Protein plight: Brazil steals US soybean market share in China
CHICAGO: US soybean growers are losing market share in the allimportant China market because the race to grow higher-yielding crops has robbed their most prized nutrient: protein.
Declining protein levels make soybeans less valuable to the US$400 billion industry that produces feed for cattle, pigs, chickens and fish.
And the problem is a key factor driving soybean buyers from the US to Brazil, where warmer weather helps offset the impact of higher crop yields on protein levels.
A decade ago, the US supplied 38 per cent of soybeans to China, the world’s top importer, compared to 34 per cent from Brazil.
Now, Brazil supplies 57 per cent of Chinese imports compared to 31 from the US, according to China’s General Administration of Customs.
Soybeans are by far the most valuable US agricultural export, with US$22.8 billion in shipments in 2016.
Declining protein levels and market share pose another vexing problem for soy farmers already reeling from a global grains glut and years of depressed prices.
The US soybean industry also faces rising competition from a growing number of synthetic and organic alternative feeds that provide more protein for less money.
These are troubling trends for the US$41 billion US soybean sector, but the industry’s response has yet to take on much urgency.
That’s because the erosion of protein levels has come over many years, and many industry players still have short-term economic incentives to prioritize higher yields over higher protein.
Protein levels have fallen as biotechnology and other breeding advances have pushed yield per acre to record highs, which dilutes protein content.
But US farmers can still make more money producing higher volumes of lower-protein crops because they only get an additional three to five cents a bushel for higher-protein beans.
Over the long term, however, falling protein levels could have dire consequences for the US industry as a whole – especially in China, which buys two-thirds of all soybeans traded in the world market to feed its vast livestock operations. — Reuters