October 30, 2017

Lower protein in US soymeal may prompt spikes in feed, meat prices

Prices of animal feed and meat may likely rise as US processors reduce the amount of protein in soymeal,  Reuters reported.

The uptrend is attributed to a strained supply of protein in this year's US soybean crop.

This summer's adverse weather is identified by experts as a possible cause of the declination of protein in soybean, leading to worries that soymeal made at crushing facilities will lack in protein and other key nutrients.

Such facilities can adjust processing to maximise protein yields while animal feeders can modify rations  to include other feeds and supplements. However, with the latest development, consumer could soon be impacted by higher poultry and pork prices instigated by increased production costs.

"The pig doesn't care if it's a low-protein crop or not," said Charles Hurburgh, professor of agricultural engineering at Iowa State University. "The pig just wants the protein so the nutritionist has to adjust rations. They will probably end up with a little bit more expensive rations."

Hurburgh, who is collecting samples for the United Soybean Board's annual soy quality survey, added that early data reveals the 34-34.5% averaging of protein for US soy. The range represents a drop from the previous percentage of 35%, translating to lower-protein soymeal. 

According to traders, high-protein soymeal, usually sold with 47.5-48% protein, is currently offered at 46.5% or 47%.

Said Deb Seidel, spokeswoman for Bunge North America: "In general, the industry is seeing lower protein content in new crop soybeans. Bunge, along with most other operators, have adjusted protein specs (in soymeal) to ensure we are accurately reflecting the product we sell to our customers."

Following the processing and mixing into feed rations of more freshly harvested beans, livestock and poultry are anticipated to be affected by late 2017 or early 2018.

"A diet manufactured at a feed mill where lower crude protein bean meal is being used, that's going to be more expensive," said Omarh Mendoza, associate director of nutrition at The Maschhoffs, the fourth-largest US hog producer.

- Reuters