Soybean Rust

The U.S. Department of Agriculture's Animal and Plant Health Inspection Service confirmed the presence of soybean rust in the United States for the first time in November 2004. Soybean rust has reduced yields and raised production costs in major production regions around the world.

Recent Analyses From ERS

See Below for More on These Reports and Additional Sources of Information

The Value of Plant Disease Early Warning Systems: A Case Study of USDA’s Soybean Rust Coordinated Framework examines USDA’s system to provide real-time, county-level forecasts of soybean rust in the United States. The study estimates that the information provided by Federal, State, industry, and academic partners increased U.S. soybean producers’ profits by between $11 million and $299 million in 2005, or between 16 cents and $4.12 per acre, depending on assumptions, especially those particularly concerning the accuracy of rust infection forecasts.

What Is the Issue?

• In 2005, USDA developed an early-warning system that provides real-time, county-level forecasts of soybean rust (SBR). This system provides farmers, crop consultants, and others with interests in the U.S. soybean crop timely forecasts of SBR infestations that could sharply reduce soybean yields.
• Forecasts and recommended management activities are provided via a publicly accessible website, the first time a web-based system has been used for this purpose. The information on the website is developed through a large coordinated framework that involves many government and nongovernment organizations that regularly collect samples from fields, test them, and incorporate them into forecasting models.
• This study uses the SBR system as a case study to determine the value of such early-warning systems.

What Did the Study Find?

• The value of the framework’s information depends on many factors, particularly farmers’ perceived risk at the beginning of the season of SBR infection and the accuracy of the system’s forecast. Factors that cannot be precisely quantified.
• The system's value has been substantial, although the value of information from the system varies somewhat geographically. Even if forecasts are poor, resolving only 20 percent of SBR infection uncertainty for all fields planted with soybeans, the system’s value is an estimated $11 million in farmer profits in the first year. If forecasts resolve 80 percent of infestation uncertainty, the estimated value is $299 million.
• Our analysis suggests that the value of the information in 2005 likely exceeds reported costs of developing the information.
• The large potential benefits of the framework suggest that similar programs for other crop pests can be cost effective if, as in the case of soybean rust, preventative action can strongly mitigate damages in the event of an outbreak.

How Was the Study Conducted?

• The study applies conceptual methods from decision science to evaluate how much expected profits increase if farmers are able to fine-tune their rust management decisions in response to SBR forecasts.
• These methods are combined with USDA data on historical soybean yields, data from USDA’s Agricultural Resource Management Survey, estimated soybean rust damages from Brazil and Paraguay, and spore dispersion estimates based on an aerobiology analysis and historical experience with wheat stem rust.
• Information values were calculated over a broad range of assumptions because some of the parameters were not estimable and some parameter estimates were uncertain.

Prior to soybean rust's arrival in the U.S., Economic and Policy Implications of Wind-Borne Entry of Asian Soybean Rust into the United States estimated the potential economic impacts in the United States in both the first year of soybean rust's entry and subsequent years when producers have adapted to this new pest. An article in Amber Waves, September 2004, Economic Risks of Soybean Rust in the U.S. Vary by Region, provides a short summary of the report.

This analysis demonstrated that, while soybean producers and consumers would realize some new costs as a result of soybean rust, the U.S. agricultural sector as a whole would be minimally affected after adjusting to the presence of this new pest. Such resilience, seen in response to past shocks to the agricultural system, is explained by the availability of substitute crops (in production) and commodities (in consumption), as well as the technological savvy to mitigate pest losses.

Assumptions and Research Approach

• ERS consulted with several USDA agencies and university scientists to obtain the best biological intelligence on soybean rust (SBR) and the Brazilian experience with the pathogen. This multidisciplinary effort helped establish reasonable assumptions about the production implications of SBR entering the U.S. Specifically, the ERS analysis:
• Assumed U.S. soybean producers would experience an average production cost increase of $25/acre, representing one to two new fungicide applications.
• Simulated several yield-change scenarios to describe potential infestation severity of SBR outbreaks ranging from a 9.5-percent loss in yield to a 0.9-percent increase. (Fungicide treatments can also control other diseases that reduce yield but are not profitable to manage in the absence of SBR).
• Both first-year and medium-term effects (3-5 years beyond initial establishment) are analyzed in the scenarios.
• Estimated SBR yield and production cost impacts per acre are fed into a spatial equilibrium model for U.S. agriculture to simulate economic effects.
• Equilibrium economic impacts, after acreage and market adjustments, were estimated for the medium term by:
• Specifying three scenarios describing the potential extent of post-establishment SBR infestation for any given year:
• Only Appalachia, Southeast, and Delta regions conducive to infection;
• Appalachia, Southeast, Delta, Corn Belt, and Northeast conducive to infection;
• All soybean production regions conducive to infection.
• Defining all three scenarios by infestation severity, fungicide cost, and infestation extent.

Findings

• In the first year of SBR infestation, assuming that U.S. producers are able to treat with fungicides upon SBR detection, the expected value of losses (given that a rust outbreak occurs) across all U.S. agricultural producers and consumers would range from $640 million to $1,341 million, depending on the severity of infestation.
• These losses, which represent less than 1 percent of net economic benefits derived from agricultural activity, demonstrate the flexibility and resilience of the U.S. agricultural system as a whole.
• In the medium term, for all the yield loss scenarios:
• Soybean acreage declines in the most susceptible, higher cost soybean production regions, and is supplanted by alternative crops (largely cotton in Southern regions).
• Soybean acreage increases in regions less susceptible to SBR (Southern Plains, Northern Plains and Lake States).
• Acreage increases do not offset acreage declines; U.S. soybean acreage declines and U.S. soybean prices increase.
• In the medium term, average annual economic losses would be between $240 million and $2.0 billion, depending on the severity and extent of annual outbreaks:
• For the low-extent scenario, net returns to soybean production decline in regions that are prone to rust infestation, such as the Southeast, Delta, and Appalachia. Producers in these regions increase production of other crops such as cotton and rice. Net returns to soybean production could increase in regions less susceptible to rust.
• In neither the first year nor the medium term do soybean producers bear all of the costs of adjusting to soybean rust. Depending on the severity of annual outbreaks, soybean producers shoulder 60 to 70 percent of total losses, with U.S. consumers and livestock producers bearing the rest.

Interpretation of Results

• Agricultural producers and consumers could benefit (i.e., economic loss prevented) by as much as $67 million for each 1 percent of soybean yield loss avoided through development of more tolerant soybean cultivars, new fungicides, or more effective timing and application of fungicides. Over time, technological innovations spurred by the new soybean production environment may further soften the blow of soybean rust.
• Yield and revenue insurance premium schedules may have to be revised in regions susceptible to periodic rust outbreaks. Changes in coverage, and associated production risks, could force producers to alter crop production and insurance decisions.
• Environmental changes accompany changes in acreage, regional cropping patterns, and input use associated with rust outbreaks. The quantity of pesticides discharged into the environment is expected to increase with the augmented use of fungicides to treat infected soybean acres. Based on current and projected fungicides available to combat SBR, pesticide use (measured in active ingredients) is expected to increase by 0.1 to 0.2 pounds per treated soybean acre.
• The U.S. agricultural sector exhibits tremendous resilience, even when it is buffeted by large yield or production cost shocks affecting a key agricultural commodity, such as soybeans. This resilience springs from the availability of substitute crops in regions where soybean rust is most severe; the availability of alternatives to soybeans/soybean products as soybean prices increase; and the availability of inputs and technologies to limit economic losses.

For More Information, See Also:

Soybean Rust Information Site , USDA
Pest Alert: Soybean Rust, APHIS, USDA
Plant Protection and Quarantine Program, APHIS, USDA
Soybean Industry Statistics, ERS, USDA

Briefing Rooms on Related Topics

Soybeans and Oil Crops
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U.S. Agricultural Trade

media contact: Utpal Vasavada, 202-694-5540