In 2020, soybean growers received at least $4 billion in taxpayer supports through soy subsidies, bailouts, commodity protection programs, disaster relief, conservation programs, and subsidized crop insurance.
2020 Soy Subsidy Breakdown by the Numbers
$4 billion in taxpayer soy subsidies & bailouts
- CFAP 1: $513,400,000 1
- CFAP 2: $1,291,829,737 (as of Dec 31, 2020) 2
- ARC/PLC : $669,784,0003
- Crop Insurance: $1,266,516,0004
- Market Facilitation Program: Unclear, but probably between $300 million and $1 billion. For the purposes of this article, and until we are able to find more reliable data, we conservatively estimate that at least $250 million was paid to soy growers out of the $3.7 billion paid out to all producers in 2020 via the MFP program.5,6
- Conservation Programs: Unclear.
- Disaster Relief: Unclear.
The Soy Checkoff Program reports that as much as 77% of soy is fed to livestock, which is consistent with the global statistics for soy usage.
Just like corn, most soy feed is for poultry. For reference, the next graph shows the global breakdown of soy consumption by species.
According to the USDA,
Just over 70 percent of the soybeans grown in the United States are used for animal feed, with poultry being the number one livestock sector consuming soybeans, followed by hogs, dairy, beef, and aquaculture. The second-largest market for U.S. soybeans is for the production of foods for human consumption, like salad oil or frying oil, which uses about 15 percent of U.S. soybeans. A distant third market for soybeans is biodiesel, using only about 5 percent of the U.S. soybean crop.USDA Soybean Coexistence Fact Sheet7
We feed algae to cows, and soy to fish
According to US Soy, soy can constitute up to 1/3 of farmed fish feed8
Global Soy Trade
Reducing Soy Subsidies May have a Downside
If U.S. Soybean producers reduce production, and demand for soy continues to rise in China and the European Union, then Brazil may pick up the slack. That would not be ideal.
Global soy trade is a major source of greenhouse gas emissions for multiple reasons. The conversion of natural vegetation into arable land is probably the most important cause, since the latter generally binds considerably less CO2 than the original ecosystems. Greenhouse gases are also released during the harvesting of soybeans and processing into derived products, the subsequent transport to ports of export and shipment.
The greatest CO2 emissions arise from the so-called MATOPIBA region in the northeast of Brazil. This region still has large areas covered with natural vegetation, particularly forests and savannahs, which have however been increasingly lost to agriculture in recent years. Furthermore, soy exports from municipalities in this region usually entail long transport distances to the ports of export, which are mostly covered by trucks due to the relatively poor infrastructure. Thus, greenhouse gas emissions from transport can be substantial and even surpass the effects of deforestation.
The researchers also investigated which countries generate particularly large quantities of greenhouse gas emissions by importing soy. First and foremost, the world’s largest importer is China, however, the European Union does not fall far behind.University of Bonn 9
Industrial Agriculture / Monocropping
According to the USDA,
Almost 50 percent of corn, soybean, wheat, and cotton acreage was in no-till or strip-till at some time over a 4-year period (including the survey and 3 previous years). But only about 20 percent of these acres were in no-till or strip-till all 4 years.Tillage Intensity and Conservation Cropping in the United States10
On one hand, it’s gratifying to know that no-till and mulch-till are common practices among soy growers. However, farmers till at least 80 percent of these acres every four years. This undoes the benefits of leaving the soil to rest. Fortunately, the Congressional Ag Committees are prioritizing soil health in farm policy11, so good conservation methods such as no-till planting should increase in the near future.
- fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/arc-plc/2019/pdf/2019_arc_plc_payments.pdf pro-rated for 2020 based on Annual top line program amounts (data.ers.usda.gov/reports.aspx?ID=17833)
- www3.rma.usda.gov/apps/sob/current_week/crop2020.pdf p.19