Over the past three decades, global supplies of corn and soybeans have increased due to gains in productivity and expanded planting areas. According to the U.S. Department of Agriculture (USDA), yields for these crops in the United States rose by more than 20 percent from 2010 to 2025, with corn acreage increasing by 10 percent and soybean acreage by 2 percent. Similar trends have been observed in other major producing countries, including Brazil and China, resulting in a doubling of worldwide corn and soybean supplies over the last 30 years.
In the United States, much of this increased supply has been used for biofuel production and exports. The most significant growth in corn demand has come from ethanol production since Congress enacted the Renewable Fuel Standard (RFS) in 2007. This policy requires gasoline and diesel refiners to meet certain quotas for biofuels. As noted by Francisco Scott and Ayesha Cooray, economists at the Federal Reserve Bank of Kansas City, “The RFS and other subsidy programs that promote biofuels also boosted demand for soybean oil, a byproduct of soybean crushing used in biofuel production.” Soybean exports have also doubled between the periods 1990–2009 and 2010–25 as demand from China increased.
Despite these trends, export demand may not be sufficient to absorb future increases in crop supplies. While U.S. exports of corn and soybeans have grown since the early 2000s—securing key trading partners such as Mexico—the overall share of U.S. crops in global trade has declined. Infrastructure improvements have enabled competitors like Brazil to increase their market share, particularly with China now importing more soybeans from Brazil than from the United States. Trade disputes and stronger competition could further limit export-driven demand growth.
Looking ahead, proposed changes to federal biofuel policies are expected to become a primary factor influencing demand for U.S. corn and soybeans. Planned revisions to RFS quotas would raise requirements for biomass-based diesel—mainly produced using soybean oil—and renewable fuels such as corn ethanol through at least 2027. If approved, these changes would increase biomass-based diesel quotas by half compared with 2024 levels while also raising targets for other advanced biofuels.
Additionally, new provisions under the Clean Fuel Production Credit (45Z), extended through 2029 by recent legislation known as the One Big Beautiful Bill Act (OBBBA), will encourage greater use of North American feedstock by limiting tax credits to fuel produced using inputs from the United States, Canada, or Mexico. The OBBBA also adjusted environmental benefit calculations for biofuels by excluding indirect land-use penalties—a move that could favor domestic crop producers.
Over the past year, American crop producers have faced slim profit margins due to an oversupply relative to demand; rising international competition and recent trade disputes may continue to challenge export markets for these commodities. However, recent federal actions on biofuel policy are likely to generate new sources of domestic demand for U.S.-grown corn and soybeans.
“Recent proposed and enacted federal biofuel policies are likely to create new demand for U.S. corn and soybean crops, partially absorbing production and supporting prices,” wrote Scott and Cooray.
The views expressed are those of Francisco Scottand Ayesha Cooray at the Federal Reserve Bank of Kansas City; they do not necessarily reflect official positions of either that institution or the Federal Reserve System.
