Soy is a versatile, valuable, and nutritionally beneficial legume, and its use is quite diverse, with 85% of the crop producing soybean oil and meal.
Soybean meal makes excellent animal feed for its protein content, while soybean oil is used for food consumption. They possess the highest protein content, around 40% of all plant protein ingredients, and are also known for their balanced amino acid profile and good digestibility.
Global soy production has soared to great heights over the past five decades. Currently, it is 13 times higher than it was during the 1960s.
Authors at academic institutions worldwide note that global soy production has doubled since 2000. In 2018, 398 million tons of soy were manufactured worldwide, accounting for 61% of oilseed production. Argentina, Brazil, and the United States contribute 81% of soybean production, manufacturing 15%, 32%, and 34%, respectively.
Soy seed blend and its main elements, oil, and meal, have led to an increase of around 350% in soy production since 1987. And this increase in soy production over the years is likely to continue even in the future.
Here are the top five trends that may affect the future of soy production:
1. Increase in the Demand for Soybean Meal as Animal Feed
The demand for global soy use has increased significantly as animal feed income levels, urbanization, and populations have expanded over the years.
Diets quickly shift from staples to diversified food products, including high-value agricultural items and meat. Experts believe this trend will continue to increase the demand for protein meals and feed grains, specifically those available from soybeans and vegetable oils in food and livestock manufacturing.
So, it is pretty likely that this will push the rate of global soy production in the future.
Soybean meal for animal feed is in great demand within Argentina, Brazil, Algeria, Indonesia, Vietnam, China, and European nations. The demand is so huge in Argentina and Brazil that soybean exporters cannot procure the volumes they want to ship.
Therefore, the manufacturers are putting in greater efforts to increase soy production in these countries to meet the global demand for soy.
2. China’s Huge Requirement for Soy
China’s trade and domestic policies have led to an increase in the country’s soybean import demand.
In 1995, the Chinese government developed a policy of 95% self-sufficiency for grains. Thus, they had the majority of their policies centered on this goal. For example, between 2008 and 2012, China increased price support for wheat by 45% and rice and corn by 88% and 54%, respectively. These rates were higher than those for soybeans at 41%, thus resulting in a drop of 18% in China’s domestic soy production.
Additionally, the country’s border policies also favor soy imports, which will continue to impact global soy production in the future.
While the country’s soybean import rate is likely to be slower than it was ten years ago, chances are that China’s demand for soy imports will be strong over the next decade, reaching around 109.5 million tons by 2025.
Moreover, with the USA cutting all connections and businesses with the country, other soy-producing leaders, like Brazil and Argentina, will have to meet the huge demand for soy in China.
3. European Soy Production is Unable to Meet Domestic Soy Demand
As per reports, the livestock population in the EU is quite stable, and soybean production in the EU countries has also increased over the last ten years. But meals made for livestock feed from EU soybeans currently amount to just 7% of the total demand.
Soybean demand in the EU is around 28 to 29 million tons, including in the United Kingdom, but soybeans manufactured domestically meet only 2 million tons of this demand. The rest of the soy demand in the EU is met by importing soy from Argentina and Brazil and a bit of it from Paraguay and North America. In such a situation and even in the foreseeable future, European countries will continue to import soy for animal feed, leading to an increase in global soy production.
4. Changes in Fuel Demand
The demand for alternative fuels, including renewable diesel, sustainable aviation fuel, and biodiesel, is probably increasing the demand for soybean oil. It can continue in vehicles with high horsepower engines though more and more consumers are moving to electric vehicles. The renewable and biodiesel industries will be capitalizing on this increase in demand for renewable fuels, and their dependency on soy biodiesel is likely to increase the global production of the crop.
5. Increase in the Demand for Protein
The protein market is diversifying at a breakneck pace because of the changes in consumer demand. People are using soy meal as a source of protein for animals, further creating a huge market for soy meal. The global demand for protein has also increased as economic security and population expand. Now, more consumers are looking for options for animal protein. And in this scenario, soy takes the leadership position among all protein sources.
Manufacturers continue to add new varieties to their soy production units because of this increase in the demand for soy protein. They are also working on understanding the different requirements for growing new varieties of soy to ensure the customers get what they are demanding.
Huge demand for soy and its by-products, like soy meal and oil, will drive continued growth in soy production over the next decade. The world’s soybean imports will also increase by 46.9 million tons, which is one of the greatest reasons behind an increase in soy production globally. An increase in the world population and the success of plant-based food products are some factors that may affect global soy production in the future.