The regional distribution of soybean production and processing capacity in the world has shifted dramatically during the last decade, says Peter Goldsmith, agribusiness management specialist at the University of Illinois.

“Since the early 1990s, the U.S. share of world soybean production has declined from about 50% to less than 40%,” Goldsmith says. “During that time, Brazil's share increased to more than 25%, and Argentina's share rose to nearly 15%. Similar changes are under way in the processing sector.”

This shift, he claims, has forced the world's largest soybean processors to remap their global strategies.

“The dominant trend in processing plant location is a shift away from mature markets, such as in the U.S.,” Goldsmith says. “In those markets, the plants tend to be older and smaller, the technology is more dated, farmer suppliers are smaller and regional production is flat. By investing in the new growth areas, companies can employ the latest technologies, improve economies of scale, and have access to a growing supply base.”

Goldsmith points out that this process is already under way in the expanding production areas of Brazil and Argentina.

“The implication is that U.S. processing assets will be increasingly focused on the domestic livestock industry and the growing market for differentiated products, such as isolates, proteins, flours, isoflavones and oils,” he says.