High planting densities expose field crops to competition for light, which typically induces shade avoidance responses such as stem elongation. While adaptive in natural environments, these responses can lower yield and increase susceptibility to stress in agricultural systems. We tested whether soybean breeding over the past century has altered shade avoidance and associated trade-offs. Twenty-one Canadian cultivars released between 1922 and 2018 were grown in pots under either control or shade-avoidance-inducing light conditions, achieved by altering reflected light spectrum without reducing photosynthetic radiation. Plants exposed to shade-avoidance-inducing light grew taller and suffered greater thrips damage, consistent with expectations of increased stem elongation and reduced defence. More recent cultivars showed higher susceptibility to thrips than older ones. Breeding progress in seed yield was driven largely by greater biomass allocation to seeds and reduced branching. However, under shade-inducing light, the yield improvements were smaller, pointing to shade avoidance as a limiting factor. Our results indicate that while soybean breeding has improved yield and shifted morphology towards ideotypes suited for high-density stands, persistent shade avoidance responses constrain breeding progress for yield and increase herbivore susceptibility. Breeding strategies that reduce sensitivity to neighbor cues may therefore improve soybean productivity and resilience.