Your friend/acquaintance is correct.

It becomes an important component of the soil but does eventually dissapear if not replenished.

Soil is a sometimes complex mix of "stuff", mineral and organic. Soil will be composed of mostly some minerals and some organic matter which compost is.
If water collects someplace there is a reason and you need to determine what that reason is. If it is a simple drainage issue, the soil is too compact for the water to drain, then adding lots of organic matter wil be of help, but if that water is there because you have a seasonally high water table you need to correct a much wider area which would include your neighbors.

Thanks to all who replied! How nice--I got my answer in less than 24 hours!

I'm always interested in more information, though, so if anybody has something to add, please do so.

It depends upon what you mean by 'soil'. It turns into one component of the 'soil horizon' but it likely will not become what you think of when you look down into the hole you just dug.

Personally, I'd bring in fill dirt or something for a low spot, provided it is not something like a broken drain line, irrigation pipe, etc. and instead just a grading or design issue.

Dan

It doesn't disappear entirely but the end result - humus - will be ony a tiny percentage of the initial volume. And humus is a vital component of soils. But what you are referring to - piles of manure and straw - is not even compost and will breakdown even further than a 'fully' composted product. I agree with Dan that you'd be better served by bringing in soil to fill low spots but even better to determine what is causing the wet area and address it accordingly.

maryfrancis, that's exactly how I would deal with it. I, me, myself (you don't have to agree) have issues with buying soil. My own was stripped off this land during a recent reconstruction project and sold to someone. That's where soil comes from. You can build a lasagna style bed in that wet spot (I agree you need to determine why the area remains wet.) and add to it as it becomes necessary. I have an entire garden built from hay bales, pumpkins and leaves, and anything else available. It has shrunk in the last 15 years, but it's still higher than the surrounding area. I filled my initial planting holes with soil taken from other areas in my yard. The areas I stole from were filled with compost.

Your friend/acquaintance is not correct based on what you posted. It's not going to become soil, but rather a part of the soil. It doesn't essentially disappear, though. yes, it breaks down. Anyone with a compost bin knows that. But, once it breaks down to a certain point, that breaking down slows very considerably and more so when it's no longer in a pile but instead a part of the soil.

What is one reason Indiana and Illinois have the best soil in the country? Because of the organic matter that has built up over thousands of years (rather than disappeared) from the grass plains. As weather, animals (humans, worms, foragers, some insects), and plants mix compost in with the mineral earth it becomes soil.

I agree with annpat. I would, of course like to add. If you go get fill dirt, where will the water go? Just filling in a hole doesn't make rain stop falling. So, you will want to be sure it won't be diverted to another part of the garden as a result or elsewhere you definitely don't want it (like the house). Fill dirt will compact and cause greater diversion than compost.

Or you could use compost to amend the soil to facilitate natural drainage, which is the better option in my opinion. Plants that use more water can go there and further amend the soil with their root systems. I agree with Kimmsr. I don't think that should change the course of action, though. If it's the water table you aren't likely to fix the neighborhood, so you will have to do the next best thing and deal with that area the best you can. Compost can absorb a lot of water. Get the dirt less compact and it will be more drought tolerant and facilitate drainage all at once. Will you have to add to the organic matter as it breaks down over time? Yep. I don't see how that should be a problem, though.

You might consider more than just manure and straw, though. Get a much greater variety in there. I used a loose idea of the lasagna garden method for a bird garden area. I was killing two birds with one stone. My wife wanted a bird garden and I wanted to fill in a dip in the yard by the fence that caused water to stand. I laid down cardboard, piled on compostables, and now have a small very well draining bird garden with grasses, various coneflowers and black eyed susans, and sunflowers.

Below is a link to the NRCS site. It has a lot of useful info on what makes soil.

Here is a link that might be useful: Natural Resources Conservation Services

Being lazy I would turn the area into a water garden using native plants after doing some explorative digging. Another thing rather than digging is to call the do not dig people with you local utilities for them to check on any broken drain or water line. Water companies will take a sample of the water and match it with what their system puts out. Better to check now than have a big digging problem later.

Back to on topic. The layer will continue to break down until it returns to it's elemental form. May take a million years but it will continue to break down and form new combinations with the surrounding mineral.s