Yes, it changes incentives in the meat industry, but giving money to soy farmers shrinks the meat industry. But which of these is better depends on a) your preferences and b) the economics of these industries. The short term cost of contributing to the suffering of animals my not be worth the tiny marginal improvement in the amount of suffering animals.
I don't know the economics of it, but based on my current knowledge, I think the safest bet is refraining from consuming animal products as much as possible, and then buying the most humane products when necessary.
I ended up reading this article about animal suffering by this Christian apologist called William Craig. Forgive the source, please.
He continues the argument here.
How decent do you think this argument is? I don't know where to look to evaluate the core claim, as I know very little neuroscience myself. I'm quite concerned about animal suffering, and choose to be vegetarian largely on the basis of that concern. How much should my decision on that be affected by this argument?
EDIT: David_Gerard wins by doing the basic Google search that I neglected. It seems that the argument is flawed. Particularly, animals apart from primates have pre-frontal cortexes.