Large city in South America

Bogota, Colombia (Photo: Iowa Soybean Association / Aaron Putze).

‘U.S. Soy needs you more than ever,’ ag consultant tells buyers in Bogota

June 20, 2024 | Aaron Putze, APR

U.S. agriculture consultant and soybean crush expert Gordon Denny is known for getting right to the point. And he did just that when speaking to more than 200 soybean customers June 13 in Colombia.

“U.S. soy needs you now more than ever,” he said immediately upon taking the stage at U.S. Soybean Export Council’s Americas Agricultural Cooperators Conference held in Bogota, Colombia’s capital city of 8-plus million. “There’s never been more need, demand and opportunity for soy than today.

“That’s exciting and means good things for you as buyers and processors of U.S. soy.”

Denny, general manager of Gordon Denny, LLC based in Brighton, Colo., said the global optimism for U.S. soy is driven by the dramatic growth in domestic processing. Two new soy crush plants came online in 2023; five more are expected in 2024 and two more in 2025.

The construction boon was driven by increased demand for renewable diesel (RD) and sustainable aviation fuel (SAF), he said. Livestock and fish producers are the net beneficiaries as annual soybean meal output increases by 10 million metric tons (mmt).

“We’ll go from 48 to 58 mmt,” said Denny. “That’s a 20% increase and it can’t all stay in the U.S.”

Having nearly 70 U.S. crush facilities online by 2026 means more soybean meal output and lower soybean meal prices. This in turn will drive down the price of protein, meaning lower feed prices, perhaps as much as 8%, or $24/ton.

“In essence, renewable diesel is subsidizing soybean meal prices,” said Denny.

There are 64 U.S. crush plants operating with a maximum procession capacity of 210,000 metric tons of soy per day. America’s top-four soybean crushers – ADM, Cargill, AGP and Bunge – account for nearly 75% of that volume.

Plenty of supply

A World Agricultural Supply and Demand Estimates report released June 12 underscored the fact that crushers have plenty of soybeans to work with, increasing domestic U.S. carryout by 10 million bushels to 455 million.

“If you’re a processor, you will not run out soybeans this year, or next or ever,” Denny said.

In addition to increasing processing volumes, the U.S. soybean industry is mobilizing the capacity and geographical footprint of its export terminals to serve export markets more effectively. Bulk export facilities are increasing capacity as are Gulf terminals.

“The ABCs realize we’re going to have a lot of extra soybean meal that will need to be exported,” he said, a reference to the increased crushing capacity of ADM, AGP, Bunge and Cargill, among others.

The expansion of U.S. domestic soybean processing is creating new benefits for consumers of U.S. soy. Combining broilers, layers and turkey consumption, nearly 65% of U.S. soybean meal production is fed to feathers while 17% is fed to pork and 11% to dairy.

Greater volumes of soybean meal produced and exported also deliver benefits to the bottom line of U.S. soybean farmers. Two-thirds of the value of a bushel of soybeans is in the meal, the remaining in the oil.

About a year ago, it was 50-50 and not long before that, oil was outpacing the value of the meal.

No surprises

The value proposition isn’t surprising as U.S. soybean meal is the gold standard as a feed ingredient for poultry, layers, swine, dairy, fish and shrimp.

Denny said U.S. soybean meal includes more crude protein than Argentina, more lysine than Brazil, higher metabolizable energy for poultry and higher net energy for pigs.

“Then there’s less neutral detergent fiber and raffinose and lowest heat damage indicator and higher consistency (grind, toasting and moisture).

“These things matter and the results can be quantified,” Denny added.

Other advantages for livestock, poultry and aqua producers for choosing U.S. soy include a commodity lower in moisture, field damage, foreign matter and heat issues.

Denny said U.S. soy offers a $13/metric ton advantage for U.S. meal based just on the cooler weather in which its harvested, not even taking into account less damage and better protein.

“Never buy for just price. Price plus quality equals value,” he said.

Additional information shared by Denny:

Where do U.S. soybeans go?

  • Whole soybeans – 55% domestic crush; 41% whole soybeans get exported. “The U.S. will never run out of whole soybeans for export.”
  • Soybean oil – 50% food and feed domestic; 49% blended into biofuels for the 23/24 crop yield. Getting 11.8 lbs. of oil/bushel.
  • Soybean meal: 70% fed domestically; 30% exported

Over the next 2-3 years, Denny expects decreases in:

  • % U.S. whole soybeans exported
  • Price of protein in all forms
  • U.S. processor margins
  • Seasonal export variability
  • Argentia crush and export volumes
  • World crush rationalization
  • Inclusion of DDGs and synthetic amino acids
  • Exports of other U.S. commodities
  • Margins/demand for alternative /lab-grown meat

Simultaneously, Denny expects increased in:

  • U.S. soybean meal exports
  • U.S. soybean acres
  • U.S. soybean yields and production
  • Exports of U.S. chicken and pork
  • Soybean meal inclusion rates in feed
  • China soybean imports from Brazil
  • Food security/hunger reduction
  • Desire for higher quality U.S. soybean meal
  • Political interference in economics
  • Value of palm and other oil crops