................... Portugal ..................................... Bulgaria ..................................... U.K ........................................ Hungary..................................... Ireland ...................................... Iran......................................... Totals Top-20.................................. Others................................... All......................................

37 131 143 190 100 95 10 0 47 38 36 32 3,665 452 4,117

32 147 237 95 64 113 82 16 112 120 84 118 4,979 583 5,562

184 355 254 91 174 58 128 116 67 77 118 81 5,434 562 5,996

260 270 58 148 214 153 97 153 69 95 74 40 6,610 989 7,599

431 8 22 177 60 191 244 213 57 0 1 0 5,716 873 6,589

188.8 182.2 142.8 140.2 122.4 122.0 112.2 99.6 70.4 66.0 62.6 54.2 5,280.8_ 691.8 5,972.6

3.16 3.05 2.39 2.35 2.05 2.04 1.88 1.67 1.18 1.11 1.05 0.91

68.75 71.80 74.19 76.54 78.59 80.63 82.51 84.18 85.36 86.47 87.52 88.43

c
C m X 2 m
--I
-I

m

Source: USDA, ERS, ForeignAgricultural Trade of the United States, Bi-monthly and yearly supplements. 0 z

INTERNATIONAL

TRADE

IN

SOYBEANS

25

world imports of soybean meal from 1977-1981, table 9. (Greece was not in the top 20 and accounted for only .1 percent.).The Communist bloc countries of Europe have also become important importers, as they have increasingly developed more livestock feeding, accounting for 22.71 percent of meal imports from 1977-1981. Putting all countries of Europe together accounts for over three-fourths of the world's meal imports. U.S. Trade As with total world imports, the EC-10 and the Communist countries of Europe (including Yugoslavia) take the largest amounts of U.S. exports of soybean meal with 49.68 and 19.66 percent, respectively, table 10. When all of Europe is included, abut threefourths of U. S. trade in soybean meal is accounted for. Only Canada, Japan, and Mexico are other important customers for U.S. soybean meal. SOYBEAN OIL PRODUCTION AND TRADE World Production As with world meal production, the United States and Brazil dominated world soybean oil production with 41.51 and 16.67 percent, respectively, from 1977-1981, table 11. These are the only two countries which produce enough oil from their own beans to have a significant amount to export. Most of the other important producers of oil produce it from imported beans, except for the People's Republic of China. World Trade While relatively few countries of the world export important amounts of soybean oil, table 12, a great many countries of the world import at least some, table 13. Also, while exporters of oil are many of the same countries which export whole beans and meal, the important importers of oil are a different set of customers than those for beans and meal. Important exporters of oil are the United States, Brazil, and Argentina, as with beans and meal. However, some of the European countries, which import whole beans and do their own crushing for the meal, have a surplus of oil for export. Among these are the Netherlands, Spain, West Germany, France, Belgium, and Luxemburg, table 12.

TABLE 11. SOYBEAN OIL: WORLD PRODUCTION, BY COUNTRIES 1977-81

(000 METRIC TONS)
1981 1977-81 Av. Pct.
41.51 16.67

N~

1977-8 1 2 3 4 5 6 7 8 9 10 11 12 13
14

Country

Mkt. yr.'

1977 3,891

1978 4,666 1,645 648 598 430 374 365 221 217 180 216 178 142 124 127 108 73 61 79 29

1979 5,136 1,667 649 621 530 398 .376 253 257 177 167 179 156 129 156 106 83 65 81 52

1980

Cumr. Pct.
41.51 58.18

United States.......................09-08 Brazil..............................03-02 Germany, W.......................01-12 Japan.............................0112 Netherlands........................01-12 Spain.............................09-08 China, P.R..........................10-09 U.S.S.R. .......................... 0112 Italy.............................. 01-12 Mexico .................... 09-08 U.K..............................01-12
Belg.-Lux..........................0112

1,604 617
532 277 313 331 367 200 143 188
141

5,490 2,412
683 630 565 516 403 289 272 235 212 192 148 157 146 104 111 62 51 83

5,266 2,487
666 630 493 502 399 323 259 270 203 191 136 166 155 133 110 65 35 90
12, 579

4,889.8 1,963.0
652.6 602.2 459.0 420.6 374.8 290.6 241.0 201.0 197.2 176.2 139.6 138.2 136.4 109.4 86.2 65.6 64.0 54.6
11, 262.0

Taiwan .............................
Canada.............................

01-12
08-07

116
115

15 16 17 18 19 20

France ............................. 01-12 Argentina........................... 04-03 Romania............................ 09-08 Israel............................... 01-12 Denmark........................... 01-12 Korea, S. ... :....................... 10-09 Totals Top-20............................. Others.............................. All................................

98 96 54 75 74 19 9,251 360 9,611

5.54 5.11 3.90 3.57 3.18 2.47 2.05 1.71 1.67 1.50 1.19 1.17 1.16 0.93 0.73 0.56 0.54 0.46

63.72 68.83 72.73 76.30 79.48 81.95 84.00 85.71 87.38 88.88 90.07 91.24 92.40 93.33 94.06 94.62 95.16 95.62

r-

w

C)
n

10,1481
444

11,238
531

12,)761
598
13, 359

r

650

516.6

x
-o

10,925

11,769

13,229

11,778.6

Source: USDA, FAS, Foreign Agriculture Circular, Qilseeds and Products, FOP 6-18, March, 1981. 'The market year begins in the year before, or Jan. 1, of the year indicated in the northern hemisphere or near the equator, and in the year indicated for the southern hemisphere countries and some near the equator.

z
C,)
-I

0

z

TABLE 12. SOYBEAN OIL: WORLD EXPORTS,

BY COUNTRIES,

1977-81 (000 METRIC TONS)

m

Rank 1977-81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
19

z
Country Mkt. yr.' 1977 702 557 199 134 234 83 85 64 23 5 5 0 6 13 0 0 1 2 3 0 2,116 10 2,126 1978 933 542 291 272 216 127 131 59 30 15 7 3 7 4 0 1 1 4 2 0 2,645 6 2,)651 1979 1,059 469 396 311 212 148 118 78 21 14 13 14 8 5 0 2 3 6 2 0 2,879 13 2, 892 1980 1, 220 800 400 360 248 132 125 70 14 20 14 14 10 5 9 9 6 1 2 5 3,464 3 3,467 1981 907 870 333 380 226 130 121 95 10 22 17 12 10 5 13 10 10 6 2 5 3,184 3
3,187

1977-81 Av. 964.2 647.6 323.8 291.4 227.2 124.0 116.0 73.2 19.6 15.2 11.2 8.6 8.2 6.4 4.4 4.4 4.2 3.8 2.2 2.0 2, 857.6 7.0 Pct. 33.66 22.61 11.30 10.17 7.93 4.33 4.05 2.56 .0.68 0.53 0.39 0.30 0.29 0.22 0.15 0.15 0.15 0.13 0.08 0.07

Cum . Pct. 33.66 56.27 67.57 77.74 85.67 90.00 94.05 96.61 97.29 97.82 98.21 98.51 98.80 99.02 99.17 99.32 99.47 99.60 99.68 99.75

-I

0

z
r-I

United States.......................10-09 Brazil.............. ............... 03-02 Netherlands.........................01-12 Spain............................. 0908 Germany. W.......................01-12 France............................ 01-12 Belg.-Lux...........................01-12 Argentina...........................04-03 Denmark..........................01-12 Greece............................01-12 Norway...........................01-12 Portugal............................01-12 Italy ............................... 01-12 U.K ............................... 01-12 Malaysia............................ 01-12 Canada............................. 08-07 Japan .............................. 01-12 China, P. R.......................... 10-09
Singapore........................... 01-12

v
C,)

0

m

z

Co)

20

Paraguay........................... Totals Top-20 ........................ Others ....................... All ..........................

04-03

21,864.6

Source: USDA, FAS, Foreign Agriculture Circular, Oilseeds and Products, FOP 6-18 'The market year begins in the year before, or Jan. 1, of the year indicated in the northern hemisphere or near the equator, and in the year indicated for the southern hemisphere countries and some near the equator.

TABLE 13. SOYBEAN OIL: WORLD IMPORTS, BY COUNTRIES,

1977-81 (000 METRIC TONS)
1980 690 250 250 145 100 50 94 100 68 70 53 88 95 62 70 32 36 45 45 51 2,394 517 1981 600 270 260 149 120 200 87 100 86 91 75 110 50 64 32 20 40 50 50 55 2,509 669
3,178

N~

Rank 1977-81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Country

Mkt. yr.'

1977 440 158 97 131 85 0 91 52 100 52 60 22 11 55 20 77 60 38 39 35

1978 510 288 181 126 184 107 110 96 82 53 80 50 29 57 52 73 83 49 41 19
2,270

1979 555 200 260 149 122 144 109 96 79 46 0 81 25 74 42 20 53 45 52 2,239 605
2,844

1977-81 Av. 559.0 233.2 209.6 140.0 122.2 100.2 98.2 88.8 83.0 70.6 62.8 54.0 53.2 52.6 49.6 48.8 47.8 47.0 44.0 42.4 2,207.0 508.6
2,715.6

Cum~. Pct. 20.58 8.59 7.72 5.16 4.50 3.69 3.62 3.27 3.06 2.60 2.31 1.99 1.96 1.94 1.83 1.80 1.76 1.73 1.62 1.56 Pct. 20.58 29.17 36.89 42.05 46.55 50.24 53.86 57.13 60.19 62.79 65.10 67.09 69.05 70.99 72.82 74.62 76.38 78.11 79.73 81.29

I

India............................. 10-09 Iran.............................. 08-07 Pakistan............................01-12 Morocco............................01-12 China, P.R.........................10-09 U.S.S.R. .......................... 01-12 France............................01-12 Germany, W.......................01-12 ................ 01-12 Italy.............. Columbia...........................01-12 Nigeria.............................0112 09-08 Yugoslavia .......................... 09-08 Turkey ............................. 01-12 Sweden ............................ U.K ............................... 01-12 Netherlands......................... 01-12 01-12 Peru............................... 01-12 Chile .............................. 01-12 Austria ............................. Bangladesh.......................... 07-06 Totals Top-20 ........................ Others ....................... All ..........................

w

C)
C CI c I-

1,623
335 11,958

417 2,67

m x
m

2,911

Source: USDA, FAS, ForeignAgriculture Circular, Qilseeds and Products, FOP 6-18, March, 1981. 'The market year begins in the year before, or Jan. 1, of the year indicated in the northern hemisphere or near the equator, and in the year indicated for the southern hemisphere countries and some near the equator.

m z
Co) -I

0

z

TABLE 14. SOYBEAN OIL, U.S. EXPORTS, BY COUNTRIES OF DESTINATION, 1977-1981

(000

METRIC

TONS)
z
Cun. Pct. 25.16 39.15 45.75 52.15
5840

Rank 1977-81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Country

1977

1978 248 96 54 44 106 69 26 40 18 30 28 14 22 21
*13

1979 181 163 181 84 59 29 22 46 33 5 21 17 23 16 0 19 24 5 10 951 108 1,059

1980 428 147
*

1981 62 126 0 60 26 41 39 25 25 22 8 22 23 16 53 0 15 15 15 5 598 141 739

India ........................................ 252 Pakistan ..................................... 119 Iran ......................................... 72 Columbia .................................... 27 China P.R. .................................. 0 Peru ........................................ 57 Ecuador ..................................... 16 Bangladesh................................... 4 Dominican R................................. 5 Mexico ...................................... 15 Canada ...................................... 26 Haiti ........................................ 17 Chile ........................................ 12 Australia ..................................... 20 Venezuela.................................... 0 Brazil........................................ 0 Panama...................................... 13 Poland....................................... 0 Somalia ...................................... * Israel........................................ 3 T1otals Top-20.................................. 658 Others............ ..................... 45 All ..................................... 703

0 8 2 5 6 837 96 933

83 100 36 35 21 23 31 15 23 13 16 10 76 18 4 14 10 1,103 117 1,220

177-81 Av. 234.2 130.2 61.4 59.6 582 46.4 27.6 27.2 20.8 20.6 19.6 18.6 18.6 17.8 15.2 15.2 14.6 9.0 7.8 6.8 829.4 101.4 930.8

Pct. 25.16 13.99 6.60 6.40 625 4.98 2.97 2.92 2.23 2.21 2.11 2.00 2.00 1.91 1.63 1.63 1.57 0.97 0.84 0.73

0

z
r

63.38 66.35 69.27 71.50 74.71 75.82 77.82 79.82 81.73 83.36 84.99 86.56 87.53 88.37 89.10

0

v

z

Source: USDA, ERS, ForeignAgricultural Trade of the United States, Bi-monthly and yearly supplements.
* 500 metric tons or less.

N0

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ALABAMA AGRICULTURAL EXPERIMENT STATION

India has consistently accounted for a large percentage of the world's imports of soybean oil to meet the needs of its large population, table 13. Unlike the People's Republic of China, which produces most of what it uses, India consistently does not produce enough edible oils for its domestic needs and should be a good customer for edible oils for some time to come. Over the past 5 years, the United States has contributed an average of 41.90 percent of India's imports of soybean oil, tables 13 and 14. After India, however, a large number of countries import important amounts of soybean oil, but not one stands out in the top 20 as does India, table 13. Also note that nearly 20 percent of the soybean oil imported is accounted for by countries other than the top 20. Much of this is to Third World countries, especially in Africa, which is exported under the PL 480 (Food for Peace) program as a form of foreign aid. While not one of these countries beyond the top 20 is a significant importer individually, together they make up a substantial market for sales of soybean oil and may become important purchasers for hard currency outside the foreign aid channel in the future. U.S. Trade U.S. exports of soybean oil have generally followed the same pattern as the important importers of the world with a few exceptions, table 14. India was the most important customer of the United States for soybean oil from 1977-1981, averaging 25.16 percent of U.S. exports. However, Pakistan is the second most important U.S. customer with 13.99 percent exports. The United States supplied over 62 percent of Pakistan's total imports over the last 5 years. After India and Pakistan, a large number of countries take an important share of U.S. exports of oil, but no other country dominates. There is also an important amount of exports beyond the top 20 accounting for over 10 percent of U.S. exports. ISSUES AND POLICIES This section presents only brief statements of selected issues and policies affecting international trade in soybeans which may affect the economies of the United States and Alabama. Each of these could rate a separate study, and detailed analysis of the impact of each is not possible in this publication. Most of the following statements have been excerpted from the references cited at the end of this publication, especially Jabara (1) and the USDA, ESS (3).

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They should be useful for farmers, agribusinesses, farm and commodity organizations, extension workers, researchers, and others concerned with international trade in soybeans and products in their planning for production and for political action. U.S. Grain Embargoes to the U.S.S.R. and Poland Embargoes have been discussed during the recent "Poland Crisis" by the present U. S. Administration and an embargo was actually carried out against the U.S.S.R. in recent years. This includes soybeans. The Alabama Soybean Association passed a resolution at its annual meeting in January, 1982, stating its opposition to any sort of grain embargo. Members of the Alabama Soybean Association, as well as the American Soybean Association and others, allege that embargoes hurt soybean producers by damaging the United States' reputation as a reliable supplier. This, in turn, encourages other countries to look for other sources of supply in competition with U.S. and Alabama producers. Over time, the United States would tend to become the "supplier-of-last-resort" (countries would only buy from the United States after they have exhausted other sources). The policy of using soybeans and other farm products as instruments of our foreign policy (to punish countries with an embargo when we don't agree with something they do) may also result in the establishment of areas of production which did not exist before in competition with U.S. and Alabama producers. It may take the form, for instance, of actually buying or leasing lands in other countries to grow soybeans and other farm commodities. Japan is already doing this in some cases. The Effect of Exchange Rates Recently the U.S. dollar has been increasing in value relative to most of the currencies of countries who buy U.S. soybeans and soybean products. To the extent that this would make U. S. products relatively more expensive than before in terms of foreign currency, it should have a negative effect on demand for U.S. soybeans and product. Protectionism Versus Free Trade
Most economic theory would hold that trade throughout the

world should maximize global welfare and promote price stability to

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ALABAMA AGRICULTURAL EXPERIMENT STATION

a greater extent than when various protectionist policies and bilateral trade agreements are followed. Since the end of World War II, the goal of U. S. trade policy has been to achieve freer trade. U.S. and Alabama soybean producers have also endorsed this policy through various resolutions. This is especially appropriate for soybean producers as 50-60 percent of U.S. soybeans, including the equivalent in products, have been exported in recent years, and any increase in protectionist policies would have the effect of reducing exports and consequently prices and incomes of U.S. and Alabama farmers. While world trade in grains is heavily influenced by protectionist policies, world trade in soybeans has, so far, remained relatively unhindered. Japan, the second most important single customer for U.S. soybeans in the last 5 years, is not likely to impose trade restrictions, and has agreed to bind the import duty on soybeans at zero at the most recent round of Multilateral Trade Negotiations (Toyko Round, 1979). In the EC-lO, however, sentiment is growing to increase tariffs or quotas on soybeans and soybean meal to reduce chronic dairy product surpluses, curtail the displacement of domestically produced grains in feed rations, and reduce the EC-10's high degree of dependence on imported protein feeds. Also, with the recent admittance of Greece and the future admittance of Spain and Portugal, all surplus olive oil producers, there is increasing pressure to levy a beans tax on all imported edible vegetable oils (including soybean oil), with the tax on olive oil rebated to member countries. Policies of some important customers and competitors of the United States are briefly summarized in the following sections.

EC-lO Present Policies An ad valorem duty of between 4 and 8 percent is levied on U.S. soybean oil for industrial use, and oil for edible use is subject to a 10 to 15-percent ad valorem duty. At the same time, vegetable oils from Lome Convention countries are admitted duty free. Although few of these countries export soybean oil, many export oils competitive with U. S. soybean oil, such as palm oil and coconut oil. The EC-10 has also protected its soybean producers (although few) by establishing "guide prices" since 1974. These are support prices above world market prices. Also, soybean processors receive a subsidy payment equal to the difference between the guide prices and the world price for the purchase of domestic soybeans. These

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policies encourage domestic production in competition with the United States and encourage purchase of local beans when available. Japan's Present Policies Tariff levels on imports of soybeans and meals are bound at zero by GATT. Soybean oil imports, however, are levied at specific tariffs of 17 to 23 yen per kilogram ($U. S. 0.08-0.11). Soybean producers in Japan benefit from guaranteed support prices that are higher than equivalent world market prices. However, Japanese production is largely food-quality beans whereas U. S. imports are crushed for oil and meal. Japanese farmers who cultivate soybeans on rice paddy fields also receive a "diversion payment" in addition to the guaranteed price for the soybeans. The difference between the producer price and the standard market price paid by consumers is subsidized by the government. Japan often makes use of bilateral trade agreements to guarantee supplies. Japan signed a trade agreement in 1975 with the United States which guaranteed Japan 3 million tons of soybeans over a period of 3 years (1). Brazil's Present Policies The Brazilian government provides credit for soybean growers at interest rates well below the level of inflation on production loans based on historical yield averages. Farmers can borrow up to 100 percent of the estimated cost of production. Export of soybeans and derivative products have been under the control of the Bank of Brazil's foreign trade office since 1958. Since that date the office has used a variety of export quota and licensing schemes to control exports. Currently, soybean meal and oil are exported under a global export quota system. The system is designed to ensure that sufficient oil and meal are available to keep domestic prices at or below domestic price ceilings. Exports licenses are required for some exports. The Brazilian government favors exports of soybean oil and meal rather than whole beans through special financing arrangements and income tax deductions. Processors receive subsidized credit at an annual interest rate of 8 percent to finance production of soybean oil and soybean meal destined for export. In addition, earnings from soybean oil exports are not subject to income taxes. In contrast, corporate income is taxed at 30 percent.

34

ALABAMA AGRICULTURAL EXPERIMENT STATION

Argentina's Present Policies The government influences exports of oilseeds and derivative products by requiring exporters to register with the National Grain Board, which restricts export registrations if domestic needs appear to be in jeopardy. Export taxes promote the export of processed soybean products over whole soybeans. Rebates may be applied to encourage a product, such as a 10 percent rebate, for export of soybean oil since 1980.

Tennessee-Tombigbee Waterway and Port of Mobile Expansion The Alabama Soybean Association passed a resolution at its annual meeting in January, 1982, urging completion of the Tennessee-Tombigbee Waterway and expansion of the port facilities at Mobile. These developments would not only aid Alabama farmers by providing a stronger alternate market to the domestic market, but could save money for corn belt and other up-river producers by providing a closer alternative port for export. For example, the distance from Mt. Vernon, Indiana, to Mobile, Alabama, when the Tennessee-Tombigbee waterway is completed, will be approximately 842 miles compared with 1,124 miles to New Orleans, a saving of 282 miles (1). For another example, soybean oil or meal could be shipped from the crushing plant at Decatur, Alabama, to Mobile., Alabama, with a savings of 732 miles (543 miles compared with 1,275 miles to New Orleans). Soil Mining Aspects of Soybean Production It is alleged that increased exports of soybeans in the United States in recent years and possible increases in the future may "mine" U.S. soil and result in declining yields over time as more soybeans are produced than necessary for domestic needs. This issue was discussed at the annual meeting of the Alabama Soybean Association and it was agreed that more needs to be known about this allegation. At present, the USDA, SCS is working on a linear programming model of crop production in Alabama in which soil erosion from different crops is estimated.

Requirements for Shipping in U.S. Vessels Certain percentages of U. S. grain exports by law must be shipped overseas in U.S. vessels. To the extent that the U.S. vessel rates are higher than foreign rates, this represents a tax on U.S. exporters of soybeans. This issue was discussed at the Alabama Soybean Association meeting in January, 1982, and some participants felt this policy was costing U.S. and Alabama soybean producers several cents a bushel in profit from exporting. This is a topic which could be studied further and documented. However, political considerations have appeared to be more important than cost of shipping considerations in the past, and it would be difficult to repeal this requirement. SUMMARY AND CONCLUSIONS International trade in soybeans is extremely important to Alabama agriculture in that more than 1 out of every 2 acres of harvested cropland constitutes Alabama's export share of U.S. exports. The value of Alabama's export share was $203.6 million in 1980. The United States is the world's most important soybean producer with nearly two-thirds of world production. Only Brazil, the People's Republic of China, and Argentina are other significant producers and competitors with the U.S. and Alabama. The U.S. and these three countries accounted for 93.69 percent of the world's soybean production in 1977-1981. The U.S. accounted for 81.73 percent of the whole soybeans, 38.82 percent of the soybean meal, and 33.66 percent of the soybean oil exported in the world in 1977-1981. Competitors with the United States for the whole soybean trade were Argentina and Brazil with 9.01 and 5.65 percent of the world exports, respectively. Competitors in the world soybean meal trade were Brazil, Netherlands, West Germany, Belgium-Luxembourg, and Argentina with 38.82, 8.64, 6.60, 3.01, and 1.73 percent of exports, respectively. Competitors in the world soybean oil trade were Brazil, Netherlands, Spain, West Germany, France, Belgium-Luxembourg, and Argentina with 22.61, 11.30, 10.17, 7.93, 4.33, 4.05, and 2.56 percent of exports, respectively. Importers of whole soybeans and meal are mostly the industrialized countries of Europe and Japan while importers of oil involve a large number of countries of the world with India the most important importer of soybean oil.

The most important customers for U.S. and Alabama soybeans and soybean products include Netherlands and Japan for whole beans with 21.55 and 18.69 percent of U.S. exports, respectively; Netherlands, West Germany, and Italy for meal with 16.61, 14.85, and 11.39 peircent, respectively; and India and Pakistan for oil with 25.16 and 13.99 percent, respectively. Policies most affecting U. S. trade in soybeans include the various policies ofthe EC-10, Japan, Brazil, and Argentina, which either result in restraint of trade or a subsidy to their own producers and processors. While the most important customers for U.S. soybeans and products, the EC-10 and Japan, do not have extremely harmful policies restricting import of U.S. soybean at this time, any more policies in this direction would have a serious impact on the U.S. soybean export market. This is more likely to happen in the EC-10 with the addition of southern European countries which produce surplus olive oil in competition with U.S. soybean oil. Requirements for shipping in U.S. vessels, grain embargoes, the Tennessee-Tombigbee waterway, the Port of Mobile expansion, and soil mining are other issues of concern to U.S. and Alabama soybean producers.

REFERENCES
(1)

(2)

J.R., H.B. STRAWN, ANDJ.L. STALLINGS. Aug. 1979. The Public Grain Elevator of the Alabama State Docks System, The Impact on the Alabama Economy. Alabama Agr. Experiment Station Ag. Econ. Series No. 32. JABARA, CATHY L. Jan. 1981. Trade Restrictions in InternationalGrain and
HURST,

(3)
(4)

(5)

Oilseeds Markets. USDA, ESS, FAER No. 162. USDA, ERS. Foreign Agricultural Trade of the United States, Bi-monthly and Yearly Supplements. Policy Review: Perspectivesfor USDA, ESS, April, 1981. Agricultural-Food the 1980's. AFPR-4. USDA, FAS. March, 1981 (and other monthly issues). Foreign Agriculture Circular, Oilseeds and Products. FOP 6-18.