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 International Food and Agribusiness Management Review
Volume 12, Issue 4, 2009

World Soybean Production: Area Harvested, Yield,

and Long-Term Projections
Tadayoshi Masudaa and Peter D. Goldsmithb
a
Postdoctoral Research Associate, National Soybean Research Laboratory, University of Illinois at Urbana-
Champaign, 1101 West Peabody Drive, Urbana, Illinois 61801, U.S.A.
b
Executive Director, National Soybean Research Laboratory, and Associate Professor, Department of Agricultural
and Consumer Economics, University of Illinois at Urbana-Champaign, 1101 West Peabody Drive,
Urbana, Illinois 61801, U.S.A.

Abstract

Soybeans (Glycine max) serve as one of the most valuable crops in the world, not only as an oil
seed crop and feed for livestock and aquaculture, but also as a good source of protein for the
human diet and as a biofuel feedstock. The world soybean production increased by 4.6%
annually from 1961 to 2007 and reached average annual production of 217.6 million tons in
2005-07. World production of soybeans is predicted to increase by 2.2% annually to 371.3
million tons by 2030 using an exponential smoothing model with a damped trend. Finally, three
scenarios and their implications are presented for increasing supply as land availability declines.
The scenarios highlight for agribusiness policy makers and managers the urgent need for
significant investments in yield improving research.

Keywords: Soybean, production, yield, land use, long-term projection, exponential smoothing
with damped trend


Corresponding author: Tel: + 1.217. 244.1706
Email: [email protected]

Other contact information: T. Masuda: [email protected]

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Introduction
Soybeans (Glycine max) are one of the most valuable crops in the world not only as an oil seed
crop and feed for livestock and aquaculture, but also as a good source of protein for the human
diet and as a biofuel feedstock. Rapid soybean demand increases in the last decade challenge the
reliability of supply, stock levels, and reasonable pricing. In just the past two years soybeans
have topped $16.00 per bushel (July 3, 2008) and Argentina, the world’s third largest producer,
had a 30% reduction in output due to drought in 2009. In order to meet the demand, there are
two alternatives: increase planted hectares or increase yield (tons/ha). 1 This paper examines the
long range forecasts of soybean production as well as area harvested and yield using time series
model and scenario analysis. The results and the accompanying scenario analysis demonstrate
for policy makers and managers both the challenges of meeting demand growth with limited
supplies of arable land, and the need for public, private, and farmer investments to increase
yields.

Increasing soybean hectares by: substituting for other crops (e.g. sunflower in Argentina or
cotton in the United States); utilizing pasture (e.g. Santa Fe, Argentina or Mato Grosso, Brazil);
or replacing native vegetation (e.g. cerrado in Brazil) has been the most expedient manner to
increase soybean output. World soybean production increased 36% since 2000 (Figure 1).
World-wide soybean harvested acres though increased 28% and drove 81% of the increased
production. Yield increased only six percent since 2000 and contributed only 19% to the
increase. Going forward available farmland for soybean production will be limited by decreasing
quantities of land not already in production, increased farmland loss for urbanization, heightened
sensitivities about agricultural uses of land, and weak property rights in regions such as Africa
that constrains the employment of modern agricultural methods (Goldsmith 2008b).

Figure 1. World Soybean Production and Area Harvested: 1961-2007

Source: FAOSTAT and authors’ calculation.

1
Reducing losses also increases the available supply, but would have minor impact on the overall supply-demand
balance.

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This paper has four objectives: 1) examine the contribution of increased land use as a component
of overall production; 2) analyze the contribution of yield to overall production across major
producing countries; 3) estimate the long range production quantities of soybeans at country and
international levels; and 4) use scenario analysis to help policy makers and mangers think about
the implications of these trends on policy and strategy.

Soybean Production: Historical View (1961-2007)

Production

The world annually produced 28.6 million metric tons of soybeans in 1961-65, and reached
217.6 million metric tons in 2005-07. The quantity increased 7.6 times during the half century.
The USA produced more than 50 percent of the world soybean production until the 1980s but
that share has declined to 37.0% in 2005-07(Figure 2). Brazil and Argentina though have
significantly increased their shares steadily over the same period. Brazil is the second largest
producer with 53.9 million tons, or 24.8% of world production. Argentina ranks third producing
41.4 million tons and 19.0% of world output. The top five countries; United States, Brazil,
Argentina, China, and India, produce more 92% of the world’s soybeans.

Figure 2. Shifts of Soybean Production Shares of Top 7 Countries plus Continents

Note. 5-year average. 2005-2007 is the three-year average.
Source: FAOSTAT and authors’ calculation.

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Land Use

The area harvested rose significantly with the dramatic increase in production outside the United
States. The world soybean area harvested approximately quadrupled from 24.7 million ha in
1961-65 to 94.1 million ha in 2005-07. During the half century, the USA and China decreased
their shares of soybean area harvested to 31.7% (29.9 million ha) and 9.8% (9.2 million ha)
respectively in 2005-07, while Brazil and Argentina increased their shares to 23.3% (21.9 million
ha) and 16.0% (15.1 million ha), respectively, (Figure 3).

Figure 3. Shifts of Soybean Area Harvested Shares of Top 7 Countries plus Continents
Note. 5-year average. 2005-2007 is the three-year average.
Source: FAOSTAT and authors’ calculation.

Yield

The world average soybean yield doubled from 1.16 metric tons per ha in 1961-65 to 2.31 metric
tons per ha in 2005-07 (Figure 4). Out of the top 5 soybean production countries, Argentina
reached 2.74 metric tons per ha while India produces about one metric tons per ha. The
quadrupling of the area harvested and a doubling of the yield since 1961 has increased world
soybean production 7.6-times. During the same period, the main production area has shifted
from the USA and Asia (China and India) to the USA and South America, especially Brazil and
Argentina.

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Figure 4. Changes in Soybean Yield by Country and World Average: 1961-2007

Note. 2005-2007 is 3-year average.
Source: FAOSTAT and authors’ calculation.

Literature Review

A number of models have been used to forecast soybean production. Rosegrant et al. (2001)
provide both baseline projections and alternative scenarios of global food supply, demand, trade,
and malnutrition in 2020. Their International Model for Policy Analysis of Agricultural
Commodities and Trade (IMPACT) model analyzes impacts on alternative scenarios but does not
provide the data granularity at the country, land use, and yield levels. OECD-FAO (2009)
provides only a 10-year assessment of future prospects in the major world agricultural
commodity markets though 2018 and aggregates all oilseeds into one class. This does not allow
focus on the special case of soybeans. The USDA (2009) also provides 10-year projections for
the agricultural sector including soybean sector through 2018 but focuses on U.S. agriculture.

Box-Jenkins ARIMA (Autoregressive Integrated Moving Average) estimation provides excellent

flexibility for time series forecasting not only for addressing auto-correlated errors, but exploring
non-zero trends, the smoothing of trends and levels, and dampening forecast estimates.
Exponential smoothing helps correct for the large fluctuations common in production data
(Ferbar et al, 2009). In our case data quality is problematic and adds to large fluctuations
because we require a methodology suitable for all 179 countries in our dataset. Additionally,
previous research has found improved forecast performance when a dampening coefficient is
employed, especially when forecast length approaches fifty percent of the historical series
(Miller and Liberatore, 1993). In our case we project 23 years into the future.

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Finally, when using Box-Jenkins ARIMA approach to forecast a constructed variable, in our case
production as a function of area and yield, , it is not clear whether it is better to
forecast A and Y separately to produce the forecast, or to forecast P directly (Kennedy, 2003).
While there is no conclusive evidence as to the choice between the direct forecast of aggregated
variables (production, P) and the indirect forecasts as the product of forecasts of the components
(area harvested, A, and yield, Y), indirect forecasts tend to outperform direct forecasts (Kang,
1986).

Methodology
Our overall objectives are to estimate and analyze country-level projections through the year
2030, focusing on land and yield as components of production. We forecast explicitly A and Y
then produce P following Kang (1986) and consistent with Rosegrant et al. (2001 and 2002) and
OECD-FAO (2009).2 We define the following: soybean production in terms of P (metric tons);
area harvested in terms of hectares, A (ha); and soybean yield, Y (tons/ha) as P divided by A.

This yields the following relationship:

Production growth rate ( ) is disaggregated into yield growth rate ( ) and area harvested growth
rate ( ) to obtain:

Multiplying area harvested (A) and yield (Y) after estimation derives soybean production
quantities (P). The two variables by country and continent are estimated individually as
univariate time series (Equation 1). Box-Jenkins ARIMA type univariate time series models can
be exponentially smoothed and include a damped trend in order to improve forecast performance
(See Gardner and McKenzie, 1985; Hamilton, 1994; Mills, 1990). Introducing a damped trend
into exponential smoothing makes sense as growth rates in yield and expansion of harvested land
begin to plateau over time.

Following Gardner and McKenzie (1985) and Gardner (1985), the general damped-trend linear
exponential smoothing model is as follows:

(1)

where is area harvested or yield at time t, is the level of area harvested or yield at time t,
is parameter at t, t is the time trend or year, and is error term at t.

The smoothing equations are:

Level: , and

2
We also provide the readers forecasts of direct estimation in the Appendix.

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Trend:
where = smoothed level at t of the series, computed after is observed,
= smoothing parameter for the level of the series,
= trend modification or damping parameter,
= smoothed trend at the end of period t, and
= smoothing parameter for trend.

The error-correction form of the smoothing equations is:

, and

where is a one-period-ahead forecast error.

The forecast for k period(s) ahead from origin t is:

.
If , the trend is damped and the forecasts approach an asymptote given by the
horizontal linear line or plateau: . The equivalent process is ARIMA (1, 1, 2)3
process that is written as:
,

where , and
.

If , the model is equivalent to the standard version of Holt’s (1960) model and the trend is
linear. The equivalent process is ARIMA (0, 2, 2):

where , and
.

Model permutations are commonly compared using both mean squared error (MSE) and mean
absolute deviation (MAD) statistics. See Gardner (1985) and Ferbar et al. (2009) for excellent
applications of MAD and MSE when comparing forecast models. The MSE gives more weight
to large errors and is thus a more conservative fitness criterion than the MAD. The MSE is
chosen as the error measurement in this study in order to avoid over amplifying the forecast
estimates for the period (2008-2030). For the damped trend, is set as the default when
attempting to identify the best combination of level and trend parameters ( and ). For a few
countries a lower damped default coefficient was employed as the default of was too
high and drove trends negative.

3
In the general ARIMA (1, 1, 2), .

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Table 1. Parameters for Exponential Smoothing

a. Area Harvested
Coutry/continent Level Trend Damped Fcst MSE*
USA 0.90 0.05 0.98 1.943E+12
Brazil 0.90 0.10 0.98 1.247E+12
Argentina 0.70 0.30 0.98 1.908E+11
China 0.90 0.05 0.98 3.777E+11
India 0.90 0.20 0.98 7.709E+10
Paraguay 0.80 0.20 0.98 1.058E+10
Canada 0.60 0.10 0.98 2.693E+09
Rest of EUAS 0.90 0.30 0.98 6.688E+10
Rest of America 0.10 0.25 0.98 1.509E+10
Africa 0.90 0.05 0.98 6.782E+09
Oceania - - - -

b. Yield
Level Trend Damped Fcst MSE
USA 0.20 0.05 0.98 4.143E-02
Brazil 0.40 0.05 0.98 4.998E-02
Argentina 0.30 0.05 0.97 8.137E-02
China 0.50 0.05 0.98 1.064E-02
India 0.60 0.05 0.98 2.393E-02
Paraguay 0.40 0.30 0.80 5.083E-02
Canada 0.10 0.05 0.95 6.781E-02
Rest of EUAS 0.90 0.05 0.98 7.888E-03
Rest of America 0.30 0.05 0.98 2.694E-02
Africa 0.90 0.05 0.98 6.704E-03
Oceania 0.40 0.05 0.98 1.004E-01
Notes. *Forecasting mean square error is minimized to determine the level and
trend parameters. Sample period is 1961-2007. The number of observation is 47.

Data

Soybean production and area harvested data are provided by FAOSTAT, which is commonly
used in agricultural economic analysis and for projections (e.g., OECD-FAO (2009) and
Rosegrant et al. (2001)). Specifically we estimated forecasts for the 21 soybean producing
countries that produce 99 % of the world’s soybeans. We selected for analysis the seven top
producing countries (USA, Brazil, Argentina, China, India, Paraguay, and Canada) and 4
continents (Africa, Oceania, Rest of Eurasia, and Rest of America). These seven countries
represent more than 95% of world soybean production in 2005-07. We analyzed soybean
production, yield, and area harvested from 1961 to 2007 for each country and continent.

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Estimation Results
The world soybean production compound annual growth rate for 1961-2007 (46 periods) is,

, and can be disaggregated into = 3.1 % and = 1.5 %. In the

long term, of the 4.6% annual growth in tonnage produced, the increase in yield accounted for
1.5%, or 33% of the growth in production. After 1990s, however, the contribution of yield
growth to production growth declined. The compound annual growth rates of world average
soybean yield were 1.4 % in 1990-95 and 1.3% in 1995-2000, then 0.0% in 2000-05 and -0.9%
in 2005-07 (Figure 5). The world soybean production growth rates during the above four periods
(3.2%, 4.9%, 3.8% and 0.4%) are supported by the area harvested growth rates (1.8%, 3.5%,
3.8%, and 1.3%).

Figure 5. Annual Growth* of World Soybean Production, Area Harvested, and Yield
Notes. *Compound Annual Growth Rate = .
The production growth rate is disaggregated into area harvested and yield growth rates. 1961-65 is 4 periods.
2005-07 is 2 periods. Others are 5 periods.
Source: FAOSTAT and authors’ calculation.

The world soybean production is projected at 311.1 million metric tons in 2020 and 371.3
million metric tons in 2030 (Table 2). The annual growth rates are 2.9% from 2005-07 to 2010,
2.5% from 2010 to 2020, and 1.8% from 2020 to 2030. The estimated quantity level in 2030 is
approximately 1.7 times greater than that in 2005-07.
During the forecast period, Argentina’s production rises rapidly by 4.5% annually from 2010 to
2020 and 2.8% from 2020 to 2030, when it reaches 108.4 million metric tons in 2030. At that
time, Argentina is projected to become the top soybean grower, producing 29.2% of the world’s
output.

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Table 2. World Soybean Production Projection Summary

a. Soybean production and share
Country/continent metric mil tons Share
2005-07 2010 2020 2030 2005-07 2010 2020 2030

World Total 217.6 243.9 311.1 371.3 100.0% 100.0% 100.0% 100.0%
USA 80.6 85.1 92.9 99.5 37.0% 34.9% 29.9% 26.8%
Brazil 53.9 60.0 78.3 94.8 24.8% 24.6% 25.2% 25.5%
Argentina 41.4 52.9 81.9 108.4 19.0% 21.7% 26.3% 29.2%
China 15.8 15.8 16.6 17.2 7.3% 6.5% 5.3% 4.6%
India 8.9 10.7 15.0 18.9 4.1% 4.4% 4.8% 5.1%
Paraguay 3.9 4.1 5.2 6.5 1.8% 1.7% 1.7% 1.7%
Canada 3.1 3.1 3.5 3.8 1.4% 1.3% 1.1% 1.0%
Rest of EUAS 5.8 6.2 8.1 9.6 2.7% 2.6% 2.6% 2.6%
Rest of America 2.7 4.1 7.4 10.1 1.2% 1.7% 2.4% 2.7%
Africa 1.4 1.6 2.1 2.5 0.6% 0.7% 0.7% 0.7%
Oceania 0.0 0.0 0.0 0.0 0.0% 0.0% 0.0% 0.0%

b. Compound annual growth rate

Country/continent Compound annual growth rate
2005/07-2010 2010-2020 2020-2030
World Total 2.9% 2.5% 1.8%
USA 1.4% 0.9% 0.7%
Brazil 2.7% 2.7% 1.9%
Argentina 6.3% 4.5% 2.8%
China 0.1% 0.5% 0.4%
India 4.7% 3.5% 2.4%
Paraguay 1.3% 2.4% 2.1%
Canada 0.0% 1.1% 0.8%
Rest of EUAS 1.6% 2.6% 1.8%
Rest of America 11.4% 6.0% 3.2%
Africa 4.2% 2.5% 1.8%
Oceania -10.3% 0.9% 0.7%
Source: FAOSTAT and authors’ estimation.

The United States becomes the second largest producer (99.5 million metric tons) and its share
declines to 26.8%. Brazil becomes the third largest soybean producer in the world and produces
94.8 million metric tons (25.5%) of soybeans in 2030. China and India will continue to increase
their production quantities to 17.2 and 18.9 million metric tons in 2030, respectively. China
decreases its share to 4.6% while India increases its share to 5.1% in 2030. These top 5 countries
will still produce more than 90 percent of the world soybean supply.

Out of the annual 2.5% and 1.8% production growth in the decades of the 2010s and in 2020s,
the area harvested contributes 1.9% in 2010s and 1.3% in 2020s, respectively (Table 3). The
world total soybean area harvested increases to 140.9 million ha in 2030, which is 1.5 times
larger than the area harvested in 2005-07. Argentina and Paraguay steadily increase their

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soybean harvest areas and reach 31.4 million ha and 5.0 million ha, respectively, in 2030. India
also increases its area harvested to 14.6 million ha. These three countries also increase the shares
of area harvested in the world. Since the USA and Brazil’s areas harvested increase moderately,
their shares decline to 25.0% and 21.7%, respectively, in 2030.

Table 3. World Soybean Area Harvested Projection Summary

a. Soybean area harvested and share
Country/continent million ha Share
2005-07 2010 2020 2030 2005-07 2010 2020 2030
World Total 94.1 102.5 123.6 140.9 100.0% 100.0% 100.0% 100.0%
USA 29.9 31.3 33.5 35.2 31.7% 30.5% 27.1% 25.0%
Brazil 21.9 22.4 26.9 30.6 23.3% 21.9% 21.8% 21.7%
Argentina 15.1 18.5 25.6 31.4 16.0% 18.0% 20.7% 22.3%
China 9.2 9.0 9.0 9.1 9.8% 8.7% 7.3% 6.4%
India 8.2 9.5 12.3 14.6 8.7% 9.3% 10.0% 10.4%
Paraguay 2.2 2.7 4.0 5.0 2.3% 2.7% 3.2% 3.5%
Canada 1.2 1.3 1.5 1.6 1.3% 1.2% 1.2% 1.1%
Rest of EUAS 3.9 4.4 5.6 6.6 4.1% 4.3% 4.5% 4.7%
Rest of America 1.4 2.1 3.8 5.1 1.5% 2.1% 3.1% 3.6%
Africa 1.2 1.3 1.5 1.7 1.3% 1.3% 1.2% 1.2%
Oceania 0.0 0.0 0.0 0.0 0.0% 0.0% 0.0% 0.0%

b. Compound annual growth rate

Country/continent Compound annual growth rate
2005/07-2010 2010-2020 2020-2030
World Total 2.2% 1.9% 1.3%
USA 1.2% 0.7% 0.5%
Brazil 0.6% 1.9% 1.3%
Argentina 5.2% 3.3% 2.1%
China -0.7% 0.1% 0.1%
India 3.8% 2.6% 1.7%
Paraguay 6.1% 3.8% 2.3%
Canada 1.7% 1.4% 1.0%
Rest of EUAS 2.9% 2.5% 1.6%
Rest of America 10.8% 5.8% 3.1%
Africa 2.8% 1.4% 1.0%
Oceania -10.2% 0.0% 0.0%
Source: FAOSTAT and authors’ estimation.

During the same projection period, the world average soybean yield contributes 0.6% in 2010s
and 0.5% in 2020s to supply (Table 4) and reaches 2.64 tons per ha in 2030. Argentina’s yield
increases steadily and exceeds 3.0 tons per ha in 2020 then approaches 3.5 tons per ha by 2030.
Brazil’s yield reaches 3.0 tons per ha by 2030. The growth of yield in the USA, starting from a
higher base, continues to increase moderately but plateaus in 2030 at 2.8 tons per hectare. The
yields of China and India are 1.90 tons per ha and 1.29 tons per ha, respectively, in 2030 and
both do not reach 2.0 tons per ha.

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Table 4. World Soybean Yield Projection Summary

a. Soybean yield
Country/continent metric tons / ha
2005-07 2010 2020 2030
World Average 2.313 2.379 2.516 2.636
USA 2.703 2.722 2.777 2.823
Brazil 2.477 2.679 2.909 3.098
Argentina 2.745 2.864 3.205 3.457
China 1.720 1.771 1.841 1.898
India 1.080 1.120 1.216 1.294
Paraguay 1.816 1.503 1.316 1.296
Canada 2.659 2.491 2.408 2.358
Rest of EUAS 1.500 1.424 1.447 1.466
Rest of America 1.876 1.923 1.955 1.981
Africa 1.154 1.222 1.350 1.456
Oceania 2.205 2.106 2.312 2.480

b. Compound annual growth rate

Country/continent Compound annual growth rate
2005/07-2010 2010-2020 2020-2030
World Average 0.7% 0.6% 0.5%
USA 0.2% 0.2% 0.2%
Brazil 2.0% 0.8% 0.6%
Argentina 1.1% 1.1% 0.8%
China 0.7% 0.4% 0.3%
India 0.9% 0.8% 0.6%
Paraguay -4.6% -1.3% -0.2%
Canada -1.6% -0.3% -0.2%
Rest of EUAS -1.3% 0.2% 0.1%
Rest of America 0.6% 0.2% 0.1%
Africa 1.4% 1.0% 0.8%
Oceania -1.1% 0.9% 0.7%
Source: FAOSTAT and authors’ estimation.

Scenarios
The following three scenarios highlight the interplay between land use and yield when
addressing the future forecasted soybean demand of 371 million metric tons. The pressure to
dedicate current or new agricultural lands to soybeans will be great unless yields can be
increased. This pressure to meet demand is not simply an agricultural question of crop
substitution. Societies and their governments will increasingly wrestle with preserving native
biomes versus converting land to crop agriculture.

Arable land for soybeans is limited over the long run and a yield plateau appears to exist around
3.00 tons per hectare for most producing countries. Only Argentina appears to be on a trajectory
to reach 3.50 tons per hectare by 2030. Specht et al. (1999) discuss the biological limit to

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soybean yield improvement in the USA and argues the 4.00 tons per ha milestone could be
achieved by 2029 but would more likely take significantly longer. Recent research in Illinois
shows little yield growth in public variety trials since 2000 (Goldsmith 2008a). The USA and
Argentina currently hold the highest yields at, 2.7 tons/ha, 17% greater than the world average
yield.

We propose three future yield scenarios where the forecasted production of 371 million metric
tons is held constant:

• Scenario 1: This is the benchmark case and reflects the above forecast where world
average yield increases annually by 0.5% and reaches 2.64 tons per ha. World total area
harvested increases annually by 1.7% and reaches 140.9 million ha in 2030 assuming
moderate yield growth (Figure 6).

Figure 6. Scenarios for World Soybean Area Harvested and Yield to 2030

• Scenario 2: The “Specht” scenario imagines a high annual growth rate in yield where
world average yield rising from current levels of 2.31 metric tons per hectare to 4.00
tons/ha by 2030. Such a scenario would involve significant investment in agricultural
research, but would lead to large dividends in terms of reducing land use pressures to
meet growing demand.

• Scenario 3: This scenario is pessimistic in that the annual yield growth rate slows from
the forecasted level of 0.55% per year to 0.00% per year. Reduced levels of agricultural
research investment occur as public priorities shift, say to alternative crops, or private
priorities follow crops with higher returns on investment. Numerous authors have
identified monopoly rents arising from patent, trademark, and trade secret practices as a
key driver in seed innovation and associated productivity gains in agriculture (Quaim and
De Janvry, 2003; Lapan and Moscini, 2004; Endres and Goldsmith, 2007). Weak
intellectual property (IP) rights directly challenge the formation of monopoly
opportunities and incentives for private sector investment. Private seed firm research
investments are diverted from IP vulnerable crops such as soybeans to an IP protected

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crop4 such as maize (Goldsmith et al., 2006). Thus differing returns to research across
crops dramatically affect private investment flows and resulting productivity growth
rates. Public or farmer led investment may then be necessary to fill the void where public
priorities for investment remain high but private incentives are weak.

Scenario 1: Annual Yield Growth remains at its current trend of 0.55% during the forecast
period

As a benchmark scenario, world average soybean yield reaches 2.64 tons/ha in 2030 when the
annual growth rate of the world average yield increases 0.55% per year during the estimation
period. This is the most likely case and reflects the estimation using the above damped-trend
exponential smoothing model. The world total soybean area harvested grows by 1.70 %
annually and reaches 140.9 million ha in 2030 to meet expected demand. Such land expansion
would be 1.5 times greater than 94.1 million ha in 2005-07.

Scenario 2: Specht optimistic scenario: yield level reaches 4.00 tons/ha in 2030

Specht et al. (1999) state that the United States soybean yield could reach 4.00 tons per ha by
2029. Accelerating investments in genetics, cultural practices, and technology transfer
mechanisms, combined with a focus on low-but potentially high yield settings, would be
necessary to achieve these goals. Currently (2005-07 average) the soybean yields in the USA,
Brazil, and Argentina are 2.70, 2.48, and 2.75 tons per ha, respectively. On the other hand,
China and India’s yields are 1.72 and 1.08 tons per ha, respectively. To reach the 4.00 tons per
ha target, the average yield growth needs to accelerate from its base level of 0.5% to 2.3% per
year. During the period, the world total soybean production increases annually by 2.2% and
reaches 371.3 million metric tons (Table 5). Under this optimistic yield growth scenario the
world soybean area harvested would decline to 92.8 million hectares thus requiring 1.3 million
fewer hectares to meet demand of 371.3 metric tons in 2030.

Table 5. Scenarios for World Soybean Area Harvested and Yield to 2030
World Total/Average Year 2005-07 CAGR Year 2030
a b b/a
Production (mil. metric tons) 217.6 2.2% 371.3 1.7
Scenario 1 (estimation results)
Area Harvested (mil. ha) 94.1 1.7% 140.9 1.5
Yield (tons/ha) 2.3 0.5% 2.6 1.1
Scenario 2 (higher yield growth)
Area Harvested (mil. ha) 94.1 -0.1% 92.8 1.0
Yield (tons/ha) 2.3 2.3% 4.0 1.7
Scenario 3 (lower yield growth)
Area Harvested (mil. ha) 94.1 2.3% 160.6 1.7
Yield (tons/ha) 2.3 0.0% 2.3 1.0

4
Due to hybridization

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Scenario 3: Annual yield growth slows to 0.00%

Weak intellectual property rights limit private incentives to invest in soybean research
(Goldsmith et al., 2006). As well increasing demand for liquid biofuels such as ethanol makes
maize investment increasingly attractive in regions such as the Midwest U.S. and Argentina
where the complementarity between maize and soybeans has declined. Soybean yield growth
could decline in the future with reduced soybean research and farmer investment in soybean
production. Greater land expansion, though unlikely, would be needed to meet demand under
such a scenario. Declining availability of land, higher productivity from competing crops, and
greater sensitivity to maintain native biomes will limit the rate of soybean area expansion.
Nevertheless, to meet production forecasts world soybean hectares would need to increase over
65 million hectares to 160.6 million, if yield growth fell to 0.0% per year. At that level, the
world average yield would remain at 2.3 tons per ha.

Discussion and Concluding Remarks

This paper projects soybean area harvested, yield, and production quantities by major counties
and by continent, using Box-Jenkins model employing exponential smoothing with a damped
trend. The world soybean production is forecasted at 371.3 million metric tons in 2030. If 4.00
tons per ha in 2030 is set as the yield target, the world average yield growth needs to increase by
2.3% per year and the area harvested would decline to 92.8 million hectares in 2030 (Scenario
2). On the other hand, if the average yield growth remains at 0.0% per year (Scenario 3),
approximately 160 million ha of soybean area harvested will be needed in 2030 to meet world
demand.

Arable land on the globe is limited and the competition from other crops restricts soybean area
expansion. The expansion of farmland will continue to be constrained as the international
community values environmental stewardship and biome preservation. Since 1990 areas of
arable land and permanent crops in the high growth countries of Brazil and Argentina have
increased 17% or 14.5 million hectares (Figures 7 and 8). During the same period, the forest
areas have decreased 9% or 47.8 million hectares.

Figure 7. Land Use Changes in Brazil (1990-2007)

Source: FAOSTAT and authors’ calculation.

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Masuda and Goldsmith / International Food and Agribusiness Management Review Volume 12, Issue 4, 2009

Figure 8. Land Use Changes in Argentina (1990-2007)

Source: FAOSTAT and authors’ calculation.

According to the estimation results or Scenario 1, Brazil’s soybean area harvested increases from
21.9 million ha in 2005-07 to 30.6 million ha in 2030 and Argentina’s soybean area harvested
grows from 15.1 to 31.4 million ha (recall Table 2). In 2005-07 soybean area harvested already
shares 33% of the cropland in Brazil and 46% in Argentina. The soybean areas harvested under
Scenario 1 is expected increase 1.4 times in Brazil and 2.1 times in Argentina by 2030.
Competing crops will be crowded out, pasture will be converted, and pressure to convert native
biomes will remain in such a scenario.

Therefore, policy shifts and research investment are needed to generate the yield improvements
necessary to meet demand projections. Social and political pressure on land use expansion in
agriculture will only accelerate in the coming years if yields continue to lag. Raising yield
might take either or both of two directions: i) substantial R&D investments in genetics and
agronomics in advanced soybean producing areas to achieve the biological limit, or ii)
technological transfers to low-yield areas under protection of IP rights to help lower producing
counties increase yields.

Acknowledgement
The authors would like to give special thanks to the anonymous reviewers for their assistance in
the preparation of this manuscript.

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Appendix

Direct and Indirect Estimation Results

Following Kang’s (1986) suggestion, A (area harvested) and Y (yield) were forecasted
separately. Then P (production) was calculated as the product of A and Y (P=A×Y). However,
according to Kennedy (2003), it is not clear whether it is better to forecast A and Y separately to
produce the forecast, or to directly forecast P. The direct soybean production estimation was
362.9 million tons in 2030 (Table 6); is 8.4 million tons or 2.3% lower than 371.3 million tons of
the indirect estimation result (Figure 9). Both forecasts performed comparably at the country
level and each time period, thus any differences do not impede the overall results and discussion
in the paper.

Table 6. Direct Estimation Results: World Soybean Production

Country/continent Metric mil tons Share
2005-07 2010 2020 2030 2005-07 2010 2020 2030
World Total 217.6 246.1 310.4 362.9 100.0% 100.0% 100.0% 100.0%
USA 80.6 82.8 90.4 96.6 37.0% 33.7% 29.1% 26.6%
Brazil 53.9 64.1 84.2 100.7 24.8% 26.0% 27.1% 27.7%
Argentina 41.4 53.7 81.2 103.7 19.0% 21.8% 26.2% 28.6%
China 15.8 16.2 17.3 18.3 7.3% 6.6% 5.6% 5.0%
India 8.9 10.5 14.0 16.8 4.1% 4.3% 4.5% 4.6%
Paraguay 3.9 4.2 4.7 5.1 1.8% 1.7% 1.5% 1.4%
Canada 3.1 3.2 3.7 4.1 1.4% 1.3% 1.2% 1.1%
Rest of EUAS 5.8 5.8 6.4 6.8 2.7% 2.4% 2.1% 1.9%
Rest of America 2.7 4.1 7.4 10.1 1.2% 1.7% 2.4% 2.8%

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Africa 1.4 1.6 2.1 2.5 0.6% 0.7% 0.7% 0.7%

Oceania 0.0 0.0 0.0 0.0 0.0% 0.0% 0.0% 0.0%

Figure 9. Direct and Indirect Estimation Results: World Soybean Production

Note. Forecasts start from 2008.
Source: FAOSTAT and authors’ calculation.

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