As U.S. Acreage Vanishes, Soybean Growers Struggle to Satisfy Worldwide Appetite

The Squeeze in Farm Country

Barry Alexander comes from a family that has farmed in Cadiz, Kentucky, for seven generations. He has watched nearby farms shrink as towns and suburbs spread outward.

"Land is going away every day, and that's one commodity they're not going to reproduce," he says.

About half of Cundiff Farms' summer crop is soybeans, which puts Alexander at the center of a larger conflict: U.S. acreage keeps shrinking just as global buyers want more American food.

The country also lost approximately 307,000 farms in that same stretch.

"Whenever that land is gone and gone out of production, it's no longer going to be farmland. The population is increasing, and the demand for food is increasing," he said.

Soybeans are a major American export crop. Access to foreign buyers is central to the farm economy.

China Is the Big Customer

Alexander does not just sell to local mills. "A lot of our product is actually for export. We put it on the rivers here nearby, and it ships down to the Gulf of Mexico to New Orleans and is actually shipped overseas," he said.

China is the biggest buyer of U.S. soybeans, and a share of those exported beans lands there. Purchases fell short of that target as trade tensions under President Donald Trump escalated, then picked up as prices strengthened, according to the American Soybean Association.

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American Soybean Association chairman Caleb Ragland says the relationship is moving the right way but is not finished.

"We're on a positive trend, but we still got a long ways to go to completely hit the targets that they've agreed to," he says.

"Obviously, we've had some bumps in the road in our relationship, but they're too big of a customer to just write off," he adds.

Ragland points out that China's soy consumption exceeds that of all other countries combined. Soy becomes protein feed for pigs and poultry, so a country with a growing appetite for meat keeps buying beans.

"They need our soy protein to help grow and produce their meat protein that their people want," he says.

China currently taxes all U.S. farm goods at 10%, and Chinese officials have discussed lifting it. Ragland says removing it would help American soybeans compete with South American suppliers.

"I mean, that's been a 10% tax that has made us uncompetitive when it comes to the cash price that the Chinese customers would pay for soybeans," he says.

The Checkoff Effect

Farmers are also trying to build demand on their own. A slice of soybean revenue goes into the Soy Checkoff, a research and marketing program run by the United Soybean Board.

It started with the 1990 Farm Bill. Since then, soybean output has grown from 2 billion bushels a year to about 4 billion bushels.

United Soybean Board chairman Brent Gatton says the checkoff has opened doors. "Because of the checkoff, there are thousands of new uses we get. Soy oil is in Goodyear tires and artificial turf, and soy foam is a great success story."

What It Means for Your Portfolio

That modest goal matters beyond farm country, because the same crop that feeds pigs and poultry also winds up in tires, turf, and foam.

Soybeans help set the price of meat, the cost of feed, and the profits of the companies that turn them into finished goods.

The 10% Chinese tax is the big swing factor. If officials lift it, U.S. beans become cheaper for the world's largest buyer, and demand can keep climbing. If the tax stays, farmers will keep hunting for new customers and new uses for every acre they have left.

For your portfolio, this is a story about a fixed resource, a growing global appetite, and the farmers caught in between. When that balance shifts, it shows up in food prices and in the earnings of the companies that depend on agriculture.

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