1.

0 INTRODUCTION

The United States of America (USA), commonly known as the United States (U.S. or US)
or America, is a country composed of 50 states, a federal district, five major self-governing
territories, and various possessions. At 3.8 million square miles the United States is the world's
third- or fourth-largest country by total area and slightly smaller than the entire continent of
Europe's 3.9 million square miles With a population of over 325 million people, the U.S. is the
third most populous country. The capital is Washington, D.C., and the largest city by population
is New York City. Forty-eight states and the capital's federal district are contiguous in North
America between Canada and Mexico. The State of Alaska is in the northwest corner of North
America, bordered by Canada to the east and across the Bering Strait from Russia to the west. The
State of Hawaii is an archipelago in the mid-Pacific Ocean. The U.S. territories are scattered about
the Pacific Ocean and the Caribbean Sea, stretching across nine official time zones. The extremely
diverse geography, climate, and wildlife of the United States make it one of the world's 17
megadiverse countries.

Paleo-Indians migrated from Siberia to the North American mainland at least 15,000 years
ago. European colonization began in the 16th century. The United States emerged from the thirteen
British colonies established along the East Coast. Numerous disputes between Great Britain and
the colonies following the French and Indian War led to the American Revolution, which began
in 1775, and the subsequent Declaration of Independence in 1776. The war ended in 1783 with the
United States becoming the first country to gain independence from a European power. The current
constitution was adopted in 1788, with the first ten amendments, collectively named the Bill of
Rights, being ratified in 1791 to guarantee many fundamental civil liberties. The United States
embarked on a vigorous expansion across North America throughout the 19th century, acquiring
new territories, displacing Native American tribes, and gradually admitting new states until it
spanned the continent by 1848. During the second half of the 19th century, the Civil War led to
the abolition of slavery. By the end of the century, the United States had extended into the Pacific
Ocean, and its economy, driven in large part by the Industrial Revolution, began to soar. The
Spanish–American War and World War I confirmed the country's status as a global military power.

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 The United States emerged from World War II as a global superpower, the first country to
develop nuclear weapons, the only country to use them in warfare, and a permanent member of
the United Nations Security Council. During the Cold War, the United States and the Soviet Union
competed in the Space Race, culminating with the 1969 moon landing. The end of the Cold War
and the collapse of the Soviet Union in 1991 left the United States as the world's sole superpower.

The United States is the world's oldest surviving federation. It is a federal republic and a
representative democracy, "in which majority rule is tempered by minority rights protected by law.
The United States is a founding member of the United Nations, World Bank, International
Monetary Fund, Organization of American States (OAS), and other international organizations.
The United States is a highly developed country, with the world's largest economy by nominal
GDP and second-largest economy by PPP, accounting for approximately a quarter of global GDP.
The U.S. economy is largely post-industrial, characterized by the dominance of services and
knowledge-based activities, although the manufacturing sector remains the second-largest in the
world. The United States is the world's largest importer and the second largest exporter of goods,
by value. Although its population is only 4.3% of the world total, the U.S. holds 33% of the total
wealth in the world, the largest share of global wealth concentrated in a single country. The United
States ranks among the highest nations in several measures of socioeconomic performance,
including human development, per capita GDP, and productivity per person, while experiencing a
substantial amount of income and wealth inequality. The United States is the foremost military
power in the world, making up a third of global military spending, and is a leading political,
cultural, and scientific force internationally.

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 2.0 Soyabean Industry in United States of America

Soybeans are the second highest valued U.S. crop, with an aggregate production value over
$9.2 billion in 1986.Soybeans have been one of agriculture's fastest growing industries in recent
decades. Domestic production increased over sevenfold in the last three decades, while world
production rose about fivefold. This rapid growth in the volume produced and processed resulted
largely from increasing world demand for soy-beans and the primary products, soybean oil and
soy-bean meal.

This report provides information on the structure and performance of the soybean industry
and emphasizes production trends, practices, and costs; uses; prices; Government programs;
marketing patterns and transportation; processing; and world trade.

Soybeans were cultivated in ancient China, Manchuria, and neighbouring countries. The
crop was introduced into the United States from the Orient during the early 1800's, but it had little
economic importance here for several decades, with production being used primarily for hay.

Soybeans were first processed for oil and meal in the United States about 1910 by an oil
mill on the west coast. This mill processed beans that were imported from Manchuria. U.S.
production was first used for processing in 1914 when a few cottonseed oil mills in North Carolina
began crushing soybeans. The use of cottonseed oil mills for this purpose spread to other mills in
the South, but these first efforts were unsuccessful due to a lack of processing experience and
difficulties in obtaining a local supply of soybeans. Commercially successful processing of U.S.
soybeans began in 1922. After this initial success, several other companies entered the soybean
processing business in the 1920's. The industry has continued to expand.

Soybeans are grown in all States in the area bounded by North Dakota, Texas, Florida, and
New Jersey. This section describes production patterns and trends since 1950, characteristics of
farms growing soybeans, soybean supply, factors leading to production adjustments, and costs and
returns from soybean production. The major soybean-producing States are grouped into seven
production regions for comparing yields, production practices, trends, and other factors among
relatively homogeneous regions.

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 Soybeans are generally planted in May and June. The soybean plant flowers and pod-filling
occurs in July and August. Harvesting begins in September and is largely completed by mid-
November. Production is concentrated in the Corn Belt, the region with the highest average yields.

Increasing world demand for soybeans and their products during the last three decades
encouraged the expansion of soybean acreage. U.S. soybean acreage has increased steadily since
1950 when 15.6 million acres were planted. Plantings peaked at 71.4 million acres in 1979 and
dropped to 60.4 million acres by 1986. The largest year-to-year increase occurred in 1973 when
9.6 million acres were added. Soybean plantings fell a record 7.1 million acres in 1983 when the
payment- in-kind (PIK) program was in effect. Although soybeans were not covered in the PIK
program, soy- bean acreage declined because soybeans were not allowed to be planted on
conservation use acres, such as those set aside in the wheat PIK program. Even so, soybean
plantings exceeded corn plantings. Overall, farmers planted four times as many acres to soybeans
in 1986 as in 1950.

Production gains were even more dramatic than acreage gains, increasing 600 percent be-
tween 1950 and 1985. From a base of 300 million bushels in 1950, soybean production trended
upward, never displaying back-to-back yearly decreases in production. The largest crop was in
1979, when the 2-billion-bushel mark was first passed, with 2,261 million bushels harvested.
Production exceeded 2 billion bushels again in 1982 and 1985. The 1985 crop, 2,099 million
bushels, was produced on significantly fewer acres than the other 2-billion-bushel crops.

FIGURE 1

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 3.0 Soybean Exports in United States of America

Soybeans are the most valuable agricultural commodity exported from the United States,
accounting for more than $28 billion in export value in 2017. This is according to an international
marketing strategy prepared for the United Soybean Board (USB) and Qualified State Soybean
Boards (QSSBs).

Exports also accounted for more than 60 percent of U.S. soybean production last year,
making them key to growing the industry’s profitability. And soy exports continue to trend upward
for the foreseeable future, which is why USB earmarked $27 million for international marketing
in 2018.

This year, soybean plantings also are projected to surpass corn, reaching an estimated
record crop of 89 million acres. This is where the U.S. Soybean Export Council (USSEC) goes to
work to continue to grow the international market for U.S. soybeans. The group does so by
advocating for the use of U.S. soy in feed, aquaculture and human consumption, and promotes the
benefits of using soy through education programs.

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 Diagram: Export volume of soybeans worldwide in 201617 and 201718, by
country (in million metric tons)

The American Soybean Association’s (ASA’s) World Initiative for Soy in Human Health
(WISHH) complements the work of the USSEC by exploring smaller, immature markets to
promote the import of U.S. soy for human and animal diets in developing countries.

That is known as the “international marketing strategy” was commissioned by USB and
created by a firm called Context in 2017 to research the top target global soy markets and how to
best prioritize them. The report noted that U.S. soybeans are exported to more than 100 markets,
so focusing on high-priority markets will offer the best options for continued profitability.

Markets were divided into four categories:

 Immature (Ethiopia, Liberia),

 Basic “open” (Pakistan, India),
 Expansion “grow” (China, Mexico)
 Mature “maintain” (European Union, Japan, South Korea).

The study found 98 percent of U.S. soybean exports go to basic, expansion or mature markets, and
93 percent of U.S. soy trade value is in expansion and mature markets.

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 Diagram 2: Major countries of destination for U.S. soybean exports in 2016
(in million metric tons)

The report suggested a revised international marketing strategy that shifts more funding for
investment into new (basic) markets with increasing emphasis on growing demand in areas
currently with low consumption.

The evolving developments with tariffs between the U.S. and China continue to influence
the outlook for soybean prices. The relationship between U.S. and competitor export prices along
with the changing nature of trade flows merit monitoring during the 2018-19 marketing year.

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 4.0 How Tariff Plays a Huge role in United States’s Soybean
Exports

The implementation of tariffs on Chinese goods and the subsequent retaliation led to an
adjustment of trade flows in world soybean markets over the last few months. As the tariffs went
into effect, a price gap opened between Brazilian and U.S. export prices. The gap continually
widened when comparing an index of soybean prices at the port of Paranagua and New Orleans
prices since early June. The gap reached its broadest level late last week at an approximately $1.90-
per-bushel difference.

Diagram 3: United states soybean export prices

New Orleans prices came in near $8.50 per bushel. It is difficult to predict future changes
in the spread between the two prices, but they directly relate to the tariff level in China on U.S.
soybeans. The development of this price gap indicates the impact of tariffs on soybean markets
and highlights switches in Chinese soybean buying this year.

U.S. soybean exports to China typically reach the lowest levels of the marketing year in
the summer and build strength as U.S. harvest progresses. A large pullback in Chinese demand for

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U.S. soybeans appears set to continue indefinitely. The growth in soybean exports around the
world relies on the lower prices in place since June.

Pie chart: Changes in trends of United States soy bean Exports

The USDA reduced the Chinese soybean import forecast to 3.491 billion bushels in the last
WASDE report. Recently, the spread of African swine fever saw China indicate an even further
reduction in soybean imports over the next year to 3.2 billion bushels, down 9.5% from last
year. While decreased Chinese import projections may be optimistic, the prospect of substantial
increases in U.S. and South American soybean production next marketing year under a lower
export demand scenario would keep U.S. prices under pressure.

The growth of the U.S. trade deficit to China in August and the high likelihood of another
round of tariffs between the two nations makes a resolution of trade issues a low probability event
for the near future. U.S. exports of soybeans jumped over the last quarter of the marketing year as
lower prices spurred demand around the world. A large U.S. crop with lower export demand over
the next marketing year sets up a bearish picture for soybean prices.

As deteriorated trade relations with China continue, much focus and attention will be
placed on soybean exports for the U.S. crop currently growing. The USDA’s July WASDE report
was a sharp change in estimates from only a month before. The current export estimate reflects an

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11% drop in expectations for the 2018/2019 marketing year, as well as a broader, two-year slump
in exports.For the 2018/2019 soybean marketing year, much attention will focus on the USDA’s
current export estimate of 2.04 billion bushels. This number will serve as a benchmark of trade
war impacts on the agricultural economy.

Growth in soybean exports has been an important contributor to the U.S. farm economy in
recent years. Given the expected downturn in exports, commodity markets and farmers are left
wondering how long and how severe the downturn might be. Unlike the earlier dip in exports,
where drought and supply concerns were in play, the current situation is driven by a tit-for-tat trade
dispute with no end in sight.

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5.0 ECONOMIC INTERGRATION JOINED BY UNITED STATES OF AMERICA

The North American Free Trade Agreement made the world's biggest unhindered
commerce region of 450 million individuals. It's a monetary powerhouse of $23.46 trillion in total
national output. It connects the economies of the United States, Canada, and Mexico. The U.S.
economy is worth $19. 3 trillion; Canada, $1.76 trillion; and Mexico, $2.4 trillion. NAFTA's
exchange region creates more than the 28 nations in the European Union.

1. Quadrupled Trade

Somewhere in the range of 1993 and 2017, exchange between the three individuals
quadrupled from $297 billion to $1.17 trillion. That supported monetary development, benefits,
and employments for each of the three nations. It likewise brought down costs for purchasers.

Amid that time, the United States expanded its fares of products to the next two from $142
billion to $525 billion. That is 33% of its aggregate fares. Canada, with fares at $282 billion, and
Mexico, at $243 billion, were the main two U.S. send out business sectors in 2017. Imports from
Canada worth $300 billion and Mexico at $314 billion expanded from $151 billion of every 1993
to $614 billion. That is 26 percent of aggregate U.S. merchandise imports.

NAFTA helped exchange by taking out all levies between the three nations. It additionally
made concurrences on worldwide rights for business speculators. That diminished the expense of
business. It goads venture and development, particularly for private companies.

2. Brought down Prices

Lower taxes likewise decreased import costs. That diminished the danger of swelling and
enabled the Federal Reserve to keep loan fees low.

That is particularly essential at oil costs since America's biggest import is oil. The United
States imported $144.2 billion in oil from Mexico and Canada. On account of more prominent
U.S. shale oil creation, this figure was down from $157.8 billion out of 2007. NAFTA lessened
U.S. dependence on oil imports from the Middle East and Venezuela. It was particularly essential
when the United States restricted oil imports from Iran. Why? Mexico and Canada are well
disposed nations. Other oil exporters, for example, Venezuela and Iran, use oil as a political chess
piece.

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For instance, both began moving oil in monetary standards other than the petrodollar.

NAFTA brought down sustenance costs similarly. Sustenance imports totaled $39.4 billion
of every 2013, up from $28.9 billion out of 2009. It brought down the costs of new vegetables;
chocolate; organic product, with the exception of bananas; and hamburger.

3. Expanded Economic Growth

NAFTA supported U.S. monetary development by as much as 0.5 percent a year. The
divisions that profited the most were farming, cars, and administrations. U.S. cultivate fares to
Canada and Mexico grew 156 percent. That is contrasted with a 65 percent expansion in ranch
fares to whatever remains of the world. Homestead fares to Canada and Mexico alone were more
noteworthy than fares to the following six biggest markets joined. Add up to cultivate sends out
were $39.4 billion out of 2015.

NAFTA expanded homestead sends out on the grounds that it wiped out high Mexican
levies. Mexico is the best fare goal for U.S. meat, rice, soybean dinner, corn sugars, apples, and
beans. It is the second biggest fare goal for corn, soybeans, and oils.

NAFTA modernized the U.S. car industry by solidifying assembling and driving down
expenses. Most vehicles made in North America presently have parts sourced from every one of
the three nations. The expansion in aggressiveness enables the business to fight off Japanese
imports. Mexico trades a bigger number of autos to the United States than Japan. Prior to the 2008
retreat, Japan sent out twice the same number of as Mexico. By 2020, Mexico will fabricate 25
percent of all North American vehicles.

NAFTA supported U.S. benefit fares to Canada and Mexico from $25 billion out of 1993
to a pinnacle of $106.8 billion of every 2007. The retreat hit monetary administrations hard, so
benefits haven't exactly recouped. By 2009, they had just ascended to $63.5 billion. By 2012,
benefit sends out had enhanced to $88.6 billion.

In excess of 40 percent of U.S. Gross domestic product is administrations, for example,

money related administrations and medicinal services. NAFTA takes out exchange boundaries in
most administration segments, which are directed. NAFTA expects governments to distribute all
directions, bringing down concealed expenses of working together.

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4. Made Jobs

NAFTA sends out made 5 million new U.S. employments. A large portion of those
occupations went to 17 states, yet all states saw a few increments. U.S. producers included in
excess of 800,000 occupations somewhere in the range of 1993 and 1997. Producers sent out $487
billion out of 2014. It created $40,000 in fare income for every assembly line laborer.

Indeed, even imports from NAFTA accomplices made employments. That is on the
grounds that very nearly 40 percent of U.S. imports from Mexico began with American
organizations. They planned the items locally, at that point re-appropriated some segment of the
procedure in Mexico. Without NAFTA, they would have gone to China. They might not have been
made by any stretch of the imagination.

5. Expanded Foreign Direct Investment

Since NAFTA was ordered, U.S. outside direct interest in Canada and Mexico has
dramatically multiplied. It came to $452 billion by 2012, year of the most recent accessible
insights. That supported benefits for U.S. organizations by giving them more chances to create and
markets to investigate.

Canadian and Mexican FDI in the United States developed to $240.2 billion, up from
$219.2 billion out of 2007. That is extra venture which went generally to U.S. assembling,
protection, and saving money organizations.

NAFTA secured scholarly properties. It helped creative organizations by debilitating

pilfering. It helped FDI in light of the fact that organizations realize that worldwide law will defend
their rights. NAFTA diminished speculators' hazard by ensuring they will have indistinguishable
legitimate rights from neighborhood financial specialists. Through NAFTA, speculators can make
legitimate cases against the legislature on the off chance that it nationalizes their industry or takes
their property by prominent space.

6. Decreased Government Spending

NAFTA enabled firms in part nations to offer on all administration contracts. That made a
dimension playing field for all organizations inside the assention's fringes. It cut government
spending shortages by permitting more rivalry and lower-cost offers.

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 6.0 CONCLUSION

The soybean and soybean product market is growing, but the U.S. market share is lower
than it was in 1980. After hitting a low in 1994, the U.S. market share stabilized for several
years. Nominal and real prices declined in the international market as market supplies exceeded
demand for soybeans and soybean products. Our empirical model shows that marlet shares
converged in the late 1990’s. The convergence suggests that the Gaskins model of a dominant
firm is the appropriate way to look at the international soybean market

Apparently Argentina and Brazil see themselves as price takers, or ‘fringe firms’ in the
international market. There is no indication that Argentina or Brazil limited production to
maintain a stable international market price. The increased production and trade by the major
producers precludes that conclusion. Until the present, U.S. policymakers, by using the loan
deficiency payment, maintained the U.S. market share

From the static model, one could conclude that there is no way out for the U.S. soybean
industry. The Gaskins model for an expanding market is more optimistic in its outcome. A
dominant firm with no cost advantage does not necessarily price itself out of the market, but
instead maintains a constant market share over the long haul. This study demonstrates that unless
a policy maker looked at the case of a growing market as described by Gaskins, his view of the
soybean market would be much too pessimistic. One sticky problem, howewer, is that as long as
the major players operate as they have, any U.S. attempt to unilaterally maintain domestic
support prices become more and more expensive

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