How Soy Biobased Products Benefit the U.S. Economy

The U.S. soybean industry is an American success story.

New Report Shows U.S. Biobased Products Industry Contributes $369 Billion, 4 Million Jobs to American Economy.

2014 Farm Bill provisions will expand opportunities in the biobased sector by promoting advanced biofuels, renewable chemicals, and biobased product manufacturing efforts.

WASHINGTON, June 16, 2015 - Agriculture Secretary Tom Vilsack today announced the release of a new report that shows the U.S. biobased industry is generating substantial economic activity and American jobs.  He also announced changes under the 2014 Farm Bill that will create additional opportunities for growth in renewable plant-based materials, supporting the Obama Administration’s efforts to develop a new, rural economy and promote creation of sustainable jobs. 

“This report is the first to examine and quantify the effect of the U.S. biobased products industry from an economics and jobs perspective.  Before, we could only speculate at the incredible economic impact of the biobased products industry. Now, we know that in 2013 alone, America’s biobased industry contributed four million jobs and $369 billion to our economy,” Vilsack said. “Today, we are also adding to the number of innovative products carrying USDA’s BioPreferred® label and expanding options for our nation’s biorefineries. This means small businesses and global companies alike can continue to harness the power of America's farms and forests to create new and innovative biobased products that are used all around the world.”

According to the Economic Impact of the Biobased Product Industry report, each job in the biobased products industry is responsible for generating 1.64 jobs in other sectors of the economy.  In 2013, 1.5 million jobs directly supported the biobased product industry, resulting in 1.1 million indirect jobs in related industries, and another 1.4 million induced jobs produced from the purchase of goods and services generated by the direct and indirect jobs.

The report builds on the “Why Biobased?” report released by the USDA in October 2014. Estimates are that the use of biobased products currently displaces about 300 million gallons of petroleum per year – equivalent to taking 200,000 cars off the road.

The Secretary also announced changes to include new forest products in the BioPreferred program, along with proposed changes to the former Biorefinery Assistance Program to assist in the development of cutting-edge technologies for advanced biofuels, renewable chemicals, and biobased product manufacturing.

The final BioPreferred® program rules will no longer exclude mature market products (those that had a significant market share prior to 1972), providing consumers with more innovative wood products and other materials carrying USDA BioPreferred® label. Forest products that meet biobased content requirements,notwithstanding the market share the product holds, the age of the product, or whether the market for the product is new or emerging, also now meet the definition of “biobased product.”

The Secretary also said today that USDA is making improvements to its Biorefinery Assistance Program (Section 9003). The program, which was renamed as the Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program as part of the program’s Farm Bill reauthorization, provides loan guarantees of up to $250 million for the construction and retrofitting of commercial scale biorefineries and biobased product manufacturing facilities. In a rule that will be published in the Federal Register next week, biorefineries that receive funding are allowed to produce more renewable chemicals and other biobased products, and not primarily advanced biofuels. Also, biobased product manufacturing facilities would be eligible to convert renewable chemicals and other biobased outputs of biorefineries into “end-user” products. The new regulations also implement a streamlined application process.

Created by the 2002 Farm Bill and reauthorized and expanded as part of the 2014 Farm Bill, the USDA BioPreferred program's purpose is to spur economic development, create new jobs and provide new markets for farm commodities.  The BioPreferred program commissioned the independent Economic Impact of the Biobased Product Industry report, which is primarily authored by Dr. Jay Golden, Director of Duke University’s Center for Sustainability & Commerce, and Dr. Robert Handfield, Professor of Supply Chain Management at North Carolina State University’s Poole College of Management.
The report found that the seven major overarching sectors that represent the U.S. biobased products industry’s contribution to the U.S. economy are: agriculture and forestry, biorefining, biobased chemicals, enzymes, bioplastic bottles and packaging, forest products, and textiles.


The study also includes location quotients by state to show the impact of the industry on individual states. Seven case studies are presented from stakeholders such as The Coca-Cola Company and PlantBottle packaging, Patagonia, and Ford.

Today's announcement was made possible by the 2014 Farm Bill. The 2014 Farm Bill builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for taxpayers. Since enactment, USDA has made significant progress to implement each provision of this critical legislation, including providing disaster relief to farmers and ranchers; strengthening risk management tools; expanding access to rural credit; funding critical research; establishing innovative public-private conservation partnerships; developing new markets for rural-made products; and investing in infrastructure, housing and community facilities to help improve quality of life.

 

Soybeans came to the American colonies from China around 1765. Today, the United States produces approximately 35 percent of the world’s soybeans, and they boost America’s trade balance.

Soy is the top U.S. agricultural export, with roughly 55 percent of the U.S. soybean crop going to customers abroad. China is the No. 1 customer for U.S. soy.

At the same time, soybeans are helping create new opportunities for American manufacturing.

The BlueGreen Alliance, a national partnership between labor unions and environmental organizations, commissioned a study, “The Economic Benefits of a Green Chemical Industry in the United States: Renewing Manufacturing Jobs While Protecting Health and the Environment.” It cites biobased chemicals as a means of reversing the decline in U.S. jobs in the chemical industry.

According to the report, from 1992 to 2010, the chemical industry lost more than 300,000 jobs. However, if just 20% of chemical production switched from making petrochemical-based plastics to plant-based plastics, 104,000 jobs would be created. Moving to plant-based plastics creates jobs and allows companies to source materials from within the United States, instead of relying on imports of foreign oil.

The American Chemistry Council (ACC) reports the important multiplier effect such jobs have for America. Every new job in the chemical industry creates 5.5 additional jobs elsewhere in the economy, according to ACC’s analysis of federal studies.

Recognition of these opportunities has prompted the manufacturing-heavy state of Ohio to support biobased products purchasing and other initiatives at the state level. You can read more about that in USB’s Profile of Biobased Success on Ohio at www.soybiobased.org


Ohio’s economy has a strong foundation in the development and production of industrial materials. Indeed one materials sector, polymers, represents the largest single industry in Ohio. Increasingly biobased feedstocks are being seen as a key strategic need for the chemicals, polymers and other advanced materials industries—largely because of the price and supply volatility of traditional fossil-based petrochemical and natural gas feedstocks.

~ Battelle Memorial Institute Technology Partnership Practice Senior Director Simon J. Tripp


Citing biobased products as one of the fastest growing economic sectors in the world, 98 counties in Arkansas, Kentucky, Mississippi, Missouri and Tennessee have launched a regional strategy to support the development of biobased products in the Mississippi Delta.

Biobased Manufacturers, like Textile Management Associates (TMA), have their own positive economics to tell. Through its use of polyols manufactured from American-grown soybeans, TMA’s Universal Textiles Technologies (UTT) replaces petrochemicals traditionally used in polyurethane carpet backings for the last 30 years. UTT’s soy-based backings displace millions of pounds of petrochemicals each year, while showing no increase in cost, resulting in a cost-neutral environmentally responsible solution for customers. This has driven demand for their products, such as Signature Crypton Carpet®. TMA companies were able to grow their workforce by 10 percent in the last three years in contrast to the overall unemployment rate of 11 to 12 percent in the Northwest Georgia area.

Questions on switching to a biobased product? Just ask!

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