Missouri Soybean Economic Report State Analysis March 2014
The following soybean economic impact values were estimated by Value Ag, LLC, as part of a Missouri Soybean Merchandising Council funded project.
TABLE OF CONTENTS About the Economic Values... 1 Executive Summary... 2 Chapter 1 Inputs Sector... 4 1.1 Production Costs... 4 1.2 Soybean Acreage... 5 1.3 Input Sector Economic... 6 Chapter 2 Farm Level Sector... 8 2.1 Soybean Farms and Soybean Farm Characteristics... 8 2.2 Farm Revenue and Profit... 8 2.3 Farm Level Sector Economic... 11 Chapter 3 Storage Sector... 12 3.1 Storage Facilities and Capacity... 12 3.2 Soybean Stocks... 13 3.3 Off Farm Storage Sector Economic... 14 Chapter 4 Transportation Sector... 15 4.1 Transportation Trends... 15 4.2 Off Farm Transportation Sector Economic... 15 Chapter 5 Processing Sector... 16 5.1 Soybean Processing... 16 5.2 Economic of Processing Missouri Soybeans... 16 5.2A Economic of Processing Soybeans in Missouri... 16 Chapter 6 Biodiesel Sector... 17 6.1 Biodiesel Production... 17 6.2 Biodiesel Sector Economic... 17 Chapter 7 Exports Sector... 18 7.1 Soybean and Soy Products Exports... 18 7.2 Exports Sector Economic... 18 Methodology... 19
EXHIBITS About the Economic Values... 1 Executive Summary... 2 Chapter 1 Inputs Sector... 4 Exhibit 1.1.1 Missouri Soybean Cost of Production... 4 Exhibit 1.1.2 Missouri Soybean Production Dollars Spent, 2010 to 2012 Average, Millions... 5 Exhibit 1.2.1 Missouri Planted and Harvested Soybean Acreage, 1970 to 2012... 6 Exhibit 1.3.1 Annual Estimated Economic s of Inputs Sector... 7 Chapter 2 Farm Level Sector... 8 Exhibit 2.1.1 Missouri Soybean Farms, Acreage and Bushels Produced, 2007... 8 Exhibit 2.2.1 Missouri Soybean Production and Yield, 1970 to 2012... 9 Exhibit 2.2.2 Missouri Cash Receipts for Soybeans, Nominal Dollars, 1975 to 2012... 9 Exhibit 2.2.3 Missouri Soybean Cash Receipts in Real 1975 Dollars... 10 Exhibit 2.2.4 Missouri Leading Commodities for Cash Receipts, 2010 to 2012... 10 Exhibit 2.3.1 Annual Estimated Economic of Missouri Soybean Farmer Revenue... 11 Chapter 3 Storage Sector... 12 Exhibit 3.1.1 Locations of Missouri Grain Elevators, 2012... 12 Exhibit 3.1.2 Capacity (Bushels) of Missouri Grain Elevators, 2012... 13 Exhibit 3.2.1 Missouri Soybean Stocks on Dec. 1, 1949, to Dec. 1, 2012... 14 Exhibit 3.3.1 Annual Estimated Economic of Off Farm Storage Sector... 14 Chapter 4 Transportation Sector... 15 Exhibit 4.1.1 U.S. Soybean Modal Shares... 15 Exhibit 4.2.1 Annual Estimated Economic of Off Farm Trucking Sector... 15 Chapter 5 Processing Sector... 16 Exhibit 5.2.1 Annual Estimated Economic of Processing Missouri Soybeans... 16 Exhibit 5.2A.1 Annual Estimated Economic of Processing Soybeans in Missouri... 16 Chapter 6 Biodiesel Sector... 17 Exhibit 6.2.1 Annual Estimated Economic of Biodiesel Sector... 17 Chapter 7 Exports Sector... 18 Exhibit 7.2.1 Annual Estimated Economic of Soy Products Exports Sector... 18 Methodology... 19 M1 Industries Represented in Economic Calculations... 20
About the Economic Values The Missouri Soybean Economic Report measures the economic value generated by seven sectors in the Missouri soybean products value chain: input suppliers, soybean producers, storage facilities, truck transportation providers, processors, biodiesel refineries and exporters. Throughout the report, as many as three economic impact values will be presented for each sector. Each value has a different meaning: Output economic impact: Output multipliers measure the total dollar change in output that occurs in all U.S. industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry. Earnings economic impact: Earnings multipliers measure the total dollar change in earnings of U.S. households employed by all industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry. Value added economic impact: Value added multipliers measure the total dollar change in value added that occurs in all U.S. industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry. For some industries, only value added economic impact is reported because these industries play a supporting role in adding value to soybeans and soybean products. Page 1 of 20
Executive Summary Soybean production, processing and the industries that support these activities are significant economic contributors in Missouri. Between 2010 and 2012, Missouri farmers on average planted 5.28 million soybean acres annually and harvested 5.18 million soybean acres annually. During these three years, annual production averaged 186.22 million bushels per year, and yield averaged 36 bushels per acre. Inputs Sector Missouri soybean farmers incur significant costs to produce crops. Seed and fertilizer are the major operating costs, and opportunity cost of land and capital recovery of machinery and equipment are the two most significant allocated overhead costs that Missouri soybean farmers incur. Funding all inputs involved in Missouri soybean production generated more than an estimated $3.14 billion in total output economic impact and $1.44 million in valueadded economic impact on average per year during 2010, 2011 and 2012. Estimated Total Annual Output Estimated Total Annual Estimated Total Annual Economic Earnings Value Added $3,141,519,688 $667,905,368 $1,449,556,866 Farm Level Sector Soybeans are Missouri s leading commodity for cash receipts. Missouri soybean cash receipts totaled $2.29 billion in 2012, and they averaged $2.31 billion per year between 2010 and 2012. During 2010, 2011 and 2012, they represented on average 24.8 percent of Missouri s total farm receipts and 6.2 percent of the total U.S. soybean cash receipts. From 2010 to 2012, farmer revenue from soybean production annually boosted Missouri s economy by more than an estimated $1.7 billion in total value added economic impact and an estimated $4.23 billion in total output economic impact. Estimated Total Annual Output Estimated Total Annual Estimated Total Annual Economic Earnings Value Added $4,236,873,976 $666,495,360 $1,706,505,828 Off Farm Storage Sector The storage sector supports the Missouri soybean industry, especially in highly productive years when on farm storage isn t sufficient. Firms that store Missouri soybeans annually contributed an estimated $12.62 million in value added economic impact on average between 2010 and 2012. Off Farm Truck Transportation Sector Estimated Total Annual Value Added $12,628,144 Trucking is another industry that supports Missouri soybean production. Semi trucks fulfill a majority of soybean transportation assignments. Firms involved in transporting Missouri Page 2 of 20
soybeans by truck contributed an estimated $30.59 million in value added economic impact per year during 2010, 2011 and 2012. Estimated Total Annual Value Added $30,590,825 Processing Sector Between 2010 and 2012, annual Missouri soybean production averaged more than 186.22 million bushels. Missouri crushing facilities process a share of those soybeans that haven t been exported internationally. The remaining share is processed in neighboring states. Processing all Missouri produced soybeans that aren t exported annually contributed more than $7.01 billion in total output economic impact on average and $1.94 billion in total value added economic impact on average during 2010, 2011 and 2012. Estimated Total Annual Output Estimated Total Annual Estimated Total Annual Economic Earnings Value Added $7,014,139,406 $1,044,227,270 $1,943,232,625 An estimated 60 percent of Missouri produced soybeans crushed domestically were annually processed in Missouri during 2010, 2011 and 2012, and soybean processing activity in Missouri generates economic impact for the state. Between 2010 and 2012, processing soybeans in Missouri annually created an estimated $4.24 billion in total output economic impact, $631.93 million in earnings economic impact and $1.17 billion in valueadded economic impact. Estimated Total Annual Output Estimated Total Annual Estimated Total Annual Economic Earnings Value Added $4,244,743,877 $631,934,590 $1,175,985,293 Biodiesel Sector Missouri biodiesel refineries produce both biodiesel and glycerin. Between 2010 and 2012, Missouri refineries annually produced an estimated 120.09 million gallons of biodiesel using soybean oil. The annual value added economic impact from biodiesel and glycerin production is estimated to have averaged $328.71 million per year from 2010 to 2012. Exports Sector Estimated Total Annual Value Added $328,718,054 When exporting Missouri soybeans and soybean products, exporters add value by coordinating sales with foreign buyers. As an annual average, exporters added an estimated $9.35 million in value added economic impact per year between 2010 and 2012. Estimated Total Annual Value Added $9,353,323 Page 3 of 20
Chapter I. Input Sector 1.1 Production Costs Exhibit 1.1.1 presents soybean cost of production data. Opportunity cost of land is estimated using USDA National Agricultural Statistics Service data. The other costs are USDA Economic Research Service estimates for the Heartland Region, which includes Missouri and parts of Iowa, Illinois, Nebraska, South Dakota, Kentucky, Indiana and Ohio. Production costs include seed, fertilizer and chemicals; custom operations; fuel, lube and electricity; repairs; and interest on operating capital. Total annual operating costs averaged $129.37 per acre between 2010 and 2012. Seed, fertilizer and chemical costs are the most significant operating expenses. Allocated overhead costs incurred are for hired labor; opportunity cost of unpaid labor; capital recovery of machinery and equipment; opportunity cost of land, or the land rental rate; taxes and insurance; and general farm overhead, which includes farm supplies, marketing containers, hand tools, power equipment, maintenance and repair of farm buildings, farm utilities and general business expenses. The opportunity cost of land and capital recovery of machinery and equipment are the most significant allocated overhead costs incurred for producing soybeans. Total annual allocated overhead costs per acre averaged $220.34 between 2010 and 2012. Exhibit 1.1.1 Missouri Soybean Cost of Production Operating Costs 2010 ($ Per Acre) Page 4 of 20 2011 ($ Per Acre) 2012 ($ Per Acre) Three Year Average ($ Per Acre) Seed $57.49 $55.05 $60.81 $57.78 Fertilizer * $16.88 $22.37 $23.98 $21.08 Chemicals $16.64 $16.30 $17.10 $16.68 Custom operations $6.10 $6.22 $6.33 $6.22 Fuel, lube, and electricity $13.06 $16.65 $16.55 $15.42 Repairs $11.69 $12.12 $12.49 $12.10 Interest on operating capital $0.12 $0.06 $0.09 $0.09 Total, operating costs $121.98 $128.77 $137.35 $129.37 Allocated Overhead Costs Hired labor $1.27 $1.28 $1.34 $1.30 Opportunity cost of unpaid labor $15.84 $16.01 $16.68 $16.18 Capital recovery of machinery and equipment $73.90 $78.40 $82.58 $78.29 Opportunity cost of land, rental rate (+) $94.00 $101.00 $103.00 $99.33 Taxes and insurance $9.29 $9.96 $10.18 $9.81 General farm overhead $14.90 $15.46 $15.92 $15.43 Total, allocated overhead $209.20 $222.11 $229.70 $220.34 Total costs $331.18 $350.88 $367.05 $349.70 Sources: USDA Economic Research Service and USDA National Agricultural Statistics Service (+) * Includes commercial fertilizer, soil conditioners and manure.
Each year, spending on soybean production inputs provides a significant boost to the agriculture economy. Between 2010 and 2012, on average, Missouri soybean producers annually planted 5.3 million acres of soybeans. After considering the three year average cost of production, Exhibit 1.1.2 displays production costs incurred for Missouri soybean production. Combined, annual production expenditures were an estimated $1.85 billion. Excluding the cost of land, annual soybean production expenditures were $1.32 billion. The three industries that benefited most from soybean production in Missouri, excluding land, were capital recovery of machinery and equipment ($415 million annually on average), seed ($306.3 million annually on average) and fertilizer ($111.7 million annually on average), according to the USDA Economic Research Service and USDA National Agricultural Statistics Service. Exhibit 1.1.2 Soybean Production Dollars Spent, 2010 to 2012 Annual Average General farm Taxes and overhead, $81.8 insurance, million $52.0 million Seed, $306.3 million Opportunity cost of land (rental rate), $526.5 million Source: USDA Economic Research Service and USDA National Agricultural Statistics Service I.2 Soybean Acreage Capital recovery of machinery and equipment, $415.0 million Exhibit 1.2.1 shows trends in Missouri soybean acreage. Since 1980, Missouri soybean planted acreage has been relatively flat. Between 1980 and 2012, Missouri annually Page 5 of 20 Fertilizer, $111.7 million Chemicals, $88.4 million Opportunity cost of unpaid labor, $85.7 million Custom operations, $32.9 million Fuel, lube, and electricity, $81.7 million Repairs, $64.1 million Interest on operating capital, $0.5 million Hired labor, $6.9 million
planted 4.97 million soybean acres on average and harvested 4.87 million soybean acres on average. Between 2010 and 2012, Missouri farmers planted 5.28 million soybean acres annually on average and harvested 5.18 million soybean acres annually on average, according to the USDA National Agricultural Statistics Service. Exhibit 1.2.1 Missouri Planted and Harvested Soybean Acreage, 1980 to 2012 7,000,000 6,000,000 5,000,000 Acres 4,000,000 3,000,000 2,000,000 1,000,000 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Planted Acres Source: USDA National Agricultural Statistics Service Harvested Acres I.3 Input Sector Economic Exhibit 1.3.1 reports the annual estimated economic contribution that Missouri soybean production caused the farm input sector to create during 2010, 2011 and 2012. As illustrated, opportunity cost of land provided the largest economic contribution. Capital recovery of machinery and equipment and seed sales were the second and third largest input sector contributors, respectively. The total output economic impact made by input sectors involved in the Missouri soybean industry annually totaled an estimated $3.14 billion between 2010 and 2012. These industries added $1.44 billion in value per year, and they contributed an estimated $667.9 million in earnings realized by households employed in all industries per year. Page 6 of 20
Exhibit 1.3.1 Annual Estimated Economic s of Input Sector Subsector Total Output Total Earnings Total Value Added Seed $420,697,915 $122,806,918 $275,350,874 Fertilizer $218,620,465 $36,851,919 $68,397,788 Chemicals $151,931,114 $24,611,674 $69,017,003 Custom operations $51,317,029 $18,352,222 $27,277,925 Fuel, lube and electricity $106,867,642 $19,960,213 $41,290,699 Repairs $86,844,846 $27,312,967 $57,717,000 Interest on operating capital $642,996 $150,780 $432,925 Hired labor $10,703,659 $3,827,890 $5,689,605 Opportunity cost of unpaid labor $133,534,339 $47,755,138 $70,981,110 Capital recovery of machinery and equipment $673,097,965 $132,702,502 $285,198,342 Opportunity cost of land (rental rate) $1,076,940,213 $164,731,420 $436,493,513 Taxes and insurance $82,978,228 $23,300,663 $44,019,873 General farm overhead $127,343,277 $45,541,063 $67,690,208 Total $3,141,519,688 $667,905,368 $1,449,556,866 Page 7 of 20
Chapter II. Farm Level Sector 2.1 Soybean Farms and Soybean Farm Characteristics In 2007, 18,388 Missouri farms harvested soybeans. Exhibit 2.1.1 details the number of soybean growing farms, soybean acreage and soybean production based on farm size. Note that nearly half of Missouri soybean growing farms in 2007 had less than 100 acres. Of the six farm size classifications, the category composed of farms with 500 acres to 999 acres represents the biggest share of Missouri soybean acres. It represents the largest share of soybean bushels produced, too, according to the 2007 Census of Agriculture. Exhibit 2.1.1 Missouri Soybean Farms, Acreage and Bushels Produced, 2007 Farm Size Number of Soybean Farms % of Total Farms Number of Acres % of Total Acres Bushels Produced % of Total Bushels Produced 1 to 99 acres 8,893 48.4% 383,377 8.2% 12,848,065 7.7% 100 to 249 acres 4,101 22.3% 646,740 13.8% 22,523,116 13.6% 250 to 499 acres 2,644 14.4% 931,486 19.9% 32,907,994 19.8% 500 to 999 acres 1,831 10.0% 1,260,332 27.0% 45,272,383 27.3% 1,000 to 1,999 acres 744 4.0% 972,353 20.8% 34,791,735 21.0% 2,000 or more acres 175 1.0% 478,450 10.2% 17,604,030 10.6% Total 18,388 4,672,738 165,947,323 Source: USDA National Agricultural Statistics Service, Census of Agriculture, 2007 2.2 Farm Revenue and Profits Exhibit 2.2.1 illustrates changes in Missouri soybean production and yields from 1980 to 2012. Yields and production values tend to jump periodically as seed genetic, fertility and management innovations are introduced to Missouri soybean producers. Production and yield dropped substantially during 2012 because Missouri experienced extreme drought conditions that limited the soybean production capability. Between 2010 and 2012, Missouri soybean production averaged 186.22 million bushels per year, and yield averaged 36 bushels per acre, according to the USDA National Agricultural Statistics Service. Page 8 of 20
Exhibit 2.2.1 Missouri Soybean Production and Yield, 1980 to 2012 50 250 45 40 200 35 30 25 20 15 150 100 10 50 5 0 0 1980 1982 1984 1986 1988 1990 1992 Bushels/acre Millions of bushels 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Production Yield Source: USDA National Agricultural Statistics Service Between 2010 and 2012, soybean cash receipts annually averaged $2.31 billion, which represented 6.4 percent of total U.S. soybean receipts, based on an average of 2010, 2011 and 2012 data. Between 1980 and the mid 2000s, Missouri soybean cash receipts were relatively consistent. Since the mid 2000s Missouri soybean cash receipts have accelerated significantly, according to USDA Economic Research Service data. Exhibit 2.2.2 shows historical changes in Missouri soybean cash receipts. Exhibit 2.2.2 Missouri Cash Receipts for Soybeans, Nominal Dollars, 1980 to 2012 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 1980 1982 1984 1986 1988 1990 1992 1994 Thousand Dollars 1996 1998 2000 2002 2004 2006 2008 2010 2012 Source: USDA Economic Research Service Page 9 of 20
Exhibit 2.2.3 shows Missouri soybean cash receipts in real dollars, assuming that 1980 is the base year. In real dollars, Missouri soybean cash receipts were high during the early 1980s, but then, cash receipts in real dollars trended downward for several years. Since the mid 2000s, Missouri soybean cash receipts in real dollars have trended upward. Exhibit 2.2.3 Missouri Soybean Cash Receipts in Real 1980 Dollars $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 1980 1982 1984 1986 1988 1990 1992 1994 1996 Thousand Dollars 1998 2000 2002 2004 2006 2008 2010 2012 Source: USDA Economic Research Service and Value Ag, LLC Based on value, soybeans ranked as the leading Missouri commodity for cash receipts on average between 2010 and 2012. Soybean cash receipts represented nearly one quarter of all Missouri commodity cash receipts on average during the three year period. Corn, cattle and calves, hogs and turkeys in that order were the next most significant contributors to Missouri's total farm cash receipts based on a 2010 to 2012 annual average, according to the USDA Economic Research Service. See Exhibit 2.2.4. Exhibit 2.2.4 Missouri Leading Commodities for Cash Receipts, 2010 to 2012 Average Commodity Value of Receipts Percent of State Total Commodity Receipts Percent of U.S. Value for Commodity 1. Soybeans $2,314,220,000 24.8% 6.2% 2. Corn $1,810,725,667 19.3% 3.0% 3. Cattle and calves $1,636,048,000 17.4% 2.7% 4. Hogs $915,486,000 9.8% 4.4% 5. Turkeys $387,400,333 4.1% 7.9% Source: USDA Economic Research Service Page 10 of 20
2.3 Farm Level Sector Economic Exhibit 2.3.1 portrays annual estimated economic contribution generated by Missouri soybean farmer revenue between 2010 and 2012. Total economic output is estimated to be $4.23 billion. Farmers add an estimated $1.7 billion in value per year. This contribution led to earnings increasing by an estimated $666.49 million for all households employed by all industries each year. Exhibit 2.3.1 Annual Estimated Economic of Missouri Soybean Farmer Revenue Subsector Total Output Total Earnings Total Value Added Farm cash receipts $4,236,873,976 $666,495,360 $1,706,505,828 Page 11 of 20
Chapter 3: Storage Sector 3.1 Storage Facilities and Capacity Elevators provide storage space to farmers who do not have the ability to store grain on their farms or those who lack sufficient storage capacity on their farms. In years when production is high, producers may use off farm storage if they lack adequate on farm storage space. Missouri is home to many grain elevators and feed mills, which offer off farm storage space to Missouri crop producers. Exhibit 3.1.1 pinpoints Missouri grain elevator locations. Exhibit 3.1.1 Locations of Missouri Grain Elevators, 2012 Source: MDA Grain Dealer Database Exhibit 3.1.2 illustrates the storage capacity of grain elevators in Missouri. Significant storage is available in pockets throughout Missouri. Page 12 of 20
Exhibit 3.1.2 Capacity (Bushels) of Missouri Grain Elevators, 2012 0-50,000 50,000-500,000 500,000-2,000,000 2,000,000-14,000,000 No Data Source: MDA Grain Dealer Database * Counties without contributing data are not shaded. 3.2 Soybean Stocks In recent years, Missouri soybean stocks have been more likely to be stored on farm than off farm. Off farm facilities, however, still store a good share of total Dec. 1 soybean stocks. Exhibit 3.2.1 shows historical changes in Dec. 1 on and off farm soybean stocks. Page 13 of 20
Exhibit 3.2.1 Missouri Soybean Stocks on Dec. 1, 1980, to Dec. 1, 2012 180,000 160,000 140,000 Thousand Bushels 120,000 100,000 80,000 60,000 40,000 20,000 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 On farm stocks Source: USDA National Agricultural Statistics Service Off farm stocks 3.3 Off Farm Storage Sector Economic Storage is one sector that supports the Missouri soybean industry. Exhibit 3.3.1 presents the value added by firms that store soybeans off of the farm. Between 2010 and 2012, commercial storage annually contributed an estimated $12.62 million in value added economic impact. Exhibit 3.3.1 Annual Estimated Economic of Off Farm Storage Sector Subsector Total Value Added Commercial storage cash receipts $12,628,144 Page 14 of 20
Chapter 4: Transportation Sector 4.1 Transportation Trends To ship soybeans domestically, the supply chain tends to favor truck transportation. See Exhibit 4.1.1. Much smaller soybean volumes rely on rail and barge for domestic transportation. For exports, barge and rail are the predominant transportation systems used. For all soybeans, truck transportation is most popular. Exhibit 4.1.1 U.S. Soybean Modal Shares Exports Domestic All Soybeans Rail 2011 31% 14% 21% Five year average* 42% 12% 24% Barge 2011 49% 2% 22% Five year average* 46% 2% 20% Truck 2011 20% 84% 56% Five year average* 13% 86% 55% * Five year average computed as average from 2007 to 2011. Source: USDA Agricultural Marketing Service 4.2 Off Farm Transportation Sector Economic Trucking is another sector that supports the Missouri soybean industry. Exhibit 4.2.1 presents the estimated annual value that truck transportation added to soybeans grown in Missouri between 2010 and 2012. The annual value added amount is estimated to be $30.59 million. Exhibit 4.2.1 Annual Estimated Economic of Off Farm Trucking Sector Subsector Total Value Added Truck transportation receipts $30,590,825 Page 15 of 20
Chapter 5: Processing Sector 5.1 Soybean Processing Soybean processing involves crushing soybeans into meal, oil and hulls. According to soybean quality data from the U.S. Soybean Export Council and historical USDA Economic Research Service soybean processed value data, a typical bushel of Missouri soybeans is estimated to yield 44.41 pounds of meal, 11.4 pounds of oil and 3.49 pounds of hulls. Per pound, soybean oil is more valuable than meal or hulls. For the 2010 to 2012 marketing years, central Illinois soy product prices averaged $0.51 per pound for soybean oil, $0.20 per pound for soybean meal and $0.09 per pound for soybean hulls, according to the USDA Agricultural Marketing Service. 5.2 Economic of Processing Missouri Soybeans Missouri produced soybeans that aren t exported internationally are crushed into meal, oil and hulls. Exhibit 5.2.1 presents the economic impact that s estimated to have been generated annually by crushing all Missouri soybeans that aren t exported. Between 2010 and 2012, processing Missouri produced soybeans annually created $7.01 billion in total output economic impact and $1.94 billion in total value added economic impact. Exhibit 5.2.1 Annual Estimated Economic of Processing Missouri Soybeans Subsector Total Output Page 16 of 20 Total Earnings Total Value Added Soybean meal $4,150,802,360 $617,949,083 $1,149,959,261 Soybean oil $2,710,689,219 $403,552,801 $750,983,039 Soybean hulls $152,647,827 $22,725,386 $42,290,325 Total $7,014,139,406 $1,044,227,270 $1,943,232,625 5.2A Economic of Processing Soybeans in Missouri An estimated 60.5 percent of Missouri produced soybeans crushed domestically were processed in Missouri from 2010 to 2012. This processing annually generated an estimated $4.24 billion in output economic impact and $1.17 billion in valueadded economic impact. Exhibit 5.2A.1 Economic of Processing Soybeans in Missouri Subsector Total Output Total Earnings Total Value Added Soybean meal $2,511,939,367 $373,963,994 $695,920,376 Soybean oil $1,640,426,687 $244,217,883 $454,472,099 Soybean hulls $92,377,823 $13,752,712 $25,592,819 Total $4,244,743,877 $631,934,590 $1,175,985,293
Chapter 6: Biodiesel Sector 6.1 Biodiesel Production Between 2010 and 2012, Missouri produced an estimated 120.09 million gallons of biodiesel using soybean oil, based on Missouri Department of Agriculture data. The average assumed B100 price is $4.64 per gallon, according to The Jacobsen. Given that producing a gallon of biodiesel requires 7.7 pounds of soybean oil, Missouri biodiesel production required an estimated 924.69 million gallons of soybean oil per year between 2010 and 2012, according to the Food and Policy Research Institute at the University of Missouri. Biodiesel production also yields glycerin. Producing one gallon of biodiesel yields one pound of glycerin, according to the Missouri Soybean Association. Crude glycerin may be processed further into refined glycerin. Between 2010 and 2012, crude glycerin price averaged $0.10 per pound, and refined glycerin price averaged $0.40 per pound, according to The Jacobsen. 6.2 Biodiesel Sector Economic Exhibit 6.2.1 outlines the economic contribution that biodiesel and glycerin production makes in Missouri. Missouri biodiesel production added an estimated $312.18 million in value per year between 2010 and 2012. Glycerin production, both crude and refined glycerin, annually created an estimated $16.53 million in value added economic impact between 2010 and 2012. Exhibit 6.2.1 Annual Estimated Economic of Biodiesel Sector Subsector Total Value Added Biodiesel $312,180,221 Glycerin $16,537,833 Total $328,718,054 Page 17 of 20
Chapter 7: Exports Sector 7.1 Soybean and Soybean Product Exports According to USDA Foreign Agricultural Service data, annual Missouri soybean product exports are estimated to have averaged 9.96 million bushels of soybeans, 996.32 million pounds of soybean meal and 105.3 million pounds of soybean oil between 2010 and 2012. 7.2 Exports Sector Economic Exporting soybeans is another activity that adds value to Missouri grown soybeans. Exhibit 7.2.1 describes the annual estimated value added economic impact generated by exporting Missouri soybeans, soybean meal and soybean oil between 2010 and 2012. Exporting whole soybeans added an estimated $3.08 million in value per year. Soybean meal exporting and soybean oil exporting contributed an estimated $4.45 million and $1.81 million, respectively, in value added economic impact during each year of the three year period. All soybean exports annually contributed an estimated $9.35 million in value added economic impact on average in 2010, 2011 and 2012. Exhibit 7.2.1 Annual Estimated Economic of Soy Products Exports Sector Subsector Total Value Added Soybeans $3,083,180 Soybean meal $4,458,974 Soybean oil $1,811,169 Total $9,353,323 Page 18 of 20
Methodology Data used to compute the economic impacts originated from sources including USDA Economic Research Service, USDA National Agricultural Statistics Service, USDA Agricultural Marketing Service, University of Missouri Extension, the Missouri Soybean Association, U.S. Soybean Export Council, the Missouri Department of Agriculture, the Food and Policy Research Institute at the University of Missouri, The Jacobsen and USDA Foreign Agricultural Service. Prices used in the computations are for locations in Missouri or near Missouri. When possible, data were collected from 2010 to 2012 marketing years. Soybean marketing years start in September and end in August. 2010 to 2012 data averages were used in computations to represent the general state of the soybean industry s economic contribution. Using an average avoids a single year s data skewing the economic impact estimations. To compute economic impact values, industry output and economic multipliers were used. Economic multipliers estimate the amount of economic activity that occurs due to a $1 change in an industry s output. The economic multipliers used in this report were obtained from the U.S. Bureau of Economic Analysis and are multipliers produced by the Regional Input Output Modeling System, or RIMS II, based on a national benchmark input output table from 2002 and regional data from 2010. RIMS II generates multipliers that can be used to estimate the impact [of a] final demand change on total gross output, earnings, employment, and value added, according to the Bureau of Economic Analysis. Multipliers used for this report are benchmark, type I multipliers, which consider direct and indirect economic effects, not induced economic effects. The value added multiplier applied to the exports sector was downward adjusted to reflect that some of the value added occurs outside of Missouri. As many as three economic impacts output, earnings and value added are calculated for industries and sectors involved in Missouri soybean production. Value added multipliers are exclusively used to quantify the economic contribution made by industries that support the Missouri soybean industry: storage, transportation, biodiesel and exports. Output multipliers measure the total dollar change in output that occurs in all industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry. Earnings multipliers measure the total dollar change in earnings of households employed in all industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry. Value added multipliers measure the total dollar change in value added that occurs in all industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry, according to the Bureau of Economic Analysis. Exhibit M1 presents the industries represented in the economic impact calculations. These industries determined the multiplier values used in the economic impact computations. Page 19 of 20
Exhibit M1 Industries Represented by Economic Multipliers Seed Fertilizer Chemicals Custom operations Sector Fuel, lube and electricity Repairs Interest on operating capital Hired labor Opportunity cost of unpaid labor Capital recovery of machinery and equipment Opportunity cost of land (land rental) Taxes and insurance General farm overhead Soybean farm cash receipts Commercial storage cash receipts Semi truck shipments Soybean meal processing Soybean oil processing Soybean hulls processing Biodiesel Crude and refined glycerin Exports for whole soybeans Exports for soybean meal Exports for soybean oil Industry Classification "Wholesale trade" "Fertilizer manufacturing" "Pesticides and other ag chemical manufacturing" "Support activities for agriculture and forestry" Average of "petroleum refineries," "petroleum lubricating oil and grease manufacturing" and "electric power generation, transmission and distribution" "Commercial and industrial machinery and equipment repair and mainetenance" "Monetary authorities and depository credit intermediation" "Support activities for agriculture and forestry" "Support activities for agriculture and forestry" "Farm machinery and equipment manufacturing" "Crop and animal production" industry aggregation Average of "other government enterprises" and "insurance agencies, brokerages, related activities" "Support activities for agriculture and forestry" "Oilseed and grain farming" "Warehousing and storage" "Truck transportation" "Soybean and other oilseed processing" "Soybean and other oilseed processing" "Soybean and other oilseed processing" "Other basic organic chemical manufacturing" "All other food manufacturing" "Securities, commodity contracts, investments, related activities" "Securities, commodity contracts, investments, related activities" "Securities, commodity contracts, investments, related activities" Page 20 of 20