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EU to require soybeans to be deforestation-free

EU mandate will affect all elevators selling soybeans to Europe, prompting additional verification platforms across the U.S.

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Soybeans Tree
Southern soybean producers selling soybeans to ADM may require enrollment in ADM’s Deforestation-Free Soybean Program.Farm Press

Starting December 24, 2024, the EU will require all imported soybeans to be deforestation-free and traceable to specific fields. Archer Daniels Midland (ADM) and the Farmers Business Network (FBN) have launched a Deforestation-Free Soybean Program to meet this requirement.

This EU mandate will affect all elevators selling soybeans to Europe, prompting additional verification platforms across the U.S.

For Southern soybean producers, selling soybeans to ADM may require enrollment in ADM’s Deforestation-Free Soybean Program via the FBN website/app by June 1, 2024, and the submission of field boundary data by July 15, 2024.

Enrollment is free, and by submitting field boundary data, FBN will use satellite imagery to verify that the soybeans were grown on land not deforested after December 31, 2020.

Table 1 lists the ADM locations across the U.S. participating in the Deforestation-Free Soybean Program, with southern locations in Arkansas, Kentucky, and Tennessee impacted.

Deforestation free

What constitutes not deforested? A field where more than 1.24 acres of trees were forested (including fence rows).

Early indications also suggest that some ADM locations will only accept deforestation-free soybeans, albeit at a premium. ADM is offering up to a $0.15/bushel premium if farmers enrolled in the program and an additional $0.05/bushel if enrolled by May 1, 2024, and field boundary data submitted by June 1, 2024. 

For more information on enrolling in the program, please visit ADM’s re:source website here and contact your local ADM elevator for specific requirements.

If you choose not to enroll in this program, selling to a different elevator could incur additional costs, particularly if your typical ADM site does not accept unenrolled soybeans. Understanding hauling costs and local basis when delivering to a different market is important, as it can impact fuel, labor, other operating costs, and marketing strategies.

Contract options may be limited, and local basis could be affected.

The push for non-deforested beans may affect local markets and grain marketing decisions in the future. Similar premiums will likely be offered for other sustainable agriculture efforts, such as carbon sequestration.

These changes provide opportunities but also challenge producers to adapt quickly to evolving market conditions.

Source: Southern Ag Today, a collaboration of economists from 13 Southern universities.

About the Author(s)

Jordan Shockley

Associate Extension Professor, University of Kentucky

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Jordan Shockley

Jordan Shockley
Associate Extension Professor

Professional Profile

Dr. Shockley was born and raised in a small rural town on the Eastern Shore of Maryland. He grew up working on traditional grain operations and various types of livestock operations from poultry to buffalo. He then moved to Kentucky to attend the University of Kentucky as an undergraduate. Spent 10 years in Lexington where he received both his Masters and Ph.D. in Agricultural Economics.  Then he went into the private sector where he was the Agricultural Economist for BP Biofuels North America.  He spent 4 years conducting strategy analyses, budgeting feedstock logistics, and analyzing any new decisions that were required for their corporate farming operations in Florida, Louisiana and Texas.  He also spent time abroad improving farming operations on sugarcane plantations in Brazil.  Currently, Dr. Shockley is an Associate Extension Professor and Farm Management Specialist within the Department of Agricultural Economics at the University of Kentucky.  His mission is to provide economic opportunities to Kentucky producers by conducting meaningful, applied research in Farm Management and Poultry Economics and effectively communicate those opportunities to positively influence the success of producers statewide. While Dr. Shockley has a majority Extension appointment, he also teaches an upper-level undergraduate class in Agricultural Financial Management.

Grant Gardner

Assistant Extension Professor, University of Kentucky

Dr. Grant Gardner was born and raised on a corn and soybean operation in southwestern Indiana. He received his B.S. in Agribusiness from Purdue University in 2017. He subsequently received his M.S. and Ph.D. in Agricultural Economics from the University of Nebraska-Lincoln and Kansas State University in 2019 and 2022, respectively.

Grant has experience working on both traditional grains and produce operations. He has a passion for aiding farm producers and the agricultural industry, which he attributes to his upbringing in a rural farm community. He has also held internships at various agricultural organizations, including DuPont Pioneer (Corteva), Frito Lay, and the USDA Economic Research Service.

His mission is to provide economic opportunities for Kentucky producers by conducting research related to commodity marketing, risk management, and farm management. He is building an extension program focused on commodity markets, crop insurance, and other applicable subject matter.

  

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