History of World Soybean Production and Trade - Part 1
by William Shurtleff and Akiko Aoyagi
A Chapter from the Unpublished Manuscript, History of Soybeans and
Soyfoods, 1100 B.C. to the 1980s
©Copyright 2004 Soyfoods Center, Lafayette, California
Although soybeans have been grown on a commercial scale in East Asia for more than 1,000 years, the earliest estimates and records of soybean production are those done for Manchuria in 1900 by Sir A. Hosie (1901). The earliest figures for major Asian producers date from 1922 (Markley 1950).
Figure 2.1 shows world and regional soybean production figures from 1922-1979. The dramatic and sustained exponential growth in world soybean production is unequalled by any other crop in the world. Although it took several thousand years for the world to pass the production level of 1,000 million bushels (27,216,000 metric tons) a year in 1961, it took only 12 more years to pass the level of 2,000 million bushels in 1973, and only six years to pass the level of 3,000 million bushels. Stated differently, the last doubling in annual world soybean production took only seven years, from 1972-1979. In the most recent 30 year period from 1949-1979, world production increased by 700%, for an average increase of 23.3% a year.
These soybeans represent a huge source of high-quality, low-cost protein. The 96.3 million tonnes (metric tons) of soybeans produced worldwide in 1979 is enough for 23.0 kg (50.5 pounds) for each of the world's 4,200 million people. Since 36% of each unit weight of soybeans is protein, this is enough for 8,280 grams of soy protein for each person. Given the FAO average daily protein requirement of 65 grams per person per day, this amount of soy protein (if none were lost in cooking or processing) could meet 34.9% of the protein needs of every person on the planet. Due to protein complementarity, an even greater percentage would be supplied if the soy protein were served together with grains, as it invariably is.
OVERVIEW OF WORLD SOYBEAN PRODUCTION AND TRADE
The history of world soybean production and trade can be divided into six major phases:
1. All production and Trade in East Asia (from ancient times to 1907) . Since ancient times, China had been the world's foremost soybean producing country. In the earliest period for which we have records (1909-1913), China proper (not including Manchuria) produced an estimated 71.5% of the world's soybeans, much more than all other countries combined. Other major producers were Manchuria (16.5%), Japan (5.9%), Korea (5.5%), and Indonesia (Dutch East Indies, less than 1%), as shown in Figure 2.2. For centuries Manchuria and north China had shipped soybeans by boat to southern Chinese ports and by the late 1800s exports from Manchuria to Japan increased rapidly, especially after China made special trade concessions at the end of the Sino-Japanese War in 1895.
2. Expansion of Soybean Exports from Manchuria to the West (1908-1930) . In 1908 the first shipman of soybeans to the West was made by Japanese firms from Manchuria to England. During the next two decades exports of soybeans and soy oil from Manchuria to Europe increased rapidly (Fig. 2.3), stimulating a rapid expansion of soybean production in Manchuria from 1 million tonnes in 1908 to 5.4 million tonnes in 1930 (Fig. 24), and increasing Manchuria's share of the world market during this period from 16.5% to 42.5% (Fig. 2.2). Soybean production in China proper during this period stayed about constant at 5.4 million tonnes?? per year.
3. Rise of Soybean Production in the United States and Decline of Exports from Manchuria to Europe (1931-1941) . Starting in the early 1930s, America began to emerge as a major soybean producer, passing Japan in 1931, Korea in 1934, and almost overtaking Manchuria in 1941 (Fig. 2.4). During this same period, soybean exports from Manchuria to Europe began a steady decline, largely due to dissatisfaction by European soybean processors with the quality of Manchurian soybeans, oil, and presscake. The advent of World War II in 1940 disrupted soybean trade between Manchuria and Europe, reducing it to virtually zero by 1941; it was never resumed after the war. Because of the rise in US production and the fall in trade with Europe, Manchuria's soybean production by 1940 had fallen to less than 60% of its 1930 peak, and Manchuria's share of world production had fallen from its peak of 42.5% to 25.5%.
4. Domination of the US as the World's Leading Producer (from 1942) . Spurred since 1940 by a wartime need for domestic sources of fats, oils, and meal, the United States doubled its soybean production between 1941 and 1942, passing both Manchuria and China in one year to become the world's leading soybean producing country, a lead which has been maintained ever since, except for 1947 when China took it back for one year. In the brief period from 1930-1942, America's share of world production had skyrocketed from 3% to 46.5% (Fig. 2.2). Manchuria's and China's share of world production continued their steady decline since 1930; in 1954 the production statistics of the two countries were merged (Fig. 2.2).
5. Leadership of the West Over Asia in Production and Rise of the US as a Major Exporter (from 1956) . Prior to 1956, the majority of the world's soybeans had been produced in Asia (Fig. 2.1). However in that year the center of world soybean production shifted to the western hemisphere as the United States passed Asia in total production. At about the same time, the US emerged as the world's leading exporter of soybeans, soy oil, and soybean meal. (Note that Asia's total production remained at basically the same level from 1922-1979).
6. The Rise of Latin America (from 1970) . Starting in the early 1970s, Latin America, led by Brazil, began to emerge as a major soybean producing area. In 1974 Brazil's production passed that of China and in 1975 Latin America's total production, the major producers being Brazil and Argentina, passed that of Asia. Latin America also emerged as a major soybean exporter. The rise of production in Latin America caused America's share of world production to peak at 76.1% in 1969, falling to a low of 57.5% in 1976. In 1979 Brazil produced 14% of the world's soybeans and Argentina 4.2% (Fig. 2.2).
In the following sections we will look more closely at the historical development of soybean production and trade in various regions. A discussion of soybean oil and meal manufacture and trade will be found in Chapter 26.
HISTORY OF SOYBEAN PRODUCTION AND TRADE IN EUROPE
China . Since Manchuria did not become a part of China until 1954, we will discuss its soybean production in the next section. Although soybeans have long been grown throughout China, the largest production is found in the eastern part of North China, especially in the provinces of Shantung, Hopeh, Shansi, Honan, Anhwei, and Kiangsu (Horvath 1930, Hymowitz 1970). A description of traditional methods of harvesting and threshing is given in Chapter 9. Levels of production are shown in Figure 2.4. Much of the drop in production from 1936-1944 was due to extensive fighting over large areas of the country, but by 1948 production had recovered. The combined total of 7.5 million tons (tonnes??) for China and Manchuria in 1950 had risen to 14.5 million tonnes by 1979, an increase of 193% in 29 years, or an average growth of 6.6% a year.
Since ancient times, virtually all of China's soybeans have been used in China. In the 1950s it was estimated that 55% of the crop was used for foods as described in the following chapters; this is a major source of protein in the Chinese diet.
Manchuria . Although Manchuria has been a major center of soybean production since the early 1900s, its production has never surpassed that of China proper, even though it almost equalled China's production for one year, in 1930. Manchuria's role as a major soybean producer, exporter, and processor can only be understood in the larger context of its tumultuous history as a country.
Manchuria is the name given by Westerners to what are now the three northeastern provinces of China: Heilungkiang in the north, Kirin (Chi-lin) in the center, and Liaoning (until 1928 Feng-t'ien) in the south. Historic homes of Manchus, rulers of China from 1644-1912, Manchuria has long been viewed by the Chinese as a vast territory outside the Great Wall, populated by nomadic barbarians, Tungus in the north, Mongols in the West, and Manchus in the southeast. Manchuria did not truly become part of China until the 1950s. Repeat??
Manchuria with its vast fertile lowland plain, major rivers (the Sungari and the Liao), good climate, and plentiful rainfall, is the best agricultural land in China. It is excellent for growing soybeans. The total area is as large as that of France and Spain combined.
At the beginning of the 17th century, the militarily astute Manchus took advantage of the chaos of the tottering Ming dynasty and invaded China, virtually emptying Manchuria of its population (Tsao 1930). The Manchus established the Ch'ing dynasty, which ruled for 268 years until 1912.
Starting in the 1840s foreign encroachment on China began and a number of treaty ports were opened to foreign ships. When the Imperial Maritime Customs was established at Newchwang, Manchuria, in 1864, to open up the rich resources of the vast Manchurian hinterland, it was found that trade in soybeans was already flourishing on the local market. In 1867 it was recorded that exports from Manchuria mostly to south China included 61,200 tonnes ?? of soybeans, 71,100 tons (tonnes) of bean cake (left over after pressing out the oil), and 3.07 million pounds of soy oil. At this time the chief soybean producing area was the rich Sungari valley. Prior to 1868 all of the soy oil was extracted by traditional hand-driven implements. In that year the first mill came into being. By 1875 the industry and trade were booming; soybean exports had increased to 109,000 tonnes. Most of the exports were carried down the coast to southern China by junks. At the ports of Swatow, Amoy, and Canton oil mills extracted the oil and the press cake was used to fertilize sugar plantations (Tsao 1930).
In the closing decades of the 19th century, Russia and Japan began to eye Manchuria as a fruitful field for imperialist expansion. Japan, with its overflowing population and limited resources, saw Manchuria as an abundant source of basic foods. The Sino-Japanese War of 1894-1895 started when Japan invaded southern Manchuria. The treaty that ended the war ceded to Japan the crucial Liaotung Peninsula in southern Manchuria and the Chinese island province of Taiwan. After this war and special Chinese trade concessions to Japan, Manchurian agriculture flourished and Japan became the principal market for Manchurian soybean exports. In 1901 Alexander Hosie, who was in charge of the British Consulate at Newchwang from 1894-97 and 1899-1901, wrote a book titled Manchuria , containing some of the earliest information on the country's soybean production and trade. He calculated that in 1899 Manchuria produced over 600,000 tons of soybeans, and that soybeans and soybean products were Manchuria's chief export; in 1898 the country exported 232,000 tons of soybeans, 220,000 tons of bean cake, and 12 million pounds of soy oil for food and light. The main buyer of these exports was Japan, whose purchases exceeded the total of south China. Other main buyers in descending order of importance were Shanghai, Swatow, Canton, and Amoy.
In the early 1900s Russia seized back the Liaotung Peninsula and by 1904 had finished building a number of major railroads. Japan struck back and in the Russo-Japanese War which followed Japan was again victorious; the treaty of Portsmouth gave Japan control of the Peninsula and the area's two major railways, the Russian-built Chinese Eastern Railway running from Siberia through Harbin to the port of Vladivostok, and the South Manchurian Railway, running perpendicular to it down to Dairen and Port Arthur on the Peninsula. The treaty also acknowledged Japan's paramount interests in Korea. The Japanese ruled their Korean and Taiwanese colonies with an iron hand, and worked to expand their soybean production.
Before the South Manchurian Railway was built, Newchwang was the principal port for export of soybeans, cake, and oil; Antung ranked second. After 1905, Dairen, located near the southern end of the railway, rose rapidly to first place both as the center for both soybean processing and exporting (Markley 1950).
The close of the Russo-Japanese War in 1905 gave a fresh impetus to trade and, in large measure, was responsible for the first exports of soybean to Europe. During the war soybean production had expanded rapidly to meet the food requirements of both armies stationed there. When the troops were withdrawn, the large surplus of soybeans that resulted demanded as new export market. Postwar Japan, which had previously imported large quantities, now found itself economically impotent. Yet Japanese trading firms, with their new lease on the South Manchurian Railway and their newly developed port of Dairen at the southern end of the railway, saw a means to turn this surplus to their advantage. Hence in 1908 the Japanese trading company Mitsui made the first ?? trial shipment of soybeans to the Western world, sending them to several oil mills in England.
The success of the venture was beyond all expectation. The suitability of the soybean for oil and oil cake was quickly recognized; another consignment of 5,200 tons followed early in 1909. Eventually that year over 400,000 tons of good quality soybeans were shipped to England; oil mills there were set in full operation. The soybean was favored on the European market by the shortage of flax and cotton crops in the US and of linseed in Argentina. The export trade grew rapidly, soon extending to other European countries and in 1910 to America. As trade grew, so did Manchurian soybean production.
The rapid economic development of Manchuria set in motion a mass migration of immigrants from northern China, and especially from Hopeh and Shantung, the most densely populated provinces of that area. The immigration of agricultural workers started in the 1890s when the Manchu government began to encourage Chinese immigration. It expanded with the Japanese economic development after 1905 and the spread of the railroad systems, and quickly grew to immense proportions, reaching a peak in 1927 of 843,000 net immigrants per year. Some went to flee the civil wars of the 1920s that destroyed their farmland, some to escape the overcrowding and tensions of north China. The lure of vast expanses of rich farmland in a thriving country of great opportunities was irresistible. Largely through immigration, the population of Manchuria tripled from about 11 million in 1900 to 34 million in 1930, and was 95% Chinese (Fairbank et al. 1973). It was primarily Chinese immigrants who farmed the rapidly increasing soybean acreage of Manchuria. Following a brief lull during World War I, soybean production and exports expanded steadily until 1930 (Figs. 2.3 and 2.4). Exports of bean cake and soy oil, however began to decline during this period as an efficient soybean processing industry developed in Europe (see Chapter 26). Even China began to ship large quantities of soybeans in excess of those needed for food to Manchurian ports for re-export to foreign countries. In 1929 the Soviet port of Vladivostok was closed to Manchurian exports; thereafter the port of Dairen expanded rapidly. Most of the exports were done by foreign firms, two Dutch and one Japanese.
In 1930 the Soviet researcher A. Setnitsky estimated that the distribution of land under soybean cultivation worldwide was China proper 6.7 million hectares (50.3% of the world total), north Manchuria 2.9 million (21.8%), south Manchuria 1.8 million (13.5%), Japan, Korea, and Formosa (Taiwan) 1.2 million (9.0%), USA 549,000 (4.1%), and Dutch East Indies 189,000 (1.4%).
In 1930 Tsao Lien-en did a brilliant review of the history of soybean production and trade in Manchuria, then predicted its impending downfall because of a complex series of high levies in Manchuria, unfair trade dealings by merchants, an outdated and inefficient oil milling industry, poor quality export products, the rapid modernization of the soybean oil milling industry in Europe, and the duties levied against imported soybean oil and cake (but not against soybeans) in Europe and America. Manchuria, he said, would lose its domination of the world soybean market just as China had formerly lost its domination of the tea and silk trades. He was right, and the consequences on Manchuria were severe for soybeans had become the economic life of Manchuria. In 1928 soybeans accounted for 30.8% of all crops produced in the country--the other main crops being kaoliang (a grain sorghum) and wheat--and 72.7% of the exports. More than half of the population either cultivated soybeans, manufactured soy oil, or otherwise depended on soybeans for their livelihood. Customs levies from exports of soy products brought the country huge revenues. The cities of Dairen, Harbin, and Newchwang were dominated by soybean oil mills. Although China produced more total soybeans than Manchuria, the percentage of land planted to soybeans in Manchuria was about three times as large as in China (13.1 vs 4.4 hectares/sq. mile) and the per capita soybean production in Manchuria was 2.7 times as large (47.4 kg vs. 17.8 kg. per person).
In the late 1920s the Japanese expansionists began to desire greater control of Manchuria as the key to the new empire for which they longed. In September 1931 officers of the militaristic Japanese Kwantung Army staged the "Mukden Incident" and Japan proceeded to overrun all of Manchuria. In February 1932 the Japanese puppet state of Manchuko was established. The Japanese were ecstatic over the easy conquest of a country larger than Japan itself, with a population of 30 million hard-working Chinese. Yet from this time on, soybean production and exports began a steady decline, despite persistence of the efficient Japanese to increase them (Fig. 2.4).
In 1937 the expansionist Japanese army swept down through China from its base in Manchuria, capturing Shanghai, then Nanking in December 1937, and finally Canton in the far south in the autumn of 1938. This warfare further damaged soybean production and trade. But the final blow came in 1940, when World War II completely cut off trade between Manchuria and Japan. This trade was never again revived and Manchuria was never again heard of as a major soybean producer or exporter; her place was largely taken over by the United States after 1942. In 1945, with her defeat in World War II, Japan lost her colonies in Manchuria, Taiwan, and Korea. Between 1947 and 1954 Manchuria was gradually incorporated in the People's Republic of China. Soybean production of the whole country stayed roughly constant from that time until 1980.
Other Asia . The only other soybean producers in East Asia from 1910-1940 were Korea, Japan, and the Dutch East Indies (Indonesia) (Fig. 2.4). Formosa also produced a small amount (Markley 1950). In 1979, the leading soybean producers in East Asia were China 10,500,000 tonnes, Indonesia 570,000 tonnes, South Korea 335,000 tonnes, North Korea 330,000 tonnes, India 250,000 tonnes, and Japan 192,000 tonnes. India's production increased dramatically from only 35,000 tonnes in 1974 to 250,000 tonnes in 1979, a sevenfold increase in five years. For more early history of these other Asian countries, see Markley 1950, pp. 75-78. For recent history of production in Indonesia, see Shurtleff and Aoyagi 1979.
HISTORY OF SOYBEAN PRODUCTION AND TRADE IN THE UNITED STATES
The most remarkable success story in the agricultural history of the United States, if not of the world, the soybean has risen, metaphorically, from rags to riches in the space of one lifetime. In the 1920s it was a little-known American forage crop, which many farmers believed would never amount to much as a cash crop or food crop. In 1942 America passed both China and Manchuria to become the world's leading soybean producing nation, and by 1969 was producing over 76% of the world's soybeans. By 1973 soybeans had become America's number one cash crop, and leading export commodity, ahead of both wheat and corn.
How was this miracle achieved? First, the United States is blessed with vast, flat areas of land in the Mississippi Valley and eastern and southeastern parts of the country that are well adapted by climate, soil, and topography for soybean production. The combination of predominant summer rains and warm to hot summers is particularly propitious, allowing most of the crop to be grown without irrigation. Moreover, a continually changing set of circumstances in America, which will be examined chronologically in this section, has repeatedly helped to expand soybean production. But there was another element, just as important or even more so, as Robert W. Howell, (1976) head of the Department of Agronomy at the University of Illinois, so aptly states. "First a few and then many more men and women of vision, imagination, energy, and dedication--remarkable people and institutions who saw the potential of the soybean and worked hard to make that potential a reality."
1804-1910 . The first thing that must be understood about the soybean crop in America is what a very recent phenomenon it is. Soybeans have been cultivated in China for at least the past 3,000 years, as compared with only about 180 years in the United States. Secondly, it is important to note that it took roughly 100 years (from the date of first mention in 1804) before American farmers and the USDA came to recognize the crop's great potential. Thus it must be remembered that the soybean producing industry, which rose to prominence so spectacularly starting in the mid-1930s, did not develop overnight (Obvious??). Until about 1880 the soybean was regarded chiefly as a curious plant from the Orient; from that time it first came to be looked upon as having agricultural possibilities (Morse 1926). By 1890 a small number of farmers had started to plant soybeans. In 1899 W.C. Blasedale, writing in a USDA bulletin, was able to state that "the soybean is coming to be quite extensively grown in the United States, largely for use as a forage plant." By about 1900 soybeans were beginning to attract more attention as a commercial crop because of the efforts of numerous state agricultural experiment stations, the USDA (which began to distribute seeds to farmers for experimental purposes), and a growing number of far-sighted and often evangelical farmers.
The early appeal of the soybean to farmers was threefold: it allowed them to grow a high-protein livestock feed on their farms; it worked nicely in crop rotations as a legume, enriching the soil with nitrogen; and it grew well on acid soils and during droughts. There was thought in the early 1900s in America of using the soybean as a source of oil or of human food. Rather, its three primary uses, listed here in decreasing order of importance, were (1) as a forage or pasturage crop; hogs or sheep were generally turned into the fields when the plants were almost mature but still green to graze on the beans and leaves; (2) as a cover crop which, in addition to fixing nitrogen in the soil, was often plowed under as "green manure" after reaching maturity; and (3) as hay or silage, the whole plant being harvested and either dried for hay or fermented (usually with corn) as silage, then fed as winter rations to livestock or poultry.
The first states to grow soybeans on a fairly large scale in America were not today's big producers from the Corn Belt, such as Illinois and Iowa, but those with mild climates in the southeast or south. Virginia was the earliest large producers and seems to have been the leader until about 1900, when North Carolina took over first place. In 1907 the soybean was still considered a minor crop, with less than 50,000 acres under cultivation for all purposes; North Carolina produced more than 90% of all the harvested seed, but still less than 50,000 bushels. At this time it seemed unlikely to all except a few soybean enthusiasts (they were called "soybean cranks") that the soybean would ever become more than a minor or emergency crop (Morse 1927). Not more than six varieties of soybeans were being grown.
1910-1919 . During this period the boll weevil made cotton growing unprofitable in some parts of the South, causing the acreage of soybeans and peanuts to increase rapidly from 1916. Starting in 1918 the Monthly Crop Reporter and various state departments of agriculture ?? began to record soybean acreage, production, and yield for leading states. In 1919 the USDA decided that there were sufficient acres of soybeans harvested for beans (99,000 acres nationwide) to justify starting to record the figures. Between 1907 and 1930 the acreage of soybeans grown for all purposes and the acreage harvested for beans as well as the total amount of soybeans harvested all increased very rapidly (Fig. 2.5 ??). Note that the total acreage harvested for beans is only about 20% of the total acreage grown for all purposes, and that the yield from 1919 to 1930 increased from about 10-13 bushels per acre (674-876 kg/ha). In 1919 the five leading states in soybean acreage were all in the South: North Carolina, Virginia, Mississippi, Kentucky, and Alabama. North Carolina led in the harvest of soybean for seeds with about 500,000 bushels, followed by Virginia with about 100,000 bushels.
World War I led to huge increases in soybeans and soybean products from Manchuria. Soybean imports rose from 64,000 bushels in 1915 to a peak of 89,000 in 1917, dropping off to an average of 65,000 bushels a year in the late 1920s. By far the biggest increase was in imports of soy oil, which leaped from 10,000 tonnes in 1915 to a peak of 152,000 tonnes in 1918, then back to 7,000 tonnes by 1921. In 1918 imports of soybeans, oil, and meal rose to the equivalent of 186% of total US domestic soybean production, an all-time high (Fig. 2.X).
1920-1929 . During the 1920s the soybean advanced from a substitute crop to one of major importance (Morse 1926). The decade started with the propitious founding of the American Soybean Association (ASA), whose history is described in detail in Chapter 39. By holding annual meetings and serving as a vehicle for communication within the growing industry, the ASA played a key role in stimulating interest in and production of soybeans. Other pioneers began to appear. The first American to fully realize the great potential of the soybean in the US was Charles V. Piper of the USDA. He prophesied its great future with uncanny accuracy. His co-worker William J. Morse deserves more credit than any other single person for the remarkable success of soybeans in America. The full story of Piper and Morse is told in Chapter 38. The work of other early soybean pioneers such as Burlison, Hackleman, Beeson, and many more is told in Chapter 37.
The expansion of soybean acreage during the 1920s and thereafter resulted from the combined effort of many groups of people including plant collectors and breeders, agronomists, farmers, farm machinery makers, research chemists, soybean processors, and marketing and utilization specialists. A number of specific factors aided the growth. (1) Nearly 3,000 new, high-yielding soybean varieties had been introduced from East Asia by the USDA since 1898 and adapted by plant breeders to American soil and climatic conditions (see Chapter 1); (2) the combine had been specially adapted to harvesting soybeans, which reduced harvesting costs by two-thirds; (3) the use of commercial soybean inocula had increased yields. In 1886 a professor Hellriegel had discovered the importance of inoculation. In the early 1900s the USDA had issued a number of publications on soybean inoculation and ny the 1920s numerous companies were manufacturing commercial inoculants; (4) The tariff act of 1922 levied an import duty of 30 cents a bushel on soybeans and 2.5 cents a pound on soy oil. The tariff act of 1930 increased the duty on soybeans to $1.20 a bushel and on soy oil to 3.5 cents a pound. Imports declined; (5) Research discovered new ways of using soy protein and oil in industrial products. For example, in 1923 I.F. Laucks Inc. in Seattle, Washington began producing a waterproof soybean glue, which by 1926 was widely adopted by the plywood industry in the Pacific Northwest; and (6) the soybean processing industry started producing soybean oil and meal in the mid-1920s (see Chapter 26). To ensure a sufficient and reliable supply of soybeans, some of the processors, starting in 1928, contracted with farmers to grow a specified acreage of soybeans to be sold at an agreed-upon price. Shortly a Soybean Marketing Association?? representing the processors was formed. This marketing system gave farmers the confidence to plant the new crop and expand acreage. Only by the mid-1930s did the highly-competitive, price-sensitive marketplace as we know it today develop.
1930-1939 . The 1930s were a decade of vigorous growth for the American soybean industry. Between 1929 and 1939 soybean production increased by a remarkable 970%, or almost 10-fold, largely after 1935 due to the rapid growth of the soybean processing industry (making oil and meal). yet in 1939 America still produced less than 3% of the world's soybeans (Fig. 2.1).
During the early 1920s, there was a sudden and dramatic shift among the leading soybean producing states. In 1920, according to the December issue of the Monthly Crop Reporter , the top five producers had been North Carolina (1,638,000 bu), Virginia (570,000 bu), Alabama (228,000 bu), Missouri (133,000 bu), and Kentucky (120,000 bu); most were southern states. During the 1930s, each of these states but Missouri plummeted in relative importance (Fig. 2.6), as soybean acreage and production expanded rapidly into the Corn Belt. In 1924, Illinois passed North Carolina to become the leading producer, a rank she held until 1980. In 1924 the top five producers were Illinois (1,380,000 bu; 26.5% of total), North Carolina (1,160,000 bu; 22.3%), Missouri (656,000 bu; 12.6%), Indiana (653,000 bu; 12.6%), and Ohio (195,000 bu; 3.8%) (Stewart et al. 1932). In 1929 Indiana snatched the second place spot from North Carolina, only to be passed in turn by Iowa in the late 1930s.
Even more dramatic was the sudden increase in concentration of soybean production in the five Corn Belt States (Illinois, Iowa, Indiana, Ohio, and Missouri) of the north central region. In 1919 the Corn Belt States had produced only 8% of America's soybeans. The percentage jumped to 58% in 1924, 79% in 1930, then to a peak of 88.5% in 1940; thereafter it gradually decreased to 58.5% in 1980, reflecting in part the rapid increase in production in the latecomer state of Minnesota. Also in 1940 the Corn Belt reached a peak of 85% of total US soybean acreage (64% of equivalent solid acreage).
Although the Corn Belt states are located on about the same latitude as Manchuria (37-43°N latitude), Piper and Morse (1923) had considered that soybeans were well adapted only to the southern part of the Corn Belt. Illinois soon became known as the heart of the Soy Belt, with Decatur becoming the center of soybean processing. A number of factors prompted the rapid rise in soybean production in the Corn Belt during the 1920s and 1930s: the favorable soil and climatic conditions; the high yields and oil content of the soybeans; the strong growth in demand for soybeans from local processors and livestock markets; the decline in the number of horses on farms which caused a decline in acreage of oats that was replaced by soybeans; USDA crop restriction and soil improvement programs that started in 1933 and tended to restrict corn acreage, which was partially replaced by soybeans; the realization by farmers after the droughts of 1934 and 1936 that soybeans endured droughts better than corn (Goldberg 1952; Burtis 1950).
From the 1800s until the end of the 1930s soybeans were grown in America primarily for use as a forage and pasture crop rather than to harvest the seeds. From 1924-1934, an average of only 25% of the total soybean acreage was harvested for beans (Fig. 2.X). The major users of these beans were seed companies or farmers who sold or used them to plant next year's crop, and farmers who fed them to livestock. After 1935 the soybean processing industry (making oil and meal) became the dominant user. In 1929-30 for example, 56% of the total US soybean acreage was cut for hay (when the seeds were about half grown, the plants were cut with the leaves and pods on, with no intention of separating the beans for seed), 29% was harvested for beans, and 15% was grazed or plowed under as "green manure." The Agricultural Adjustment Administration's soil-building program of the early 1930s had encouraged the use of soybeans as a green manure crop. Starting in about 1925, however, the proportion of acreage harvested for soybeans steadily increased due to increased demand for soybeans to crush for oil and meal, improved soybean varieties with higher yields and oil content, and better harvesting equipment. Yet it was not until 1941 that acreage harvested for soybeans (5.9 million) first exceeded the acreage grown for all purposes (5.5 million) nationwide; in the Corn Belt, the switchover had come six years earlier, in 1935. By 1945 more than 75% of the total acreage was harvested for seed, by 1959 more than 95%, and after 1965 virtually 100% (Fig. 2.X).
Also after the mid-1960s most soybeans were grown alone, as a monoculture crop. Yet prior to 1910, especially in the southern states, the majority of all soybeans were interplanted, with rows of soybeans alternating with rows of some other crop (Stewart et al. 1932). From 1920-1940 roughly 20% of all US soybean acreage was interplanted. The figure had dropped to 11% by 1945, to 9% by 1950, and to almost zero by the 1960s. Soybeans were never widely interplanted in the Corn Belt (Goldberg 1952).
It was mentioned above that the growth of the US soybean processing industry, which produced soy oil and defatted soybean meal, was a major cause of the increase in soybean acreage and in the percentage of the crop harvested for beans. The takeoff of this industry, which started in 1935, and its subsequent growth are detailed in Chapter 26. The processing was initially done primarily to produce oil; the weak demand for the meal was the limiting factor for the growth of the industry (Horvath 1933). However by the mid 1930s, due in large part to the research of J.W. Hayward of the University of Wisconsin, soybean meal became an accepted part of livestock and poultry feeds. This greatly stimulated soybean production, as did the first major exports of US soybeans, with 2 million bushels from the 1931 crop going to Europe.
Standards for grading and marketing soybeans had been established by the USDA as early as 1925; they are presently classified as cereal grains and their trading is regulated by the US Grain Standards Act. Starting in 1936 soybeans came to be traded as a sideline at the Corn Pit on the Chicago Board of Trade, but by October 1937 enough soybeans were being traded in commercial markets to justify the inauguration of trading in soybean futures contracts by the Chicago Board. In December 1939 a special Soybean Pit was installed by the Chicago Board ( Soybean Digest , Nov. 1940). These developments signalled the end of the soybean contract marketing system (in which many soybean crushers or seed companies contracted with individual farmers to buy their beans at a predetermined price) and the start of a free competitive marketplace (with national prices reflecting those atthe Chicago Board). Country elevators and grain marketing firms began to compete aggressively for the crop, then sold the beans to processors.
The 1930s saw a widespread growth of interest in using the soybean's oil and protein to manufacture a remarkable array of industrial products ranging from paints and soaps to plastics and glues. In 1936 the United States Regional Soybean Industrial Products Laboratory was established at Urbana, Illinois, to do research and development on such products. These developments (described in Chapters 36 and 37??) received widespread publicity (one of the foremost publicists was Henry Ford); this stimulated popular and agricultural interest in the crop, which in turn stimulated expansion of acreage.
During the 1930s the US made the important transition from a net importer of soybeans and soybean products to a net exporter (Fig. 2.X). The first year of net exports was 1931 when, because of a surplus at home and unsettled conditions in East Asia, more than 4 million bushels (108,000 tonnes) of soybeans were exported to European oil mills, mainly those in Germany. In 1932, the US was exporting the equivalent of 17.5% of its domestic crop, a record high that would not be attained again until 1954.