The Agricultural Marketing Service (AMS) Transportation Division released a study in September, examining how improved Brazilian infrastructure and the continuing decline of U.S.  infrastructure impacts the U.S. soybean exports and global market share.

According to the study, although the U.S. is still the dominant country in the world soybean market, the U.S. market share of soybean world trade is declining.

“This study quantifies the decline that results from changes in ocean freight rates and Brazil’s infrastructure development. The results suggest that the U.S. world market share could further decline by 20 percentage points without improvements in the U.S. infrastructure from the farm to the port,” the report states. “A decline of 1 percent in the U.S. soybean market share is equivalent to $500 million lost in export sales, based on a world soybean trade volume of 100 million metric tons and today’s price of soybeans.  Market shares for the United States, Argentina, and Brazil converge and reach equilibrium over the study period, despite the variability of the ocean freight rates.”

The study states while Brazil can import production technology and increase planted area to expand exports, its capacity is limited without a transportation system that includes all major modes (truck, rail, barge and ocean vessel) utilized by the U.S.

“The multivariate sensitivity analysis results indicate that in the long run, the United States, Brazil, and Argentina market shares depend on the countries’ exporting capacity, which in turn depends on the underlying technology and infrastructure from farm to port and—in the case of the world soybean market—the competitiveness of ocean freight rates,” the study states. “It also can be concluded from the sensitivity analysis that the United States’ infrastructural improvements are critical for maintaining its competitiveness in the world soybean market. Improved U.S. infrastructure would result in an increase in market share, more competitive U.S. exports, and higher income to farmers.”

ASA plans to use the results of the study in advocacy efforts to maintain and modernize the U.S. infrastructure system. Click here to see the entire study.