U.S. Soybean Export Council CEO Jim Sutter says U.S. soybean exports appear to be on a record-breaking pace for the 2021 marketing year, which ends Aug. 31. And that is not due to any one country’s purchases, but a strong, diversified demand base.
“It won’t be a record to any one particular country, which is something we take pride in is our diverse footprint of U.S. soy going out,” Sutter said while speaking to media during a press conference of the U.S. Soy Global Trade Exchange & Specialty Grains Conference held Aug. 24-26 in St. Louis.
To sustain and grow relationships between global food industry customers and the U.S. soybean value chain, USSEC and the Specialty Soya and Grains Alliance co-hosted over 1,000 global customers and industry representatives both in-person and virtually.
“Soybeans are the U.S. leading food and ag commodity export with 60% of U.S. soy being exported,” Sutter notes.
Sutter says global demand for soy remains strong, and even surprised many through the pandemic where some had anticipated a decline in global demand. Instead, there was good, strong demand in many markets around the world.
Last year’s soybean crop had a 500 million metric ton carryout. A good crop last year, combined with the carryout, has essentially all been shipped out to export destinations around the world. He says whether soybean producers see a new record for exports in 2022 remains dependent on this year’s crop. “Personally, I believe the demand would be there, but I don’t know how large the crop will be,” Sutter says.
In the latest agricultural trade outlook released Aug. 26, USDA projected soybean exports to increase by $3.3 billion from FY 2021 to a record $32.3 billion on higher prices, which more than offset lower projected volumes. "U.S. soybean volume exports are expected to decline from last year due to a combination of factors, including higher soybean prices, tight U.S. supplies, slowing growth in China’s global demand and increased competition from Brazil. Soybean meal exports are forecast at $5.7 billion, down by $200 million from FY 2021 on lower unit values. Soybean oil exports are forecast at nearly $1.0 billion, up nearly $200 million from FY 2021 as higher unit values offset lower volumes," the outlook states.
FY 2021 oilseed and product exports are forecast at $40.3 billion, down by $300 million from the May forecast, the outlook adds. Soybeans are forecast at $29 billion, up $100 million on higher unit values. Soybean volumes are slightly lower, though still a record. "Soybean meal exports remain at record value and volumes, despite a downward revision of $100 million to $5.9 billion on slightly lower volumes and unit values. Soybean oil exports are down $400 million to $800 million on lower volumes and unit values. High premiums for U.S. soybean oil have reduced export volumes 60% year-over-year to the lowest level in 10 years," USDA's Economic Research Service reports.
Monte Peterson, chairman of USSEC, board member of the American Soybean Association and soybean farmer in Valley City, N.D., says U.S. farmers are finally seeing demand creating new opportunities and increased prices on the Chicago Board of Trade. As demand grows, U.S. farmers will respond with increased production as they have a “tremendous ability to produce.”
Sutter notes that the international market has historically been driven by price. “But now we can see an evolution of being value-driven,” he says.
He adds that although U.S. soybeans may not be cheaper on a per ton basis, as buyers better understand the value from the protein and oil composition, they recognize an improved value for those soybeans.
The increased demand from China is the result of many years of work from soy industry groups to develop those industries that consume soy. Sutter says today those relationships are paying dividends with many strong relationships with those China industries.
“This gives us a roadmap in how we do work in other developing countries,” Sutter says. With the long tail that often occurs before trade takes place, many markets are following a similar game plan, he adds.
Bob Sinner, SSGA chairman and president of SB&B Foods, LLC and Identity Ag Processing, says the demand is “staggering” for non-GMO beans. Often three or four times a week he hears of offers he’s unable to fill. Demand is exceeding supply, and Sinner is encouraging buying customers in China to contract their supply and demand.
Sinner says many in the soy industry are in a similar debacle as other ag sectors dealing with frustrations on ocean container supplies to move products on a timely basis. Certain markets, such as those in the Southeast Asia market, rely on the U.S for timely delivery and do not carry inventories because of high humidity.
“The whole transition and reaction to changes of our container supply is challenging for us and frustrating for our customers,” Sinner says.