Analysis of U.S. Soybean Processing Industry and Critical Challenges
This analysis delves into the U.S. soybean processing industry, highlighting the significant role played by NOPA members who operate processing plants across states. The members produce food, feed, and fuel from soybeans, emphasizing their crucial contributions to various sectors. Additionally, the report outlines critical challenges faced by the industry, such as promoting healthy crushing practices, fair regulations, market maintenance, biotechnology use, and more.
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Overview Overview & Assessment & Assessment of U.S. Soybean Processing Industry of U.S. Soybean Processing Industry 13 13th thS.E. Asia Agricultural Cooperators S.E. Asia Agricultural Cooperators Conference Conference Thomas Hammer, President National Oilseed Processors Association Cebu, Philippines August 1, 2016
NOPA Members NOPA Members 12 NOPA member companies Account for 96% of US soybean crush Operate 63 processing plants in 19 states, including 57 that process soybeans Crush 1.8 billion bushels, comprising over 46% of U.S. soybean farmers production in 2014/15 2
NOPA Membership NOPA Membership Ag Processing Inc. Archer Daniels Midland Company Bunge North America Cargill, Incorporated CHS Consolidated Grain and Barge Company Incobrasa Industries, Ltd. Louis Dreyfus Commodities Owensboro Grain Company Perdue Grain & Oilseed, LLC Riceland Foods, Inc. Zeeland Farm Soya 3
NOPAs Members Produce: NOPA s Members Produce: Food, Feed & Fuel Food, Feed & Fuel Soybean Meal: 97% used to feed poultry & livestock 3% used in food products like protein alternatives & soy milk Soybean Oil: 68% used for frying and baking food, as a vegetable oil & as an ingredient if foods like salad dressings & margarines 25% used for biodiesel and bioheat 7% is converted into industrial used like paints, plastics and cleaners Source: United Soybean Board Soybean Components Soybean Components 20% 80% Meal Oil 4
NOPAs Vision NOPA s Vision NOPA favors a market- based trading environment that encourages the efficient production of an abundant, safe, sustainable and high-quality supply of oilseeds and oilseeds products for domestic and world consumers of food, feed-ingredients and renewable fuels. 5
Critical Industry Challenges Critical Industry Challenges in a Tough Economy in a Tough Economy Promote Healthy Crushing Industry Tough but Fair Regulations Fair & Open Trading System Maintain/Expand Markets for Soybean Products Responsible Use of Biotechnology Promote Healthy Livestock Industry User-Friendly Operating Environment Expand Domestic & International Markets Promote Healthy Oilseed Producer Industry Market-Oriented Farm Programs Risk Management & Insurance Programs Adequate Funds for Research & Market Development 6
Many Difficult Issues Facing our Industry over Many Difficult Issues Facing our Industry over Next Several Years Next Several Years U.S. animal agriculture faces significant challenges Water & Air pollution issues from livestock manure Animal welfare issues related to certain management practices Animal identification & traceability systems disease & biosecurity Legal uncertainty with immigration & farm labor issues Perhaps, the biggest challenge facing animal agriculture will be to meet the increased food needs of a growing global population. Federal over-regulation of U.S. Manufacturing Industries Cost of all federal government regulations, including: Economic, Environmental, Food & Drug, Tax Compliance & Occupational Safety, Health & Homeland Security regulations) cost U.S. Manufacturers an estimated $2.028 trillion in 2012 -12% of U.S. GNP, or just less than $10,000 per employee per year. Many federal regulations should be subjected to a benefit-cost analysis to ensure that they are both fair & reasonable . 7
Many Difficult Challenges Facing our Industry Many Difficult Challenges Facing our Industry over Next Several Years (cont.) over Next Several Years (cont.) Demagoguery on International Trade by Politicians & Pundits Intellectual consensus does exist for mutually-beneficial free trade. But, all final 2016 presidential candidates, including Donald Trump, Hillary Clinton & Bernie Sanders have made global trade a lightening rod. While many politicians rail against unfair trade agreements & unlevel-playing fields on the election stump they do change their tune after taking the Presidential oath - every President since Franklin Roosevelt, regardless of political party, has embraced and even promoted trade liberalization. Absence of science-based conversations on agricultural biotechnology by the vocal minority of opponents. Must confront the lack of intellectual honesty over foods containing GMOs. A very strong messages can be delivered about food biotech. Over last 15 years, not one concern about food safety, environmental impact or the lack of either sound science and rigorous regulations can be substantiated. Biotech is key to ensuring a safe & abundant food supply to meet the needs of the world s growing population. 8
NOPA Members NOPA Members Monthly Crush Statistics Monthly Crush Statistics Soybean Crush CY2012-16 Soybean Meal Exports -CY2012-16 9
NOPA Soybean Crush NOPA Soybean Crush CY2012 CY2012- -2015 (000Bu.) 2015 (000Bu.) 170000 160000 150000 2012 140000 2013 130000 2014 2015 120000 2016 110000 100000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 10
NOPA NOPA Soybean Meal Exports Soybean Meal Exports CY2011 CY2011- - 2016 (tons) 2016 (tons) 1200000 1100000 1000000 900000 2012 800000 2013 700000 2014 600000 2015 500000 2016 400000 300000 200000 JAN FEB MARAPR MAY JUN JUL AUG SEP OCT NOV DEC 11
U.S. Soybean Meal: Crush & Disappearance U.S. Soybean Meal: Crush & Disappearance (1,000 short tons) (1,000 short tons) 50,000 45,000 40,000 35,000 30,000 Crush 25,000 Domestic 20,000 Exports 15,000 10,000 5,000 0 2014/15 (E) 2015/16 (F) 2016/17 (F) Source: USDA, World Agricultural Outlook Board July 6,2016 12
U.S. Animals Consumed over 30 Million M/T of Soybean Meal in 2015 13
U.S. Soymeal Usage by Livestock U.S. Soymeal Usage by Livestock (FY2015) (FY2015) 2%2% 7% POULTRY 16.3 Million Metric Tons SWINE 6.9 Million Metric Tons 12% BEEF 3.5 Million Metric Tons DAIRY 2.1 Million Metric Tons 54% PET FOOD 0.6 Million Metric Ton 23% OTHER FEED 0.67 Million Metric Tons TOTAL 30.2 Million Metric Tons Poultry Swine Beef Dairy Petfood Other Feed Source: Based on industry estimates, USB 2008 soymeal market study, USDA (NASS) 14
U.S. Meat & Poultry Exports U.S. Meat & Poultry Exports (2004/05 (2004/05 2026/27 est.) 2026/27 est.) Source: USB, October 2015 15
U.S. Soybean Meal Exported in Meat U.S. Soybean Meal Exported in Meat (2004/05 (2004/05 2026/27 est.) 2026/27 est.) Source: USB, October 2015 16
U.S Soybean Oil Production U.S Soybean Oil Production (2000 (2000- -2015) 2015) 12 10 8 MMT 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: WSDA, WAOB 17
U.S. Soybean Oil Exports U.S. Soybean Oil Exports 2000/01 2000/01 2014/15 and Forecast for 2015/16 and 2016/17 2014/15 and Forecast for 2015/16 and 2016/17 1.8 1.6 1.524 1.466 1.4 1.32 1.143 1.2 1.089 1.027 0.998 0.995 0.982 1 MMT 0.914 0.851 0.851 0.8 0.664 0.636 0.6 0.6 0.523 0.425 0.4 0.2 0 2000/012001/022002/032003/042004/052005/062006/072007/082008/092009/102010/112011/122012/132013/142014/152015/162016/17 18
U.S. Soybean Oil: Production & Disappearance U.S. Soybean Oil: Production & Disappearance (Million pounds) (Million pounds) 25,000 20,000 Production 15,000 Food 10,000 Biodiesel 5,000 Exports 0 2014/15 (E) 2015/16 (F) 2016/17 (F) Source: USDA, World Agricultural Outlook Board July 6, 2016 19
U.S. Vegetable Oil Consumption U.S. Vegetable Oil Consumption (2015) (2015) 8% 3% Feedstock Million M/T Soybean 8.9 8% Rapeseed/Canola 2.2 Corn 1.7 11% 56% Palm 1.2 Coconut 0.5 14% Other* 1.3 Total 15.7 *Other includes: palm kernel, peanut, sunflower, safflower and others Soybean Rapeseed/Canola Corn Palm Coconut Other Source: ERS, USDA 20
Exploding World Population Exploding World Population very good for Global Protein Industry good for Global Protein Industry very 21
Emerging Middle Class will be Engine Room for Emerging Middle Class will be Engine Room for Future Global Development Future Global Development Middle classes are rapidly expanding in emerging & developing countries. In richer countries, the middle class is shrinking & feels incapable of defending the standard of living that it has enjoyed for centuries. Today, both of these middle classes are awakening! Key question for the future: Which middle class will become the real agents of change ? Source: OECD Development Center 22
World Population Centers Changing World Population Centers Changing will provide new market opportunities new market opportunities will provide 23
Why is Precision Agriculture Important? Why is Precision Agriculture Important? The world s population is expected to grow -- while the ratio of arable land continues to decrease. The UN s FAO predicts global food production must double, and 70 % of world s additional food needs can be produced only with new and adapting agricultural technologies. Precision Agriculture, or as needed farming fits well with Hugh Hammond Bennett s* admonition to use every acre within its capability and treat it according to its needs. The U.S. soy value-chain is commitment to innovation, stewardship, and to meeting the global food challenges - in a safe & highly stainable manner -- now and into the future! *Bennett was a pioneer in field of soil conservation & founded the U.S. Soil Conservation Service. 24
S.E. Asia is Excellent Market for U.S. S.E. Asia is Excellent Market for U.S. As a block, it is the 2nd fastest growing economy in Asia after China - expanding by 300% since 2001 & exceeding the global growth average for the past 10 years. S.E. Asia's growing middle class, purchasing power & close trade ties - all point to greater U.S. -S.E. Asia benefits over time. Source: US-ASEAN Business Council 25
S.E. Asia is 3 S.E. Asia is 3rd rd Largest Economy in Largest Economy in Asia & the World s 7 Asia & the World s 7th th Largest Largest Has a growing consumer base of 626 million Has a combined GDP of $2.4 trillion Source: US-ASEAN Business Council 26
U.S. Agriculture Exports to S.E. Asia U.S. Agriculture Exports to S.E. Asia - - Up Sharply in Recent Years Sharply in Recent Years Up 27
S.E. Asia Markets for U.S. S.E. Asia Markets for U.S. Soymeal (MY2009/09 (MY2009/09- -2014/15 2014/15 M/T) M/T) Soymeal 2014/15 Soymeal 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 13,754 Cambodia 0 0 919 5,421 5,615 1,977 100,381 Indonesia 141,820 528,871 29,313 109,274 91,388 53,172 1,595 Malaysia 22,002 123,786 21,565 15,184 14,045 20,307 1,418,139 Philippines 493,350 957,514 863,033 1,159,491 1,085,222 1,258,255 803 Singapore 24 368 877 1,473 1,168 1,085 724,786 Thailand 116,639 203,937 11,949 28,314 29,649 379,703 449,952 Vietnam 126,004 474,442 36,828 66,725 275,039 350,371 2,709,410 Total 899,839 2,288,918 963,607 1,385,882 1,502,126 2,064,870 Source: U.S. Census Bureau 28
Top Ten Reasons to Buy Top Ten Reasons to Buy U.S. Soy U.S. Soy 1. Nutritional Value Proposition 2. Availability of Supply 3. Reliability of Product 4. Hedgeability 5. Transportation Diversity 6. Consistency of Product 7. Quality/Claims Process 8. Sustainable Production 9. Market-Driven Policies 10. US Soybean Industry Support 29
Sustainability = Opportunity Sustainability = Opportunity Do the right thing Do the right thing: This is closely aligned with NOPA s Vision Statement. Become the supplier of first choice Become the supplier of first choice: : Our domestic and foreign customers and their consumers are increasingly concerned about sustainability. Our members must aim to become the most trusted suppliers of sustainable soybean products. Grow our Grow our global business global business: : The growing importance of sustainability gives us opportunities to innovate, rethink how we do business & grow our business for soy and soy-based products in new directions. 30
U.S. Soy Processors work hard to protect & U.S. Soy Processors work hard to protect & promote our global supply chains! promote our global supply chains! U.S. soybeans, meal & oil are the mostsustainable in the world. U.S. laws & regulations governing farmers, grain handlers, processors & exporters are the most rigorous in the world. US soy & soy products are the best overall value for our global customers. 31
Questions or Comments Questions or Comments 32
Contact Information: Contact Information: National Oilseed Processors Association 1300 L Street, NW Suite 1020 Washington, DC 20005 USA Phone: 202.842.0463 Website: www.nopa.org 33
