Shifting trade dynamics, increasing demand for oil and world sustainability issues are hefty topics impacting the soy world. As U.S. Soy looks to build on its post-pandemic foundation, three organizations are ready for the next steps.
Recently, the CEOs from the United Soybean Board, U.S. Soybean Export Council and American Soybean Association participated in a roundtable to discuss the most critical issues impacting U.S. soy. The discussion ranged from the importance of sustainability, the need for investment in infrastructure and disruptors looming on the horizon.
Striving for Sustainability
“Sustainability is an issue, like many other issues, that doesn’t ride along organizational lines or allowances,” Polly Ruhland, the chief executive officer of USB, says. “There are parts that each of our organizations can address when it comes to sustainability.”
The organizations are working to elevate sustainability and the work that farmers are doing here in the U.S. Each of the panelists noted that sustainability sets U.S. soybean farmers apart from other international sellers.
Sustainability and transparency are rising demands in food and feed marketing. “You can’t have a sustainability claim that is built on quicksand,” Jim Sutter, CEO of USSEC, says, “because people are going to check and verify. We have to have an extremely strong foundation. We need to have a brick house in what we are building. I think we have that.”
The Soy Sustainability Assurance Protocol (SSAP) verifies sustainable soybean production at a national scale using a certified aggregate approach audited by third parties. Since the inception, cumulative SSAP verified exports exceeded 100 million metric tons in 2021.
“The work of USB and USSEC to document the sustainability of soybean production provides the scientific underpinning and the best way to communicate it,” Stephen Censky, CEO of ASA, says. “I think that’s where the work of both USB and USSEC is important. Then, as a policy organization, we can take that work and communicate it to lawmakers. If we did not have such good information coming from both USB and USSEC, we couldn’t do that.”
For U.S. soybean farmers, sharing the sustainable production and conservation decisions they make starts with connectivity on the farm.
“If you are interested in sustainability, then you are interested in connectivity and infrastructure,” Ruhland says. “Because the way farmers get more sustainable is to gather data, analyze data and make more sustainable decisions about their land with the data they can gather. If we can’t have that connectivity in the field and we can’t have that high-speed data in the office to analyze that data and make real-time decisions, then our sustainability efforts are hampered.”
Invested in Infrastructure
Infrastructure, including broadband, has long-lasting impacts on soy growers. According to the panelists, infrastructure modernization or the need to invest in new technologies can impact the way farmers do business both domestically and internationally.
“We talk about the advantages of U.S. soy, and one of the key advantages is the reliability of infrastructure,” Sutter says. “Our competitors are not standing still. The U.S. has had an advantage and, hopefully, the infrastructure bill will let us add to that advantage.”
Recently, Brazil has generated over $200 billion for ports, railroad infrastructure and paving projects.
“BR-163 was a dirt road that would be impassable for weeks because of the weather, but it is completely paved now,” Censky says.
Betting on Biofuels
The growth of the biofuels market here in the U.S. and internationally impacts the demand for soybeans. As a result, oil prices have surged, with the biofuels market predicted to grow by nearly 20% between 2019 and 2026, according to the International Energy Agency.
“I’m excited about the possibilities for renewable diesel, and overall, that has to be good for our industry,” Censky says. “But, at the same time, a word of caution is to not give up our existing markets. Let’s not forget that the traditional petroleum companies have not always been favorable toward biofuels.”
The industry has worked through disruptions before. China’s demand for soybeans on the world stage was seen as a disruptor in the past. According to the CEOs, the turmoil in trade several years ago was a good reminder about market diversification.
“I think that it is a reminder of the need to diversify usage and markets globally,” Sutter says.
According to Sutter, the demand for soybean oil creates an opportunity to grow the soybean meal market on the value of the energy content, amino acid concentration and quality.
“We are looking at it as an opportunity to grow the meal market out of the U.S.,” he says. “Particularly, we are looking at Southeast Asia, where we think that meal has a good place to go. They are traditionally meal-importing countries, and we think it will give us an opportunity to grow that.”
Monitoring the Markets
Market intelligence, or gathering information and analyzing data through market research, will be a priority for the groups moving forward.
“It’s critical that we do better than what we have done in understanding what disruptions could happen and modeling the what-ifs,” says Ruhland. “When you have this kind of trust between these organizations and the farmers that run them, that’s when you make progress very, very quickly.”