|
INDIANAPOLIS, Ind. (April 13, 2007) — U.S. soybean meal should
remain competitive in the world market despite increased market
pressures from biodiesel and ethanol, according to a report released by
the United Soybean Board (USB).
The soybean checkoff conducted an in-depth examination of how increased
biodiesel and ethanol production could affect the supply and demand of
soybean meal.
“It is important for us, as farmers, to find out if and how the
additional soybean meal produced because of the increased biodiesel
production can be absorbed into the market,” said Mark Seib, Posey
County farmer and president of the Indiana Soybean Alliance. “A
significant portion of the value of our soybeans depends on a strong
soybean meal market. This study - funded by farmer-invested checkoff
dollars - indicates that despite some challenges U.S. soybean meal
should remain competitive in the world marketplace.”
Demand for soy biodiesel has skyrocketed, with 75 million gallons of
biodiesel produced and sold in 2005 and an estimated 225 million
gallons produced and sold in 2006. According to the National Biodiesel
Board, there are currently 105 biodiesel manufacturing plants in the
United States, with approximately 77 biodiesel plants under
construction and another eight undergoing expansion.
Today, Indiana has three operating biodiesel plants and one under
construction. According to the Indiana State Department of Agriculture,
the four biodiesel plants are expected to produce a total of 100
million gallons of biodiesel each year.
Increased domestic soybean crush to fill the demand for soybean oil
used in biodiesel production will also result in additional soybean
meal supplies, leaving soybean farmers and the rest of the soybean
industry to answer the question, “What will happen to all the
additional soybean meal?”
The study entitled “Soybean Meal Evaluation to 2020,” produced by LMC
International, a research firm with experience in international
agriculture, found the future of soybean meal is influenced by many
factors, such as petroleum oil prices, export markets, the global
animal agriculture scenario, competition from alternative feed
ingredients and improved compositional traits for soybeans, so there is
no one simple answer to supply-and-demand challenges.
The study indicates:
•The United States will see an increase in soybean meal exports, but a
decrease in the amount of whole soybeans exported. Currently, nearly
half of the whole soybeans produced in the United States are exported,
but in the future the soybean industry may need to market more soybean
meal, rather than whole soybeans. That could have a profound impact on
our largest export markets like China that has an active crushing
industry. Soy meal prices will have to be competitive to encourage
China to switch from buying whole beans to soybean meal.
•Corn acreage is expected to rise in the short term due to the ethanol
expansion, but decreased corn acres by 2015, with corn acres falling
from about 79 million acres planted in 2005 to about 73 million acres
planted in 2020. At the same time, soybeans will pick up the slack,
with acreage rising from about 74 million acres in 2005 to nearly 82
million acres in 2020. The decreased corn acres will be a result of
higher corn yields per acre thus reducing the number of corn acres
planted and a strong world demand for soybean meal from the livestock,
poultry and aquaculture industries.
•Price implications would turn farmers in favor of soybeans in the near
future. Soybean oil prices are forecasted to rise through 2010 and then
begin weakening as increased palm plantings mature and global oil
supplies expand. Soybean meal prices are projected to remain steady to
strong until 2020. The study found that a growing share of the total
soybean product value will continue to be derived from meal in the
middle to latter part of the next decade.
•Maintaining and increasing a viable U.S. livestock and poultry
industry is critical with the increased domestic soybean meal
production. The report expects U.S. animal agriculture to be able to
utilize about 75 percent of the increased supplies of soybean meal.
Currently, U.S. animal agriculture uses more than 98 percent of the
soybean meal used in this country.
•Increased soybean meal usage in the world’s aquaculture industry. The
newest market for soybean meal is the world aquaculture industry, still
in its infancy. The demand for fish around the world indicates that the
soybean meal used as fish food could surpass the demand seen from the
poultry sector. The soybean checkoff funds the world aquaculture
initiative in showing fish producers how to replace fishmeal with
soybean meal, soy protein concentrates and isolates.
•The report suggests that increased soybean oil content in bean
varieties planted by farmers, although a boon for end users, may not be
to the best advantage of the farmer as increased oil content will
result in increased oil supply, which could in turn lower oil prices.
Further, increasing the oil content of the soybean will likely
sacrifice protein levels, making soybean meal, currently the preferred
animal protein meal, comparable to other plant protein meals and thus
reducing its value. If both the oil and meal value of the soybean are
decreased, the study projects that the overall value of the soybean
would decrease, which does not appear to offer a logical incentive to
farmers to increase oil content.
•Dried Distillers Grains (DDGs), a co-product of ethanol production
that can be used as an animal feed ingredient will not replace soybean
meal as the main protein source in swine and poultry feed. DDGs have
more potential with the cattle industry (ruminant animals), but DDGs
are high in fiber and cannot easily be subbed for poultry and swine
diets.
The study concludes that while competition for acreage and alternative
feed sources may put pressure on soybean markets, soybeans will
continue to enjoy many competitive advantages. Soybean meal remains the
leading protein source for swine and poultry and is unlikely to lose
much ground in those areas to DDGS.
In addition, global consumer preference for poultry and swine, along
with increases in per capita income enabling people to add more meat,
milk and eggs to their diets, will drive increased use of soybean meal.
At the same time, aquaculture markets, which are growing tremendously,
will rely more heavily on soy protein sources in the future.
The strength of this demand for poultry, pork and fish, along with
soybean oil use for food and fuel, is expected to keep the future of
U.S.-produced soybeans looking bright through the year 2020 and beyond.
Indiana’s role
Two years ago, the Indiana Soybean Alliance (ISA), led by its elected
farmer board, identified the importance of the state’s livestock
industry during its strategic planning process, according to Seib. The
ISA has made a significant investment in projects that help grow the
number of dairy, beef, poultry and pigs fed in Indiana.
“The state’s pork and poultry industries are soybean farmers’ largest
customer for our soybean meal,” said Seib. “The ISA is devoting
checkoff funds to help livestock producers maintain and grow their
livestock business along with educating non-farm Hoosiers about the
importance of having a strong livestock and soybean industry in the
state.”
The ISA board has also made a major commitment to aquaculture research,
investing more than $1 million in the last 15 years on projects at the
state, national and international levels. The ISA has funded work at
the Purdue University Aquaculture Center where Dr. Paul Brown and a
team of researchers are working on soy-based diets for farm-raised
fish. This summer ISA will sponsor the development of a strategic
plan for Indiana’s aquaculture industry.
“The growth potential for the aquaculture industry is tremendous,” said
Seib. “Soybean meal can be a cost-effective, efficient way to feed this
expanding market.”
To view a copy of the “Soybean Meal Evaluation to 2020” study, visit
the United Soybean Board website at
http://www.unitedsoybean.org/Library/Studies.aspx
|
