Environmental stewardship sets U.S. soy’s story apart, says USSEC

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Environmental stewardship sets U.S. soy’s story apart, says USSEC

As the global demand for animal protein continues to rise, so has the demand for soy as a feed ingredient. But while the oilseed can be a valuable source of nutrition for livestock, the environmental impacts of its production have increasingly become a source of concern, with topics like deforestation, land use change, and greenhouse gas emissions often making their way into the soy conversation.

consumers making a distinction between soy grown in North vs South America?

But as U.S. Soybean Export Council (USSEC) CEO Jim Sutter explained to Feedinfo, while there is some truth to these sustainability concerns, they are incorrectly being attributed to soy of all origins. In the following Industry Perspectives piece, he talks us through the U.S. soy sustainability story and the innovations adopted by soy farmers in the country to address environmental concerns. We also talk about where he is seeing growth opportunities for U.S. soy as the rising costs of inputs continue to put pressure on livestock producers. [Feedinfo] Can you start by explaining your “product”, that is, U.S. soy? How is it different from soy from other origins? [Jim Sutter] Among global soy origins, U.S. soy has an excellent amino acid content and amino acid profile, increased metabolizable energy content due to higher sugar levels, lower fibre content and improved amino acid digestibility, higher total phosphorus content, and greater uniformity of nutrients. It’s also important to note that U.S. soy is widely recognised as having the lowest carbon footprint versus soy of other origins. For example, a recent study conducted by the Global Feed LCA Institute (GFLI) identifies U.S. soybean meal as having the lowest kilogrammes of carbon dioxide equivalent (CO2-eq) per ton of broiler liveweight.

[Jim Sutter] It is concerning that soy as a valuable feed ingredient is being broadly labelled as an environmental risk. In the U.S. we have not been responsible for deforestation. In fact, according to the USDA National Resources Inventory, between 1982 and 2017, U.S. forest land increased 2.1 million hectares while cropland decreased 21.3 million hectares. Also, the U.S. Soy Sustainability Assurance Protocol (SSAP), which includes all of the U.S. laws to protect the country’s natural resources and biodiversity, is a verified aggregate approach, audited by third parties, that verifies sustainable soybean production on a national scale. SSAP certificates can be transferred to customers up to four times. The SSAP has received numerous third-party accreditations, including from FEFAC and the Sustainable Agriculture Initiative Platform’s Farm Sustainability Assessment. [Feedinfo] What are some of the innovations in soybean production that are encouraging sustainability? How is U.S. soy actively improving its sustainability story? [Jim Sutter] U.S. Soy has several sustainability goals, including using land more efficiently, reducing soil erosion, more efficient use of energy, and reducing greenhouse gases. U.S. soybean farmers 6,845 851,933 are some of the most sustainable in the world and their ongoing commitment to sustainability, according to the Field to Market National Indicators Report for 2021, have resulted in: • Increased land use efficiency by 48% • Improved energy use efficiency by 46% • Improved soil conservation by 34% • Increased soy production by 130% using roughly the same amount of land.

5,876,808 11,415,446 16,379,071 22,355,707 21,299,232 28,432,763

Verified Sustainable U.S. Soy Shipments for Marketing Years 2014-2022

45,000,000 40,605,328

40,000,000 35,000,000 30,000,000 M T 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 2014 2015 2016 2017 2018 2019 2020 2021 2022

[Feedinfo] Have concerns in Europe about the links between deforestation and soy proved to be a positive or negative development for U.S. soy? Are they hurting the image of soy as an ingredient, or are feed industry customers and the final

Innovations adopted by soybean farmers contributing toward these improvements include cover crops, conservation tillage, and precision production methods, including emerging cutting-edge applications like the use of artificial intelligence to enable targeted herbicide applications only on weeds.

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[Feedinfo] How big is the market for soy with particular sustainability attributes? Where are such principled buyers coming from (in terms of geography, sector, motivation...)? Is it fair to say that most buyers of soy are simply looking for the best deal available, and sustainability criteria are a distant second in terms of priorities?

[Jim Sutter] We are observing increasing interest in sourcing sustainable soybeans; more than half of U.S. soy exports have requests for SSAP certificates. Exports of verified sustainable U.S. soy were up 33% in 2022 versus 2021 representing 59% (approximately 40.6 MMT) of U.S. soy’s total exports (approximately 68.8 MMT) in market year (MY) 2021/22.

Historically, we have seen the most interest in sourcing sustainably from Europe. More recently, demand has been growing globally.

In addition to sustainability, price matters for soy customers. But not all soybeans are created equal. We are focused on demonstrating the total value of U.S. soy to our buyers. In fact, our online Soybean Value Calculator uses an individual’s data to help shed light on these origin-based differences. It enables crushers to calculate and compare the economic value of crushing soybeans from the U.S., Brazil and other origins. Based on origin-specific whole soybean characteristics, the calculator estimates the true, quality-adjusted whole soybean crush margin by accounting for co-product yields, soybean meal nutrient value, soybean oil refining costs, and plant efficiencies.

This tool helps bring together two existing calculators — the Nutrient Value Calculator and the Soybean Oil Value Calculator — and in doing so, paints a more wholistic picture of the value of soybeans.

Jim Sutter

[Feedinfo] Livestock and poultry producers in many parts of the world are losing money at the moment, as they struggle to cover the rising costs of inputs. Where are the growth opportunities for U.S. soy in such an environment?

[Jim Sutter] We are always concerned when we hear that customers are facing challenges, but we know that soybean meal from U.S. soybeans has advantages that can bring efficiency and value to livestock and poultry producers.

That said, aquaculture is a growing opportunity as it has immense potential to help meet the world’s nutrition and food security needs as an affordable and sustainable source of protein. The FAO forecasted global aquaculture production to increase 32% from 2018 to 2030 (from 179 million tons in 2018 to 204 million tons in 2030). We see growth opportunities here for U.S. soy as an excellent ingredient choice for aquafeed and a more sustainable option to wild caught fish feed.

[Feedinfo] The very low water levels of the Mississippi River, an important corridor for shipping U.S. soy, have affected the carrying capacity of this channel. Should international buyers be concerned about the ability of the U.S. to actually get its soy exports on the water in a timely manner? Are other modes of transportation, such as the rail or trucking industry, able to make up the slack caused by reductions in barge transport?

[Jim Sutter] Fortunately, the low water situation on the Mississippi has pretty much resolved itself. The variety of transportation modes, the quality of the transportation infrastructure, and the number of ports available in the U.S. result in the reliability of the U.S. soy supply even in the face of periodic challenges.

[Feedinfo] Over the last year, the feed ingredients markets have been dominated by news about drought and conflict. Do you think there are other developments, on either the supply or demand side, which are worth keeping an eye on?

[Jim Sutter] The onslaught of the four Cs (COVID, Climate, Conflict and Currency) simultaneously has not only wreaked havoc in the agriculture industry; the reverberations are felt in almost every aspect of every person’s day-to-day experience.

Despite these challenges, and according to the USDA, global production and consumption of soybeans have been steadily increasing year-over-year and are forecasted to continue in this market year.

As for other developments, the uncertainty and volatility of the energy market is an area to monitor closely along with the overall state of the global economy. We strongly believe that trade delivers solutions to these challenges. Finally, we are always optimistic about the future as we see growing demand for protein and other products from soybeans — we look forward to working with customers and potential customers of U.S. soy all around the world to help them take advantage of all the opportunities that U.S. soy can deliver.

Published in association with USSEC