Near Term Future of the U.S. Soybean and Oilseed Industry Was Focus of Soyatech's Soya & Oilseed Summit
Press Release -- Bar Harbor, Maine -- September 30, 2008 -- Tight commodity stocks, sustained higher price levels and a fight for commodity acreage are all currently hallmarks of the soybean and oilseed industry – and will continue to be for at least for the next few years, experts said last week at the Soya & Oilseed Summit 2008.PAID ADVERTISEMENT
Jim Sutter, vice president of Cargill’s North American Grain and Oilseed Supply Chain (and a past director of the United Soybean Board’s QUALISOY initiative) agreed that soybean oil has suffered in the U.S. food oils market and was unlikely to grow in the near future. However, he insisted, the marketplace needs a number of specific products – oils rich in omega 3s, low in saturated fats, and having increased oxidative stability – which could be filled by new, specialty trait soybean oils under development. The key to bringing these new products to market, though, will be close collaboration across the value chain. Everyone involved, from farmers to food makers, will need to see benefit for these new beans and oils to be successful.
Mr. Sutter called for investment in identity preservation (IP) infrastructure, as did Peter Golbitz, director of international business development for SunOpta Grains and Foods Group, in his explanation of the firm’s struggles to find an adequate supply of organic soybeans.
The misfortunes of soybeans in the food oils industry (and tight commodity stocks) have benefited other edible oils, especially palm oil, Ms. Frick said. As soybean oil’s market share declines, palm oil exports will continue to climb.
Soy production is also continuing to trend away from North America, with the southern hemisphere likely out-producing the northern hemisphere this year in cultivating the world’s most useful bean. Soybean crush also continues to expand rapidly in China and Argentina, according to Ms. Frick.
Philippe de Lapérouse, speaking about the state of the global crushing industry, concurred, saying that the practically insatiable demand for meal and oil in China will support this shift in crushing to destination markets.
A number of speakers addressed the growing demand in developing countries and the effect this is having on the global market. This trend was spotlighted in “How Will Trends in China and Other Developing Economies Affect Soy and Oilseed Supply and Demand?,” a presentation by Hiroshi Ito of Mitsui. “With the increase of demand for soybean meal consumed in the domestic market, China intends to increase soybean imports to meet demand,” Mr. Ito said.
Experts speaking at the Summit generally agreed that the world commodity market is moving into unprecedented – and perhaps irreversible – territory. Bill Lapp, president of Advanced Marketing Solutions and formerly vice president of economic research for ConAgra, said that commodity prices have reached a new plateau and will not be going back. “Enjoy your meals here [at the Summit],” he said in the closing panel discussion, because they are among the last cheap meals you will have.”
Another major theme of the Summit was the popularly championed (but nebulous) goal of sustainability in the soybean and oilseed industry. Tom Vilsack, who was governor of Iowa from 1998 to 2006, spoke about the role of climate change in agriculture – and the role for the agriculture industry in addressing climate change. His speech advocated the use of biofuels and urged industry participants not to cede the conversation about biofuels to their critics. Gale Buchanan, USDA’s Under Secretary for Research, Education and Economics, made similar points in his opening, keynote address to the Summit, insisting that soybean- and corn-based biofuels played a vital role in moving toward sustainable sources of energy.
“In actuality, we need to fundamentally transform the way we produce and use energy,” said Dr. Buchanan. “This means we must not only move away from fossil fuels but also dramatically improve energy efficiency and conservation. All of us – whether producers or consumers of agricultural products – need to be passionate about the business of creating this prosperous future.”
The audience of business and academic leaders was active in the conversation throughout and organizers reported a high degree of positive energy in feedback from attendees and speakers as the event concluded.
Soyatech LLC, the primary organizer of the Soya & Oilseed Summit series, has indicated that next year’s Summit will be held in Minneapolis, Minnesota on October 7-9, 2009.
-Reporting by Soyatech staff
(c) 2008 Soyatech LLC
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