Connecting Soy Trade to the Farm Bill

Feb 24, 2023

By Jim Sutter, CEO, U.S. Soybean Export Council

Jim Sutter, CEO, U.S. Soybean Export Council (USSEC)

U.S. soybean farmers decided years ago that international markets are important. They opened their first international office in Japan in 1956 and since then have been busy working to develop diverse markets for U.S. soy in many places.

USSEC is the primary international marketing arm of the U.S. soy family and does its work with funding from various sources. This year USSEC’s programs will touch 82 countries, and the total footprint is even larger when the work of the American Soybean Association’s World Initiative for Soy in Human Health, or WISHH, and other soy groups is added. Their work has paid off, as 60% of the U.S. soy crop has been exported in the form of soybeans, soybean meal and soybean oil and U.S. soy is the #1 ag export from the U.S.

Back to the funding topic: USSEC receives funding from the United Soybean Board, USDA’s Foreign Ag Service, Qualified State Soybean Boards (QSSBs) and from USSEC’s members. Given this is “farm bill season” and funding from FAS is a part of the farm bill, it is an opportune time to examine that funding. Recently, USDA announced FAS is awarding $202.7 million to more than 60 U.S. agricultural organizations to help expand export markets for U.S. farm and food products through the Market Access Program, also known as MAP, and the Foreign Market Development, or FMD, program.

FAS Administrator Daniel Whitley describes these programs as “unique public-private partnerships in which USDA and the American agricultural industry are working together to expand markets for high-quality, American-made farm and food products worldwide. With industry-matching funds, federal investments in these market development programs not only increase agricultural export revenue and volume, but also improve farm income and strengthen the U.S. economy.”

While the programs sound similar in scope, they have two different mandates. MAP funds support U.S. producers with marketing and promotion activities around the globe, including market research, technical assistance and support for participation in trade fairs and exhibits, while FMD programmatic funds focus on the generic promotion of U.S. commodities rather than consumer-oriented promotion of branded products. Under MAP, FAS is providing $175.6 million in initial fiscal year 2023 funding to 67 cooperators while FAS is allocating $27.1 million to 20 cooperators. The average MAP and FMD participants provide more than $2.50 in contributions for every $1 in federal funding received through the programs.

The U.S. soy industry is the #1 recipient of FMD funding and among the top 5 MAP recipients; FAS makes its allocations based on a number of factors including organizational performance, size of the overall exports for the commodity and industry contributions or funds that are invested alongside the FMD/MAP funds. In this latter category, U.S. soy has a very strong performance thanks to the robust funding received from USB, QSSBs and the industry.

The percentage of USSEC’s total funding that comes from FAS funding has declined over the last few years—despite the fact that the allocation to U.S. soy from FAS has been growing slightly each year. This result is twofold: The funding FAS has available to invest has declined because USDA has pulled more of its costs out of the total FMD/MAP funding allocation, and the allocation hasn’t grown for approximately 20 years.

Every five years when a new farm bill is completed, the amount of funding available for FMD/MAP is determined. We know ASA is working hard pushing for a significant increase in FMD and MAP funding for the 2023 Farm Bill, which we are hopeful will be completed on time. If the total FMD/MAP pie were increased, it would likely result in a larger allocation for U.S. soy, which would ensure we can continue to grow our global footprint and USSEC’s work on behalf of U.S. soy farmers.