Global Production Shift
On a very broad level, too, the market has changed considerably over the last decade and more. Perhaps the two most important changes have been the shift in global soybean production and the consolidation of China’s position in the market.
On the one hand, soybean production has moved away from the U.S. to Latin America, in particular to Argentina and Brazil. Since 2000, this has resulted in a drop in the U.S. share of world production from 43 percent to 34 percent, and an increase in the share of Argentina and Brazil from 38 percent to 48 percent.
On the other hand, since 2000, China’s share of global soybean imports has grown from just 28 percent to 65 percent. While the country’s share of global imports may have risen, it is the increase in its share of exports from the U.S. that is particularly important to note.
Back in 1995, of the 851 million bushels the U.S. exported, approximately 2 percent (18 million bushels) were headed off to China. For the 2014/15 marketing year, the USDA estimates that, of U.S. exports of 1.604 billion bushels, some 1.049 billion (65 percent) will go to China.
Global and U.S. Exports to China
Share of World Ending Stocks: 2000-2004 vs 2010-2014
Over the last 10 years, demand from China has accounted for 97 percent of the growth of the global soybean trade. While its consumption of soybean meal has gone up approximately 145 percent in this period, that of the EU and U.S. has gone down. As can be seen, the country has a significant presence in the market.