The soy value chain has a major impact on the Iowa and U.S. economies, a USB study shows. (Photo: Joseph L. Murphy/Iowa Soybean Association)
Soy a powerful force in Iowa’s economy
April 30, 2020 | Bethany Baratta
The mighty soybean, known around the world for its versatility, also packs a punch to the economy. A recent study shows the soy value chain has a $15 billion impact on Iowa’s economy.
“It’s an indication of the healthy diversity we have in Iowa from crop production, processing, biodiesel and soy oil production, and livestock feeding,” said Iowa Soybean Association (ISA) CEO Kirk Leeds.
The United Soybean Board (USB) partnered with the National Oilseed Processors Association (NOPA), a trade association representing owners/operators of oilseed crush facilities, to examine the value of the American soybean industry. Economic consulting firm LMC International Ltd. was commissioned to evaluate the soybean value chain’s impact to the U.S. economy based on data from crop years 2014/15 to 2016/17.
The total economic impact on the U.S. economy from the soybean sector averaged $115.8 billion per year including $7.96 billion from crushing, according to the study.
The value chain
A look at the breakdown of Iowa’s soy value chain shows just how integrated the industry is, Leeds noted. While soybean production makes up the bulk of the economic impact at $11.5 billion, soybean delivery, grain elevators and crushing make up $2.56 billion. Feed million and selected food use account for $311 million of Iowa’s total impact. Soy oil refining and soy biodiesel production add $256 million to the value of Iowa soybeans.
The $15 billion impact matters to April Hemmes, ISA District 2 director and farmer from Hampton.
“It’s a huge number and tells you how important soybeans are to the state,” Hemmes said.
She knows that those other pieces in the soy value chain add value to the product she grows—soybeans.
“Anytime you take a soybean to a crushing facility you’re going to get the oil and the soybean meal, and that’s adding value to my product,” she said.
The soy value chain is bolstered by a strong livestock sector in the state, noted Leeds. That’s especially true in Iowa’s fourth congressional district, which spans northwest Iowa. The soy value chain in Iowa’ fourth congressional district has a $7.5 billion economic impact, the highest in the nation.
“We’re heavily livestock populated here; the whole district is,” said Jeff Frank, ISA District 4 director from Auburn, which sits in the fourth congressional district.
He says crop and livestock production go hand-in-hand in his district.
“The more livestock we have, the more soybeans we use,” he said. “It’s a circle of life.”
Maintaining soy strength
What role does the Iowa Soybean Association play in helping Iowa maintain it’s position near the top?
“We have to stay focused on raising high quality soybeans, continue to support the livestock industry, and make sure water quality and soil conservation issues are managed so that we can continue to grow crops, raise livestock and value,” Leeds said.
ISA helps to do that in a variety of ways, Leeds says.
Through policy: Making sure Iowa has a business climate that’s supportive of adding value.
“We can’t allow regulations to be placed on farmers in Iowa that aren’t based on data and outcomes,” Leeds said. “We can’t allow our state to be uncompetitive because of taxes or regulatory policies, so we must be on our guard every day and pursue policies that allow our industry to grow.”
Through ISA’s Research Center for Farming Innovation: Whether it’s research in seed, herbicides or tillage practices, collaborating with the Iowa Soybean Research Center and other partners help deliver the latest information to farmers to help them succeed.
“Farmers today need those things as much as they ever have,” he said. “I believe it gives Iowa farmers and members a competitive advantage because they have not only access to the best technology, but also access to best information on how to utilize emerging products and technology.”
Through membership: ISA is driven to deliver timely and important news to you, which includes keeping you up-to-date on all soybean-related research and news. At ISA it’s all about you, our farmers.
“We have the livestock, the beans, the oil, we have the farmers,” Leeds said. “It’s soybean heaven. At the end of the day, there’s no better place to be producing soybeans.”
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