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Soy demand looking up

Article cover photo
Representatives of soybean consumers and organizations provided an overall rosy demand outlook at the State/National Soybean Staff Meeting this week. (Photo: Matthew Wilde/Iowa Soybean Association)

By Matthew Wilde, ISA senior writer

Representatives of soybean consumers and organizations provided an overall rosy demand outlook at the State/National Soybean Staff Meeting this week.

Swine and aquaculture, international trade, biodiesel, transportation and new uses were highlighted during a breakout session Tuesday at the Embassy Suites in Lexington, Kentucky. Experts said fundamentals are positive to utilize the record soybean acres being sowed.

Bill Even, CEO of the National Pork Board, said the pork and beans are great partners.

U.S. hog inventories are at record levels and growing 4 percent per year, he said. There’s 71 million head on farms and pork production in pounds has nearly doubled since 1990 nearing 30 million annually.

Domestic swine currently consume nearly 8.2 million tons of soybean meal. Even expects another 688,000 tons will be needed with an 8.4 percent increase in pork production and 1.2 million more tons with a 15 percent increase to meet future domestic and international pork demand.

“In the long haul, we know we’re in a growth industry,” Even said. “These expanding hog numbers will help the entire soybean industry. That’s why our industries are joined at the hip and always will be.”

Five new pork packing plants coming on line or in the process of being built will help the industry grow, he said.

Needed growth

Ed Ebert, a marketing expert with the Indiana Soybean Alliance, said additional soy demand is needed due to record U.S. and global stocks. Even though demand is at an all-time high, production is as well.

The government increased U.S. soybean ending stocks by 10 million bushels this month to 445 million bushels. Global ending stocks are projected at a record 87.4 million metric tons.

“We’ve done a great job in production. Bottom line we’re doing record demand but a half million bushels of stocks isn’t a recipe for higher prices.”

The U.S. Department of Agriculture recently lowered its season-average soybean price by 5 cents at the midpoint to $9.55 per bushel.

“If it wasn’t for the work of the soybean checkoff, we would be talking about prices about $2 lower. We’ve done our job,” Ebert said.

U.S. soybean and soybean meal exports are running ahead of last year’s pace, according to Jim Sutter, CEO of the U.S. Soybean Export Council (USSEC).

As of April 6, the nation has sold 48 million metric tons of soybeans this marketing year. Soybean meal exports during the same time frame are 5.9 million metric tons.

Soybean sales, especially to China, which buys one out of every four rows of U.S. beans, are expected to grow. Grant Kimberley, Iowa Soybean Association (ISA) market development director, said he and other ISA leaders saw several “sow scrapers” — 8-story farrowing buildings — being built in China during a recent trade mission. The country is modernizing its pork industry to meet demand, but it can’t quite keep up as the need for protein continues to grow with the middle class.

“The scope and scale of this was just fascinating,” Kimberley said. “There’s no quenching their appetite for pork. That bodes well for soybean demand and pork exports.”

Pigs consume the most soybeans worldwide.

Even said soybean organizations contribute more than $2 million to promote meat exports. Even though China is almost self-sufficient in pork, he said great opportunities exist to capture market share for imports, especially for cuts that aren’t desirable in the U.S.

“If you Look at market potential, you may want to invest hard earned dollars in China … to walk soybeans off the farm,” Even added.

Biodiesel

Biodiesel use and production is expanding, which will benefit soybean farmers.

Alan Weber of the National Biodiesel Board said soybean oil is the most widely used feedstock at 47 percent, on average. While that percentage has been consistent the last few years, he said that’s not the big story.

Soybean oil use by the industry has more than tripled since 2010 to nearly 6 billion pounds in 2016. Biodiesel is the second largest user of U.S. soybean oil, Weber said.

“A study we did with Informa shows biodiesel adds 63 cents per bushel to soybeans. That’s important … and it makes me smile with you,” he added.

True fish story

Aquaculture is a growing market for soy, according to Will McNair of the USSEC.

Pond-raised fish production is skyrocketing — 8 percent annually — to meet demand as wild-caught supplies are dwindling, officials said. “The term ‘plenty of fish in the sea’ may no longer ring true,” McNair said.

Aquaculture tonnage is expected to hit 100 million metric tons by 2025. Asian producers lead the way.

An estimated 15.5 million metric tons of soybeans are currently crushed for aquafeed. It’s the fastest growing sector for soy.

“That’s a big number and we expect that to grow considerably,” McNair said. “The headline here is the growing tonnage.”

More pond-raised fish is eaten worldwide than beef, officials said.

The ISA invested soybean checkoff funds in developing pond raceway technology to bolster soy use in aquaculture. It’s a more efficient way to raise fish.

Keep soy moving

Keeping the United States’ competitive edge transporting soybeans abroad is a continuous priority of the Soy Transportation Coalition (STC) headed by Mike Steenhoek.

He updated stakeholders on STC priorities and the possibility of Congress and President Donald Trump’s administration passing an infrastructure bill that benefits agriculture.

STC priorities include:
• Finish current lock and dam projects and address maintenance backlogs.
• Improve ports and dredge the lower Mississippi River.
• Increase semi weight limits.
• Improve roads and bridges/create a sustainable source of funding. Index fuel tax to inflation.

“We need to promote an infrastructure that works for agriculture,” Steenhoek said. “Expect a strong infrastructure package soon. This resonates with the president.”

For permission to republish articles or to request high-res photos contact Dorothy Tate, dtate@iasoybeans.com.

©2017 Iowa Soybean Association On-Farm Network®. All rights reserved. On-Farm Network® is a registered trademark of the Iowa Soybean Association, Ankeny, IA.
Portions of some On-Farm Network trials are paid for in total or in part by the soybean checkoff.

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