Iowa Public Television

 

South America Competes For Soy Market

posted on July 13, 2001


The Friday announcement of Beijing as the site of the 2008 Olympics may help enhance the climate for trade with China. This year U.S. farm exports are already on the rise. The nation's farm trade surplus grew to 9.4 billion dollars – almost two billion dollars more than a year ago.

Even so, the American share of a growing world market is shrinking. A strong dollar continues to act as a check on American export expansion. And unlike a generation ago, the U.S. is now encountering significant competition in the export market. A case in point is the growing global production capacity for soybeans.

 

South America Competes For Soy Market

In the race to move soybeans to the global marketplace, Brazil, Argentina and China are gaining on the United States.

For example, on at least one river in Brazil, barge traffic has been streamlined, cutting a week off the traditional overland route. Meanwhile, 4,000 miles north on the Mississippi River, 15-barge configurations often wait in line for hours to pass through a series of 80-year old locks. By some industry estimates, each hour of delay costs American farmers an estimated $500.

The higher priced American farmland also now means Brazil is able to produce soybeans about twenty percent cheaper than the U.S. … threatening U.S. export market dominance.

Over the last five years, the U.S. share of world soybean exports has fallen 27% … to just slightly more than half of the global market. In that same time, the Brazilians have more than doubled their share of the soybean export market. The soybean boom in Brazil is partially attributed to political moves by the United States some thirty years ago. In the 1970s and in 1980, U.S. embargoes and threats of short supplies opened the door to Brazilian farmers who were able to build up their country's soy industry. The White House effort to open American highways to Mexican trucks continues to encounter congressional speed bumps. Historically the Mexican vehicles have been restricted to a zone extending about 20 miles north of the U.S. border in four states. As part of an effort to comply with the 1993 North American Free Trade Agreement, the Bush White House is seeking to extend Mexican truck access to the entire country, beginning next January.

But legislation in the House seeks to ban expanded access. And legislation in the Senate calls for a host of measures to be implemented before greater access is granted.


Tags: agriculture Brazil markets news South America soybeans