Summary of Report
Annual Costs of Additional Soybean Cleaning
Exceed Benefits by at Least $20 Million
AER-736, September 1996 Stock # AER-736. $9.00.
Some foreign buyers prefer cleaner U.S. soybeans, but the costs of
additional cleaning would exceed the domestic and international benefits
by at least $20 million per year, according to Costs and Benefits of Cleaning U.S. Soybeans: Overview and Implications,
AER-736, a new publication that summarizes two other ERS reports. The
reports suggest that the U.S. soybean export market can potentially
benefit more by improving the protein and oil contents of the soybeans
because most importers are unwilling to pay more for cleaner beans.
The other two reports in the series are:
According to the reports, the costs of additional cleaning to lower the
level of foreign material in soybeans would exceed the domestic and
international benefits by $20 million to $70 million per year, although a
figure near the lower end of the range is believed to be more likely.
(Foreign material includes plant parts, broken beans, weed seeds, dirt,
whole beans, pods, insects, and corn.)
- Economic Implications of Cleaning Soybeans in the United States, AER-737, which focuses on the costs and domestic benefits of cleaning benefits.
- The Role of Quality in Soybean Import Decisionmaking,
AER-722, which emphasizes importers' preferences with respect to
cleanliness and other quality factors, and assesses the benefits of
cleaning soybeans for international markets.
Concern over the quality of soybeans exported by the United
States in comparison with competitors' soybeans has increased in recent
years. Advocates of tighter cleanliness standards believe that U.S.
competitiveness in the soybean market has been reduced due to higher
foreign material levels in exported soybeans. In contrast, critics of
tighter standards argue that improving cleanliness will increase
marketing costs, reduce profits, and therefore diminish U.S.
This report was prepared in response to a request from Congress. ERS
conducted the study on the costs and benefits of cleaning soybeans in
cooperation with researchers at land-grant universities and the soybean
industry. This report is the third in a series which began with wheat
Selling cleaner soybeans seems to have limited effects in
increasing export revenues and in improving U.S. competitiveness in the
world soybean market. The possible benefits of cleaner soybeans are a
premium of $4-$5 million that foreign buyers would be willing to pay for
U.S. soybeans with less foreign material and $2 million additional net
gains in terms of potential retention of U.S. market share in a few
Asian markets where food use accounts for a large share of soybean
imports. The presence of foreign material in soybeans destined for food
use can contaminate the end-products and reduce milling yield, and is
often associated with low protein content.
For most importers, price was regarded as the most important factor in
purchasing decisions. Quality ranks second to price in import
decisionmaking, particularly among feed-use buyers, although the two
factors are closely related through the crushing margin. Soybean
processors in only a few countries indicated a willingness to pay more
for cleaner beans, although cleanliness is one of the most important
quality characteristics they look for after protein content, oil
content, and moisture.
Brazilian soybeans are perceived by foreign buyers to be lower in
price, cleaner, and of higher quality both in protein and oil contents
than U.S. soybeans. However, some buyers avoid soybeans from both Brazil
and Argentina because of a darker soyoil color and a reddish soymeal
tint. Others choose to import U.S. soybeans because of the U.S. ability
to supply soybeans year-round and the reliability of timely supply--two
desirable sourcing factors lacking in competitors' soybeans.
Marketing cleaner soybeans requires more incentives than currently exist
in the U.S. marketplace. In addition to mechanical cleaning, the amount
of foreign material can be lowered by such production and harvesting
practices as drilled planting, herbicide use, and combine adjustment.
Beyond cleanliness, U.S. policy options in regard to improving soybean
marketability include changing grades and standards, improving oil and
protein yields through plant breeding and genetic research, mandatory
testing and reporting of protein and oil contents, and launching an
information program to enhance U.S. quality competitiveness.
Top of Page
Page editor: email@example.com
Updated: September 13, 1996