The Soybean Squeeze: How Global Trade, Brazil’s Rise & Biofuel Paralysis Are Stress-Testing U.S. Agriculture

The U.S. soybean industry is facing what may be its most intense period of stress in decades. Markets are in flux, policy is in limbo, and competitors are gaining ground.

In a recent episode of The Germinate Podcast, I sat down with Grant Kimberley, Senior Director of Market Development at the Iowa Soybean Association, to dissect what’s really happening in the soybean economy—and what’s at stake for America’s farmers, agribusinesses, and food systems.

A Crisis Years in the Making

While the current situation might feel sudden, Grant says this downturn has deep roots:

• Trade War Fallout: The 2018–2019 trade war between the U.S. and China triggered retaliatory tariffs—particularly on agriculture. As a result, China shifted its buying power to Brazil, investing heavily in its infrastructure and supply chain.

• COVID Whiplash: The pandemic sent commodity prices soaring, creating a short-lived boom. But that demand crashed almost as quickly, creating volatility that’s still rippling through the system.

• Rising Global Supply: Brazil now produces more soybeans than the U.S., with projections around 170 million metric tons. Meanwhile, U.S. exports to China—once our largest customer—have dropped to zero in 2025.

“We’re damn close to a crisis,” I said during our conversation—and Grant agreed.

What’s Driving the Pain?

Here’s what’s weighing heavily on U.S. soybean farmers:

1. Input Costs Are Sky-High

Fertilizer, equipment, and chemical prices haven’t come down, even as commodity prices have. That margin squeeze is choking profitability.

2. China’s Absence Hurts

China buys 60% of the world's soybean imports. This year, they’ve purchased none from the U.S. That vacuum is tanking basis prices—especially in export-reliant regions like the Dakotas.

3. Biofuel Policy Is in Limbo

The U.S. government hasn’t finalized Renewable Fuel Standard (RFS) volume obligations, and key biodiesel tax credits remain unclear. That’s straining biodiesel plants and limiting domestic demand for soybean oil.

4. Global Competition is Fierce

Brazil’s low production costs, tropical climate, and weak currency make them ultra-competitive. And they’re not slowing down—they’re expanding acreage year after year.

How We Get Out: The 3 (Now 4) Pillars of Recovery

Kimberley laid out a clear, urgent roadmap for how the U.S. ag sector can recover.

Pillar 1: Reset Trade with China

A potential meeting between U.S. and Chinese leaders could restart diplomatic relations and open the door to renewed soybean purchases.

“If they’re going to meet, that usually means the big stuff is already worked out behind the scenes,” says Kimberley.

Without China, the math simply doesn’t work.

Pillar 2: Finalize Biofuel Policy

EPA needs to set enforceable volume targets under the Renewable Fuel Standard, and fast. The lack of certainty is suffocating demand for soybean oil as a fuel source—and threatening the survival of small-town biodiesel plants.

“This is a simple fix that could jolt demand quickly,” Kimberley emphasized.

Pillar 3: Short-Term Financial Assistance

No farmer wants a handout. But the reality is grim: without temporary relief, we’re looking at a surge in bankruptcies and mass job losses in rural America.

As Grant put it:

“If you’re bleeding out, you can’t think about the future—you need a transfusion now.”

Pillar 4: Tackle the Cost Side

Farmers are being crushed by stubbornly high input costs. Solutions could include:

• Tariff relief on ag inputs like fertilizer and steel

• Addressing corporate consolidation in seed, chemical, and machinery sectors

• Incentivizing domestic manufacturing to increase competition

Senators like Chuck Grassley and Joni Ernst have already introduced bills to study fertilizer pricing. But more action is needed—and soon.

The Bigger Picture

This isn’t just a farmer’s problem.

It’s an American economic issue. It’s a national security issue. And it’s a test of our resilience as a global ag leader.

Other countries like Brazil are catching up—and in some areas, passing us. If we don’t act, we risk losing not just market share but also our food and energy independence.

Final Thoughts

Iowa’s black soil is our black gold. We grow more with less, feed the world, and power it too. But even the best growers can’t compete in a system where the rules are broken, the markets are rigged, and the government won’t show up.

It’s time for a reset. Not tomorrow. Now.

Listen to the Full Episode
The Germinate Podcast featuring Grant Kimberley
Click here to listen