USB: Soy a Multifaceted Solution

USB: Soy a Multifaceted Solution

Soy is a solution for food security and sustainable energy as the renewable diesel market grows. While some perceive the markets as a food versus fuel debate, the United Soybean Board says that’s not the case. Mac Marshall, USB and U.S. Soybean Export Council Vice President of Market Intelligence, says for soybeans, it’s all about food and fuel.

“The crush being used, 80 percent of that goes into meal, 20 percent into oil. Historically the value share has been concentrated in meal with oil comprising about a third of the value to crush, meal two-thirds. Now, with the surge in renewable diesel, we’ve seen oil prices come up, yes, but what that is doing is it’s fundamentally changing the parameters of crush. Long-term, that third share of oil, that’s crept up. This year, it’s moved up in the first quarter to just under 40 percent and now it’s basically close to parity. So, what that’s doing is now that oil is driving the crush, it’s producing an excess supply of meal.”

As a result, soy oil prices increased nearly 40 percent while meal prices declined about 20 percent, according to Marshall, who says traditionally, soy oil was an excess byproduct of soybean meal.

“Through soy checkoff investments in conjunction with the biodiesel industry, we found a utilization channel for that excess soy oil. There’s substantial potential for considerable demand growth for the biofuels complex. And as they become increasingly recognized as mainstream low carbon fuel options, we think that those demand signals will continue. Now, that increased demand for soy oil generates that increased meal supply as well, which is leading to that price weakness in the moment, and hopefully cost mitigation in the animal ag space.” 

Marshall says soy is a solution for both nourishing a global population as a complete plant protein in addition to supplying sustainable fuels and displacing petroleum.

“We’re addressing twin pillars of concern, two existential challenges that we have in the 21st century, one of food security, which our farmers have always worked towards in terms of growing a protein rich crop that enables people around the world to experience dietary enhancement, and now we’re playing a role in the energy space. Protein for food, lipids for energy, and soy is a solution for both of these challenges.” 

Keep up with the latest news from the United Soybean Board at unitedsoybean.org and Wednesday mornings at 10 a.m. Eastern on RFD-TV.