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Meeting End-User Needs Drives Soybean Meal Demand

From United Soybean Board News   www.unitedsoybean.org
 
 
Soy checkoff helps capture more value for farmers by improving meal quality
 
Soy checkoff helps capture more value for farmers by improving meal quality
Demand for soybean oil and meal are the critical factors determining market value for soybeans.
 
Although the price per pound for soybean oil is typically higher than the price per pound of meal, the comparison doesn’t mean oil contributes more value per bushel of soybeans.
 
“The need for both oil and meal makes processing  plants run, depending upon what the market wants at the time," says Bruce Weber, director of soybean product line grain marketing for CHS, Inc. “Meal is more important to the price structure, and the impacts of supply and demand are much closer.”
 
Both components are important, but when it comes to providing value to farmers, meal is the engine that drives profitability.
 
Looking beyond protein to increase demand
 
Soybean meal moves through the market as a direct reflection of livestock needs. A healthy animal agriculture sector creates demand for meal. And because of soybean meal’s availability, protein content and overall nutritional composition, it’s a preferred ingredient for most livestock feed rations.
 
“Soybean meal is an ideal protein complement to corn,” says Chris Hostetler, director of animal science for the National Pork Board. “Soybean meal is relatively low in energy but high in crude protein, especially lysine. Combining corn and soybean meal provides a nutritionally balanced diet for pigs.”
 
Nutritionists formulate feed rations based on nutrient needs, but many overseas buyers still look at price first when considering meal purchases.
 
Because it’s often higher priced than soybean meal from other origins, U.S.-produced meal has been at a disadvantage. Shifting the value proposition to include more than crude protein could increase demand and benefit U.S. farmers.
 
U.S. soybean meal’s nutritional bundle goes well beyond just crude protein to include amino acids, energy, vitamins and minerals. These constituents not only are part of the U.S. Soy Advantage, but are also crucial to the diets of poultry and livestock. And measuring meal quality by more than just crude protein is changing how meal is valued.
 
Farmers are not yet paid for their soybeans based on constituent values, so most remain focused on yield. But knowing the attributes end users want from their meal can help farmers make choices that impact future profitability.
 
Exploring opportunities to boost quality
 
Nutritionists and buyers alike are drawn to meal that has consistent quality, so they can be assured of the product they are getting and how their animals will perform. Even though soybean meal is already widely incorporated in animal diets, there is always room for improvement.
 
Here are three soy checkoff-funded research projects that explore the quality and quantity of meal protein so that every soybean harvested meets the needs of our customers.
  • Applying innovative technology to improve soybean meal protein quality
Wayne Parrott, Ph.D., University of Georgia, is leading a project using brand-new CRISPR/Cas9 genome editing technology to improve meal protein quality. 
 
Genome editing allows researchers to identify and modify genes in soybeans in an attempt to alter seed composition.
 
“It’s kind of like using word processing software on your computer,” says Parrott. “It’s nice to be able to delete the stuff you’ve typed, or find and replace text or insert text.”
 
Parrott’s research will help create breeding stock that will be used in combination with improved genetics to breed the most desirable traits into the future varieties available to farmers.
  • Breaking increased soybean meal protein barriers 
USDA Agricultural Research Service researcher Rouf Mian, Ph.D., is leading a project to overcome the challenges increased meal protein content presents by breaking the negative relationships it has with seed oil content and yield.
 
Using soybean cultivars from places such as Korea, that have the genetics for high meal protein levels, Mian’s project is leveraging findings from previous soy checkoff-funded research to breed new varieties with high meal protein levels and desirable yield potential. 
 
These varieties will be made available to farmers in all maturity groups over the next five years.
  • Collaborating with industry partners to investigate new opportunities 
The soy checkoff has partnered with DuPont Pioneer to conduct a proof-of-concept project to explore the potential for development of new varieties with improved meal protein quality and increased meal protein levels in maturity groups 0-1. 
 
This project will confirm whether it is genetically possible to increase protein content in soybean lines and ensure that continued soy checkoff investment in breeding for increased protein is justified.
 
In the end, it’s about producing the genetics that farmers need to meet customer demand.
 
“It means more value added along the chain, meaning more money for the farmer and fewer expenses for the farmers that are then feeding that soybean to a chicken or to a hog,” says Parrott. “It’s really about having a better and more useful soybean.”
 
Opening new markets for U.S. soy
 
China remains the No. 1 importer of U.S. soy. But as worldwide appetites for protein grow, so do soy checkoff-supported efforts to open new markets and build similar preferences for U.S. soy in other areas, such as India and its neighboring countries.
 
India is second only to China when it comes to population. It’s also a strong emerging market for U.S. soy – and is rapidly growing its soy use. Half of India’s population is younger than 24, and by 2030 its middle class is expected to be larger than the entire U.S. population. It’s also the second largest aquaculture producer in the world and third in egg production; in fact, India’s feed industry comprises about 90 percent of the soybean meal volume consumed there.
 
To this end, the U.S. Soybean Export Council (USSEC), supported by the soy checkoff and the American Soybean Association (ASA), began designing programs to build demand for domestic soy (thus sparing markets for U.S. soy in the Asian region) as far back as the 1990s.
 
“By teaching Indian entrepreneurs the value and utility of soybean meal, we created awareness and increased consumption of U.S. soy in India’s neighboring countries,” recalls Vijay Anand, deputy regional lead – Asia subcontinent, USSEC.  “Today, USSEC programs continue to address market development. As the Indian population becomes younger, wealthier and more urban, we’ve taken the approach of growing businesses that will use U.S. soy in the future.”
 
This includes 244 new poultry and aquaculture businesses in India in the past seven years, which collectively provide 12.21 million metric tons of additional feed milling capacity.
 
This rising demand for soybean meal, coupled with a drop in India’s soybean production, is creating more opportunities for U.S. soy. But it’s not without constraints, as the Indian government has a protective policy in place to ban the import of genetically engineered (GE) materials.
 
“This year, five container loads of non-GE U.S. soybeans have been imported into India for the first time, which is a promising start,” Anand says. “Testing of U.S. soybeans has convinced the industry about U.S. soy’s quality and effective trade procedures, showing cracks in India’s rigid import and regulatory process.”
 
Indicative of growing interest in this region, USSEC will conduct its first regional trade exchange event to further create and sustain markets for U.S. soy in this region.
 
“Feeding the world is so far from just how we can increase yield,” says Matt Stutzman, ASA director and Michigan grower. “There are so many market-access issues that need to be addressed in order to get our commodity to the people who need protein.”
 
China may import more U.S. soy than any other country, but the soy community is not putting its proverbial eggs in one basket. It’s working to grow and support demand in other populous regions, which is why USSEC and the soy checkoff will continue to develop markets and promote U.S. soy in growing regions such as India.
 
Its neighbors, including Bangladesh, Sri Lanka, Pakistan and Nepal, are among the most populated countries on earth – offering tremendous opportunity for U.S. soy and the protein it provides.
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