Soybean Market

Soybeans serve a variety of functions in the global food chain, ranging from use as edible oil to a source of protein for humans to use in livestock feed. Globally, approximately 87 per cent of all soybean production is crushed into soy meal and soy oil, with the remaining 13 per cent used for direct human consumption. From the soybean crushing process, roughly 80 per cent is extracted as soy meal for use in animal feed,1 and 20 per cent is extracted as oil for human consumption and as a biofuel feedstock (Product Board MVO, 2011). With such a large portion of soybeans produced for animal feed (approximately 70 per cent), demand growth for higher protein diets across the world is also having an important impact on demand and overall growth in soy production. In 2012 soybeans were produced on an estimated 2.2 per cent of the world’s agricultural land, up from 1.5 per cent in the year 2000 (Food and Agriculture Organization of the United Nations (FAO), 2013). Most of this growth (79 per cent) occurred in South America (FAO, 2013).2 Global production during the same year reached 253.1 million metric tons, with exports (whole beans only, not including meal and oil) worth US$53.2 billion (see Figure 12.1 and Table 12.1).

Rapid market expansion in developing countries leading to deforestation and biodiversity loss (notably South America), along with the commodity’s significant reliance on genetically modified organisms (GMOs), has given rise to a host of sustainability concerns. Soy production systems range from smallholder production in China to large-scale, capital-intensive farming in Brazil and the United States. The diversity of production systems in the soy sector presents significant challenges for global standards. Voluntary standards in the soy sector are also challenged by soy’s predominant role as an “intermediate” input in the food supply chain as livestock feed — leading to reduced opportunities for direct branding through consumer-facing labels. Notwithstanding, major international voluntary sustainability standards active in the sector and growing in popularity include the Danube Soya Initiative, Fairtrade, the Round Table on Responsible Soy (RTRS), ProTerra and Organic. The International Sustainability and Carbon Certification (ISCC)3 and the Roundtable on Sustainable Biomaterials (RSB) are other standards involved in the soybean industry (see Section 6).4 In total, 2.0 per cent of global production and 1.5 per cent of global exports were standard-compliant in 2012 (Organic, ProTerra and RTRS, as well as minimal volumes of Fairtrade; see Table 12.2). Brazil, China and Argentina were the largest standard-compliant producers; Figure 12.2 breaks this down by voluntary sustainability standard.

 

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1. [Soybeans produce more protein per hectare than any other plant, making them a popular choice for high-protein, compound animal feed. Soybeans are also favoured for the quality of their protein—they are one of the few “complete” non-animal proteins, meaning that they contain all essential amino acids (Dutch Soy Coalition AIDEnvironment, 2006; Product Board MVO, 2011). In animal feed, grains are the primary carbohydrate source, while oil meals are used as the primary protein source. In the global consumption of oil meals, soybeans accounted for 61 per cent in 2010 (Product Board MVO, 2011).] 2. [As measured by area harvested.] 3. [ISCC PLUS, which allows ISCC units to extend certification to food and feed products (ISCC, n.d.-b), was established in 2012 and will be covered in the next edition of the SSI Review.] 4. [RTRS also has a program geared toward the certification of soy as a biofuel feedstock in its RTRS standard, for compliance under the European Union’s Renewable Energy Directive.]