News: Greater Europe
For more than two decades, the Polish Grain & Feed Chamber has been one of the most influential industry associations in Poland. The organization is also very active in Europe through its membership in the European Feed Industry Federation (FEFAC), the European grain industry lobby group (COCERAL), and, most recently, the European Commodities Exchange. The U.S. Soy industry has long worked with the Chamber on many issues, including channeling professional know-how to the Polish grain, feed, livestock and food industries.
On April 21, when the Chamber held its general assembly of members in Warsaw, USSEC brought Beat Spaeth, EuropaBio, director of Green Biotechnology, to speak to this audience on “The Present and Future of Biotechnology in Global & European Agriculture and Food Chain.” Mr. Spaeth explained the massive adoption of biotech crops in the world: in 2015, 18 million farmers in 28 countries planted biotech crops on 179.7 million hectares (approximately 444 million acres), which is just a marginal decline since 2014, despite furious attacks from opponents. “Could 18 million farmers be wrong about this new technology?” the speaker asked the Polish audience.
Speaking about the benefits that biotech crops and their derivatives offer to farmers and consumers, Mr. Spaeth highlighted the sustainability aspect of green biotechnology: production of more food on less land, reduced inputs use, reduced soil erosion, and lower CO2 emissions. The events that are in the public research institutions’ and the biotech industry’s pipeline will bring more benefits, such as resistance to new diseases, better insect and weed control, tolerance of drought and salty conditions, higher nitrogen use efficiency, better livestock feed efficiency and improved biofuel traits. The speaker stressed the consumer benefits, especially more healthy edible oils and enhanced nutritional value.
Commenting on the attitude to green biotechnology and regulatory practices in the EU, Mr. Spaeth pointed to the common hypocrisy at both Brussels’ and member states’ levels, namely stated support to innovation in agriculture and practiced expelling innovation by delaying authorization for imports, blocking applications for cultivation, and the sharp reduction of field trials. These actions cause the commercial biotech pipelines to focus not on Europe, but on other continents.
USSEC Technical Director – Northeast Europe Jerzy W. Kosieradzki thanked the Polish professional audience and the leaders of the Polish Grain & Feed Chamber for taking the lead in the local battle for extension of the moratorium on implementation of the Polish legal ban on GM feeds that was partially successful. The date of the ban’s implementation was set for January 1, 2019, not 2021, as the industry originally proposed.
In an effort to assist continuous knowledge and skills improvement for U.S. Soy customers from the European countries of Russia, Poland, Romania, Hungary, Bulgaria, and Turkey, USSEC organized an on-site training at two relevant integrated companies, Copiso Coop and DAGU Feed Mill, located near Madrid, Spain.
USSEC consultant Dr. Mateos Gonzalo coordinated the event, which offered participants a broader view of the manufacturing, quality standards, and good practices in Spain during the last week of March. Spain is the second largest feed compound producer in the EU 27, with an annual production of 31 million tons of compound feed and is also one of the top U.S. Soy customers in the region.
The on-site feed mill training has important merits, including unique learning opportunities for both participants and hosts. All participants had the chance to interact at a higher level and bring theoretical discussions and topics to commercial production situations, making topics of interest more tangible and easier to understand.
The first company visited by the team of USSEC trainees was Copiso Feed Mill in Valcobra, part of a fast-growing cooperative from the Soria area in Spain. Copiso offers fertilizers, grains drying, veterinary and transportation services, compound feed and other products to its members, as well as warehousing, swine insemination centers, and related services. The cooperative was founded 50 years ago and its organizational structure is an excellent model for the growing Eastern European agriculture.
DAGU Feed Mill was the second integrator to open its gates for the USSEC training. DAGU is a leader in the egg sector and one of the first operators in the egg export trade from Spain. The company has acquired experience over the last 50 years working in the poultry-farming sector, always maintaining a leadership position. The company has modern equipment and technologies in all production process points: raw materials reception, feed manufacturing, egg production, grading, packing, and processing. All the processes at DAGU, for both the production and marketing of the eggs and egg products are strictly controlled by their own laboratory, which has state of the art technology and complies with the strictest standards of control, thus offering our customers a top quality product.
The field visits at the Copiso Cooperative and Dagu Feed Mills were perfect opportunities for the participants to visit companies to exchange information about the current practices in raw materials quality control systems and feed additives usage in different European countries. Besides learning about the latest advances in raw materials quality, students had the opportunity to understand the Spanish experience in feed quality control under EU laws and regulations and near future challenges in feed additives use.
Learning from the experience of integrated companies from the Soria and Guadalajara areas was highly interesting. Spain is perhaps one of the most noteworthy markets from the point of view of industry organization. The business model of cooperatives and integrated companies has some particularities in Spain: poultry and pork meat producers are acting more like partners with feed manufacturers, meat processing, marketing, and distributors. Animal farmers receive all the feed, drugs, and vet services from the integrator, based on prices agreed between the two parties. This gives the freedom to feed manufacturers to adapt the feed formulation based on the raw materials availability and price in the market.
With eight ports across the Iberian Peninsula, Spain has significant advantages in importing feed ingredients and exporting meat. The country’s strategic location gives the feed and livestock industries the ability to reach any market from Europe and Asia.
During the last week of March, USSEC held a feed additives training course in Madrid, Spain for Central and Eastern European, Russian, and Turkish customers. The classes were designed to develop skills and upgrade knowledge of young industry professionals from six different countries, all growing in the feed and livestock sectors and in the consumption of soybean meal.
The three-day program, coordinated by USSEC consultant Dr. Gonzalo Mateos of the Universidad Politécnica de Madrid, focused on feed additives as related to the efficient production of improved animal products, animal health, and a better environment. Participants learned the latest in research findings for energy and protein ingredients, the proper use of feed additives, and how to stay at the forefront of new nutritional developments for the feed and livestock industries.
The evaluation of crystalline amino acids in animal feeding was another important topic for the participants, learning about their nutritive value, quality control methods, and future perspectives regarding commercial availability of amino acids for the feed industry. Dr. Mateos discussed the advantages of feeding animals with vegetable protein sources, which are cheaper and safer than animal protein diets and how to use feed additives to get better animal performances.
Besides learning about the latest advances in feed additives, participants had the opportunity to understand the Spanish experience in the field of feed safety under EU laws and regulations.
The training classes continued with a one-day visit to the largest animal trade show, which takes place every two years in the Aragon province. On March 30, the entire USSEC training delegation visited the 13th FIGAN 2017 animal production tradeshow in Zaragoza, Spain. The fair has more than 70,000 visitors, an increase of 10 percent compared to 2015 with 40 nationalities present at the event.
Dr. Mateos and Dr. Juan Acedo escorted the USSEC delegation, which had the chance to learn the latest about various feed manufacturing, additives, and animal farming technologies. The course director and USSEC consultants escorting the group facilitated individual contacts and discussions between members of the USSEC delegation and feed additives and feed manufacturing technology suppliers.
The training achieved its goals to educate customers in recent advances in feed additives. All the participants had a clear understanding about how more can be squeezed out from soybean meal and grains by the proper use of feed additives for improving the nutritive utilization by non-ruminant animals.
Last week, USSEC organized an innovative protein purchasing seminar in Madrid, Spain. Major southern European soy importers, traders, and end users met with the objective of talking about issues related to the soy market and other protein markets. Seminar subjects included: production, logistics, markets, trade, industry, flows, price building, sustainability, GMOs, customer preferences, quality differentiation in relation with production origins, and risk management, among others.
This meeting was organized for the Spanish and Portuguese industry. USSEC will hold similar seminars in other parts of Europe, building on the success in the Southern Europe market.
The session took place over a day and a half. Course attendees included feed industry representatives, soy crushers, and importers. In total, 80 people representing nearly 100 percent of the industry participated, including representatives from the main feed and meat industry such as Vall Company, Nutreco, Coren, Coorporación Agropecuaria, the Guissona, and many more. Soy crushers such as Bunge and Cargill, Sovena and all importers, Cofco, Gavilon, Nidera, Dreyfus also attended. The Spanish soy crush industry is one of the three biggest in the European Union.
USSEC consultants Dr. Gonzalo G. Mateos, Dr. Jan Van Eys, and Lola Herrera spoke about the quality and sustainability of U.S. Soy, U.S. Soy farming, and soy value by production origin. Rory Deverell and Thomas Deevy from FCStone talked about the markets and risk management, while Bunge’s Javier Masso spoke about the import and soy crush industry in Europe, including Spain and Portugal. Vasco Tamagnini from Sovena gave a presentation about the crush of other proteins, and Pedro Ruiz from Altura discussed the exchange rate between the U.S. dollar and the euro.
Rounding out the discussion on proteins, several EU soy end users of soybean meal including the purchasing manager of Vall Companys, the main pork producer in Europe, Sebastia Arnau and a representative of French soy buyers Antoine Rebouding from Feed Alliance participated. Also staff form Bunge and Cargill in Geneva presented their Risk Management tools.
During this course, USSEC demonstrated the importance of quality, quality by origin, and the U.S. Soy Advantage to the Spanish and Portuguese industry. Attendees were also introduced to the sustainability of U.S. Soy, which is critical as the importance of sustainability in Southern Europe continues to grow.
USSEC, in collaboration with Assalzoo (Italian Feed Association) and FCStone, recently held a risk management course in Verona, Italy.
25 people representing the Italian feed industry and soy crushers and importers attended the course, representing more than 70 percent of the industry. Participants from the main feed and meat production industry included the Veronesi Group and the Amadori and Martini Group. Italy’s feed industry produces nearly 13 millions tons annually, plus feed on farm, importing 2.2 million tons of soybean meal; the crush industry represents 2 million tons.
The objective of the course was to improve knowledge of risk management in the feed industry related to raw material used. Jaime Nolan Miralles and Rory Deverell, from FCStone Ireland, gave several presentations and provided tools for participants to apply in their businesses to better control their risk.
For these types of events, USSEC stresses the quality and sustainability of U.S. Soy. Brent Babb, USSEC Regional Director – European Union (EU) / Middle East – North Africa (MENA) discussed “The Sustainability of U.S. Soy” and Lola Herrera, USSEC South Europe consultant, presented “USSEC’s Compromise with the Italian Market” that explained USSEC’s projects in Italy and “Soybean Meal Replacement from Different Origins, Taking Quality into Account,” to highlight the added value of U.S. Soy.
USSEC hosted the Advanced Poultry Nutrition & Feed Manufacturing Seminar in Warsaw, Poland on March 20 and 21 for top Polish professionals involved in commercial poultry feed manufacturing. The majority of the audience represented major feed compounders operating in Poland, including Cargill, DeHeus, Wipasz, Golpasz, Piast, Ekoplon, and Tasomix, along with some smaller, but quality-oriented companies such as Neorol, Nutripol, Lira, ETOS, and Pasze BIOS.
Because the event was jointly organized by USSEC with the Polish Grain & Feed Chamber, Jerzy W. Kosieradzki, USSEC Technical Director – Northeast Europe, and Anna Zymerman, the Chamber’s Secretary General, welcomed the audience. Mr. Kosieradzki also introduced the participants to USSEC, its goals, and its activities.
A trio of renowned scientists and commercial specialists from Spain and Norway shared their knowledge: Dr. Gonzalo Mateos, professor of animal science at the University of Madrid; Dr. Birger Svihus, University of Life Sciences in Oslo, Norway; and Mr. Juan Acedo-Rico, Acedo & Associates, Spain.
Dr. Mateos spoke about the relationship between soybean meal’s physical properties, anti-nutritional factors, and their effects on birds’ performance. He later explained the factors affecting egg production in layers and how to influence broiler production with nutritional changes.
Dr. Svihus presented ways to optimize crop and gizzard functions through structural components and feeding management, later moving to influencing feed efficiency, litter quality, and gut health to eventually focus on how to adjust feed processing for maximum pellet durability.
Mr. Acedo-Rico added the engineering side of the picture by explaining efficient poultry feed manufacturing and the importance of diet meal conditioning for hygienic feed production, as well as grinding strategies at the feed mill for achieving adequate particle size.
After two days of lectures and discussions, the Polish audience was highly appreciative of the professional merit of the event and cutting edge know-how support provided to them by U.S. Soy.
USSEC attended the National Conference of the Romanian Feed Manufacturers Association, hosted by Smithfield, on March 16 and 17 in Timisoara City, Romania. Over 80 industry delegates and 10 foreign speakers from European and U.S. organizations participated in this event.
The USSEC delegation included American Soybean Association (ASA) vice president Bret Davis and United Soybean Board (USB) director David Iverson, and USSEC Regional Director – European Union (EU) / Middle East – North Africa (MENA) Brent Babb who traveled to Romania with the goal to increase awareness of U.S. Soy and promote sustainable U.S. Soy among members of the Romanian Feed Manufacturer Association.
After a brief introduction of USSEC provided by Mr. Babb, Mr. Davis spoke on “U.S. Soybeans’ Sustainability and Biotechnology” and Mr. Iverson discussed “U.S. Soy Outlook for 2017.” Both presentations were well-received by the audience and fit the conference agenda entitled “Security, Safety, and Sustainability for Increasing Competitiveness of the Feed Industry.”
In addition to the sustainability presentations made by the keynote speakers from USSEC, DSM, and Smithfield Romania, the audience was exposed to presentations approaching new sustainable feed products including extruded linseed or feed additives such as soy chelates. The event also provided the delegates with insight on the latest trends in raw materials, feed additives, and feed manufacturing, besides creating ample opportunities for feed companies and suppliers to interact and network.
USSEC Animal Utilization Consultant – Romania Dr. Iani Chihaia, acting as a facilitator for this event stated, “The solid presence and support of USSEC confirms our belief that the local feed and livestock industries will expand in the near future. We hope that the Feed Association will continue to serve as a platform for the industry players that allows our members to grow and implement the latest standards in safe and sustainable production.”
During the second day of the event, participants were invited to tour Smithfield’s Ferme Feed Mill, located in Vinga, Arad County. Over 60 people had the chance to take a tour to the largest and uniquely American-designed and -engineered feed mill in the country. The plant is an example of a feed manufacturer being able to produce different feeds under the latest safe and sustainable feed industry standards.
According to an ANFNC press release about the event, the conference in Timisoara was by far the best meeting of the feed association since its inception. Romanian representatives who attended and listened to the presentations were truly impressed with Smithfield’s overall organization, the quality of speakers and presentations, and the networking opportunities.
As for the foreign speakers and sponsors of the conference, the event allowed them to get a better understanding of the Romanian feed and livestock actual reality and potential for progress and expansion. It clearly showed the opportunities and potential that exists in this particular market for growth in livestock production and, consequently, the use of sustainable feed additives and manufacturing technologies, with U.S. Soy being one of the key products in this regard. Even though Romania is not one of the largest soy markets in Europe, its livestock and feed industries are growing and set a good example for other Eastern European countries to develop their industries.
Having USSEC delegates participating and giving speeches at the conference and offering support over the past several years for the development of ANFNC, as a strong professional organization and professional forum, is probably one of the most important success stories on how U.S. Soy farmers are committed to building relationships with European industry professionals and end users. USSEC will continue its promotional efforts to accompany the growth of this market and to position U.S. products in this market.
American Soybean Association (ASA) vice president Bret Davis and United Soybean Board (USB) director David Iverson traveled to Romania during the third week of March to visit with key soy importers and end users, including Bunge Romania, Banvit Romania, Combial – Bona Avis, Fatrom Swine Integration, and Smithfield Ferme. The delegation also visited the Animal Nutrition Research Institute (IBNA) to meet with shareholders, executives, and technical staff from customer companies. USSEC Regional Director European Union (EU) / Middle East-North Africa (MENA) Brent Babb joined the delegation and USSEC Animal Utilization Consultant – Romania Dr. Iani Chihaia escorted the group for the field visits.
The main goal of the grower leaders’ mission was to convey a strong message on the U.S. Soy Advantage and demonstrate the commitment of U.S. Soy farmers to the growing feed and livestock industries in Romania.
The week began with an informative meeting with Monica Dobrescu, Ag Specialist at Foreign Agricultural Service (FAS) – Bucharest. Currently, Romania is the second largest EU 27 producer of maize and the top producers of sunflower seeds. With fertile soils and access to technologies, the country is producing annually over 20,000 metric tons (MT) of these products, but still exporting over 60 percent of the cereals and importing about half of the pork meat. The pork meat deficit and growing demand for animal products from the domestic and export markets has attracted several local and foreign investments (U.S., China, Denmark Holland, Turkey, Greece, and Switzerland) in the swine, poultry, and beef industries.
The delegation of U.S. Soy farmers had a tight and intensive program of visits, which gave them the chance to discover and understand Romania, one of the most important agriculture producing countries in Europe. Field visits were informative and allowed them to get a better understanding of the local farming sector, the reality of the feed and livestock industries, and the potential for progress and expansion. This helped the grower leaders to understand the opportunities and potential that exists in the Romanian market for growth in animal production and consequently, in the use of U.S. Soy products.
Continuing to support U.S. Soy customers will assist the development of this market and better position U.S. Soy products, especially because the companies and people visited during the week were very positive toward USSEC and U.S. Soy, standing to reason that the extra effort in supporting the current developments will deliver major returns in the near future.
USSEC hosted a one-day seminar in Bucharest during the first week of March for Romanian and Bulgarian nutritionists and feed mill managers with the goal to emphasize the efficient use and processing of U.S. Soy quality.
Through the papers presented at the seminar, consultants delivered a strong and clear take-home message: U.S. soybean amino acids’ digestibility and energy higher values advantages can better solve challenges of balancing feeds, high animal performances, and profitability. In addition, U.S. Soy farmers, as trusted suppliers, are able to supply the needs of today’s European feed industry for sustainably sourced ingredients.
“The audience enjoyed the information about relationship between soybean meal physical properties, anti-nutritional factors, and effects on animal performances,” stated USSEC consultant Dr. Gonzalo Mateos, professor of animal science at the University of Madrid, Spain. “There were very good interactions with participants regarding soybean meal attributes: particle size and particle size distribution, bulk density, color, trypsin inhibitors, urease and solubility indexes and how these properties impacts poultry and pigs performances. Several studies have been demonstrated that U.S. soybean meal is by far a superior ingredient compared to other origins soybean meals.”
Prior to and after the event, USSEC consultants Dr. Mateos, Dr. Birger Svihus, and Dr. Juan Acedo were escorted by USSEC Animal Utilization Consultant – Romania Dr. Iani Chihaia on field visits, with the goal of meeting soy end users and looking at the challenges that they are facing and how USSEC can provide solutions and maximize demand for U.S. Soy.
By the end of the activity, technical people from companies visited and seminar participants gained more knowledge about U.S. Soy’s positive attributes and, in this way, preference for U.S. Soy continues to be built.
The 5th regional Europe Union / Middle East – North Africa (EU/MENA) Soy Trade Exchange was held in Lisbon, Portugal, gathering almost 180 participants from roughly 40 countries.
The opening speeches and conference materials reminded the audience that soy products are the number one U.S. agricultural exports valued at over $20 billion with nearly 60 percent of total U.S. soybean production exported last year. Europe, the Middle East, and North Africa largely contributed to this export success. The U.S. Soy industry appreciates the partnership with the countries and companies represented in the audience.
The conference covered a number of topics that highlighted the developments and challenges central to the international and local soy markets and agricultural landscape. Major industry experts and senior trade representatives from Europe and MENA, including northeast Europe, attended the event and addressed many key topics. The participants showed real interest in learning about the latest developments in the soy markets, risk management, sustainability and quality.
In addition, the planned social and networking activities provided ample opportunities to develop and strengthen the relationships between the customers and key members of the U.S. soybean industry and explore real business opportunities.
Among the audience, USSEC had six customers representing leading commodity trading companies and feed compounders in the northeast European sub region who enjoyed the professional sessions and the whole conference.
Agnieszka Kotarska of Glencore-Poland said, “Thank you, USSEC, for having us at this highly professional and super interesting event. I am sure my Polish and Hungarian colleagues agree with me that the firsthand information gathered here and personal contact with many experts and industry members from the U.S., Europe, and other countries will be beneficial in our work in the months to come. We think it was a great event!”
These customers also valued the organizers providing all the presentations to them after the conference, calling it “unique” in the convention business.
USSEC staff and local regional consultants also held the event in high regard. USSEC Technical Director for Northeast Europe Jerzy Kosieradzki stated, “It was probably the best of all of the regional trade conference we had ever had in Europe/MENA Region. The presentations on soy markets and macroeconomic perspective were especially valuable and considered first class.”
The Lisbon Trade Exchange also confirmed that the earlier strategic decision made in the hosting region to reduce USSEC’s Europe/MENA customers presence at the U.S. Soy Global Trade Exchanges, while focusing instead on the regional buyers’ conferences every second year and clearly targeted team trips to the U.S., was a good decision.
USSEC recently brought Dr. Jannes Doppenberg, swine nutrition expert at Schorthorst Feed Research (SFR), the Netherlands, to Poland to visit with a number of local feed compounders and swine integrators and discuss their feeding programs. From the point of view of the U.S. Soy industry, such personal visits of internationally renowned experts help to build up its relationships with key local nutritionists, which is key to delving deeper into their feed formulations, and encouraging them to share how they formulate feeds and which feedstuffs and nutrient restrictions they use.
At a couple of companies, presentations were shown on the effect of birth weight on technical performance and meat quality, along with the effects of dietary amino acid levels and genetics. In conclusion, weight selection of the starter piglets and split sex feeding will decrease feed costs and improve carcass validation. It was emphasized that higher levels of dietary amino acids will improve carcass quality, especially with genetically superior piglets and boars versus barrows. This will obviously increase the soybean meal usage.
The nutritional discussion at some of the other companies focused on lactating sow feeds. Results were presented on how to increase feed intake by using high quality proteins, meaning an amino acid profile as close to ideal as possible and a high ileal digestibility. This provided the USSEC consultant with the opportunity to mention the higher quality of U.S. Soy.
At one company, the discussion concentrated on comparing technical results from Poland with those in the Netherlands, U.S., and some other leading countries. With a lowest feed conversion ratio (FCR) of 2.6 (up to 3.1 with high slaughter weights), there was a lot of room for improvement. This meant the energy conversion was even worse. The use of an standardized ileal digestibility (SID) amino acid profile and net energy system were discussed in order to improve technical performance and validate the superior quality of U.S. soybean meal. The bi-monthly soybean meal quality by origin report produced by SFR for USSEC, which included shadow pricing for Poland, was shown to the customers.
Also, the expert’s meeting with the largest integration in Poland, ended with a clear conclusion that setting higher levels of SID amino acids in their pig diets would increase the usage of soybean meal slightly increasing the feed cost, but would result in better carcass quality of their finished pigs.
The January 2017 edition of PorcMag, the leading publication of the French pork industry, contains a detailed article on sustainable soy production in the United States. Written by Pascal Kuipers, a Dutch food and agricultural journalist, the article describes the importance of exports to U.S. soybean producers; raises and addresses some of the common European concerns with GM, such as weed resistance and concentration of the industry while highlighting the contributions that GM technology makes to producing sustainable soybeans (less fossil fuel and greenhouse gases, less water and improved soil health); and comments on soy imports and incentives for the production of alternative protein crops in France. Focusing on sustainability, the article reviews the role of the U.S. Department of Agriculture’s (USDA) Natural Resources Conservation Service (NRCS); the Field to Market Program and USSEC’s Sustainable Soy Assurance Protocol (SSAP).
USSEC and its partners have an active campaign to promote greater awareness of sustainable U.S. Soy among key industries in Europe, including feed companies and livestock producers. PorcMag is a principal news outlet for the French pork industry, publishing 6000 hard copies each month in addition to its substantial online readership.
Kuipers participated in a USSEC-sponsored trip to the United States last fall, which included visits to farms in Iowa, Maryland and Delaware. The visit and his interviews provided the basis of the article.
Discussions focused on the quality, consistency and sustainability of U.S. Soy during the 5th U.S. Soy Global Trade Exchange for Europe – Middle East/North Africa (EU/MENA) during the recent conference in Lisbon, Portugal. More than 180 customers and 15 USSEC members from 32 countries gathered to discuss the global soy market situation and expectations for the feed and food industry for Europe and the Middle East. USSEC’s two-day conference is one of the few events combining the soy industry throughout those regions and leading soy crushers, feed companies, and poultry and livestock producers were in attendance.
Conference presenters highlighted the importance of the Europe and Middle East market with data showing that EU-28 and Russia represented the top three countries in poultry and pork production growth since 2010, behind only the U.S. Additionally, 13 of the top 30 global feed-producing countries are in Europe and MENA and were represented at the USSEC conference. With one-third of the global gross domestic product (GDP), this region continues to increase its soy consumption and remains highly competitive in poultry and pork production.
USSEC and United Soybean Board (USB) director Todd Gibson, American Soybean Association (ASA) director Bill Wykes, and USB director Andy Fabin highlighted the sustainability of U.S. Soy in their presentations. Each emphasized the sustainability practices of his farm and his production expectations for the upcoming growing season.
Regional customers noted their appreciation in hearing about soy production straight from the producers. USSEC Regional Director – EU/MENA Brent Babb stressed the importance of the U.S. Soy Sustainability Assurance Protocol (SSAP) and the positive environmental indicators of U.S. Soy production. Nick Major, representing FEFAC, the European Feed Association, discussed the importance of sustainability to consumers and retailers in the Europe market. The SSAP meets the benchmark of FEFAC’s soy sourcing guidelines and is a welcome source of sustainable soy supply for the European market. The EU is one of the major users of the SSAP certification system, which now totals over 6.7 million tons in export shipments this marketing year, over 10 percent of U.S. Soy exports.
The second SFERA conference “Fish 2017” (Fish processing and aquaculture technologies) took place during the first week of February, in Moscow, Russian Federation. The publishing house SFERA from St. Petersburg and the All-Russian Atlantic Research Institute of Fisheries and Oceanography were co-organizers of the event. Approximately 200 registered, national, and international scientists, nutritionists, and representatives of the feed industry attended the two-day conference. Speakers came from Russia and from several other European countries.
Besides the exchange of research, results, and scientific data, the conference aimed at exchanging and reviewing successful experiences of national and foreign companies in their establishment and further development in Russia. Representatives from the executive and legislative branches of the federal and regional governments were also present. Consequently, regulatory aspects of the aquaculture sector were discussed along with the various development programs for Russian regions. The aquaculture industry is clearly a priority for the Russian federal government and its regional governments. This is hardly surprising given the tremendous capacity and potential of aquaculture in Russia.
The papers presented at the conference addressed the characteristic issues associated with the rapid growth of a new industry from technical, marketing, and legal points of view. Animated discussions followed the presentations.
USSEC was a major sponsor of the conference and two USSEC consultants, Dr. Iani Chihaia and Dr. Jan van Eys, spoke at the event. Dr. van Eys presented a paper, “Innovations in the Area of Technologies and Feeding of Industrial Fish Production,” emphasizing the potential of soy products to replace fishmeal in aqua formulations. Dr. Chihaia presented a paper entitled “Optimization of the Use of Ingredients in Aquaculture Feeds; Nutritional, Biological, and Technological Properties for Proper Application, Balancing, and Manufacturing.” The main issues of the USSEC presentations were published in Russian language in corresponding articles in SFERA FISH magazine distributed during the conference and released on the SFERA website.
The issue of the use of soy products to replace fishmeal is of major concern and interest for Russian fish producers and since much of their current and future production concentrates on fresh water species, the potential for the use of soy products in fish feed is important. The superior quality of soy relative to other plant protein – even locally produced – is well recognized and appreciated.
A delegation from the Illinois Soybean Association (ISA) visited the United Kingdom for four days at the end of January. Included in the group were ISA chair Daryl Cates, vice chair Lynn Rohrscheib, treasurer Stan Born, and USSEC director Sharon Covert, along with six other ISA board members and four ISA staff, including CEO Craig Ratajczyk. The objective of the visit was to gather insights into the current dynamics of the soybean market in the UK and engage with industry contacts on issues such as Brexit, sustainability, and future U.S.-UK bilateral trade. Eugene Philhower, USSEC Representative – Northern Europe, developed the schedule and program in cooperation with USSEC consultant David Green of Greenhouse Communications.
The formal visit began with a dinner with Mike Hambly, chairman of the National Farmers Union (NFU) Combinable Crops Board, who farms in Cornwall, who provided useful and interesting insights. While agricultural producers in the UK and the U.S. face many of the same challenges, the political and social environments in the UK and European Union are very different, with more powerful environmental NGOs and retailers influencing both policies and the market.
The group visited Tithe Farm, a 450 ha. arable crop operation run by Jim Meadows and his son Mark. They saw firsthand winter rapeseed and learned about weed resistance, increasing limitations on pesticides use, and general uncertainties in the market. The group also visited with Camgrain, a storage and logistic farmer cooperative. On the same compound, a rapeseed processing plant to be powered by a woodchip biomass generator was under construction.
The group visited the headquarters of the UK National Farmers Union in Stoneleigh and received briefings from the NFU staff on the rapeseed market, innovation, Brexit and sustainability. There is a high degree of uncertainty of what Brexit will mean to producers, with the added complication that agricultural policy has been devolved to the four parts of the UK (Scotland, Wales, Northern Ireland and England). Also, the diversity of the British agricultural sector, with some producers very dependent upon exports to the continent and others less so, complicates the approach to be taken in the upcoming Brexit negotiations.
The following day at the hallowed Farmers Club in London, the group received a number of briefings: Mr. Green provided a briefing on the institutions of the European Union and provided status reports on biotech approvals and pesticide re-registration; Foreign Agricultural Service (FAS) – London provided an overview of bilateral trade between the U.S. and the UK and the uncertainties with Brexit and the new administration in the United States; Richard Whitlock, a British agricultural consultant, provided his views on the challenges ahead; and Keith Millar of the UK Food Standards Agency briefed the group on developments within the EU and the UK on animal feed.
This was a very educational trip for all of us. We learned of the similarities between U.K. and Illinois farmers, such as government regulations and challenges such as resistant weeds to control. However, one thing that all of us are in agreement on is how important trade is for everyone, now and in the future.
-ISA chair Daryl Cates
A delegation from the Illinois Soybean Association (ISA) visited the Netherlands on January 23 and 24. The purpose of the visit was to get a better understanding of the dynamics influencing the Dutch market for Illinois soybeans and to engage the Dutch industry on issues of importance to the U.S. Soy industry. The group was joined by Eugene Philhower, USSEC Regional Representative – Northern Europe, who organized the two-day visit.
The group included ISA vice chair Lynn Rohrscheib and ISA directors Gary Berg, Jered Hooker, Paul Rasmussen, and Roberta Simpson-Dolbeare, as well as Craig Ratajczyk, ISA CEO and Jayma Appleby, director of industry relations.
The program was designed to gain insights into the Dutch market by briefings along the soy value chain. The U.S. Department of Agriculture (USDA) office from the U.S Embassy in The Hague provided an overview of the Dutch market, highlighting the importance of the ports of Rotterdam and Amsterdam as the entry point for U.S. commodities coming into Europe. The Dutch Farmers Organization (LTO) provided a briefing on agricultural policy and the challenges being faced by Dutch producers. Their representative pointed out that the Netherlands is the second largest exporter of agricultural and food products in the world. Nevedi, the Dutch feed industry association, described their work supporting the development of sustainable soy sourcing guidelines for the Dutch and European feed industries.
The group visited the headquarters of Ahold Delhaize, a global retailer (comparable to Food Lion or Stop and Shop in the U.S) and the largest retailer in the Netherlands and Belgium. After visiting a local store (Albert Heijn), they provided a briefing on the organization and their sustainability initiatives. Dutch retailers have committed to 100 percent sustainable soy for feed, mostly relying on Roundtable on Responsible Soy Standard (RTRS) credits to achieve that goal. They were interested in learning more about the U.S. Sustainable Soy Assurance Protocol (SSAP).
On the second morning, the delegation visited an agricultural research farm operated by Wageningen University where they are conducting varietal tests for soybeans, mostly varieties developed in Canada. The researcher admitted that growing soybeans in the Netherlands has its challenges in terms of protein content, length the growing season and overall yield per hectare. In three to five years, they project 10,000-20,000 hectares producing soybeans for human consumption. That afternoon, the group visited a feed mill operated by AgruniekRijnvallei, a Dutch cooperative specializing in custom feed preparation for the Dutch livestock industry.
At the end of the visit, Ms. Rohrscheib said, “The trade mission to the Netherlands was a great opportunity for Illinois soybean producers to be able to engage in fruitful discussions with the buyers, constituents, and governmental organizations who play a major role in the soybean story in the Netherlands and the European Union.” She added that the group learned how Dutch and European farmers are being regulated and how those rules not only affect the farmers and consumers in the European Union but how those regulations affect soybean producers in Illinois. “As producers, we look forward to continuing the discussion with the key players in the European market so we can work together, market our soybeans and continue to provide the highest quality soy. Without these key conversations, we will not be able to understand the foreign markets and effectively sell our soybeans.”
USSEC attended one of Russia’s largest industrial exhibitions, the XXIInd International Industrial Trade Fair, “MVC: Cereals – Mixed Feeds – Veterinary – 2017” on January 30 and 31 in the All-Russia Exhibition Center of Peoples’ Achievements in Moscow. Since 1996, this particular trade fair has become an undisputed authority and one of the largest professional forums in the world where experts gather to share and exchange new ideas and knowledge, build long-term relationships, and sign contracts. More than 400 exhibitors represented 26 countries and 40 regions of Russia at the event.
The exhibition was accompanied by a diversified business program including international conferences, seminars, and workshops devoted to different aspects of feed supplies and production, nutritional parameters of different feed additives and modern feeding programs, livestock production, feed market status and development, oilseed and meal supplies, and veterinary issues, among others.
The USSEC consultants participated at two key events of the program, giving presentations featuring the usage of soy for different feeding applications and demonstrating the nutritional benefits of U.S. Soy.
More than 120 people attended the USSEC presentation and follow-up discussions. Dr. Jan van Eys answered a number of questions proving the availability of soy proteins for aquaculture diets. Despite the modest level of current aquaculture and fish farming in Russia, this area has a very high potential for development in the next few years. Domestic production of Hi-Pro soybean meal and soy protein concentrate (SPC), which was started by the Sodrugestvo group in Kaliningrad, coupled with a shortage and a rise in fish meal prices has increased the interest of local feed producers to alternative protein sources derived from soybeans.
Russia already ranks fifth in the world in pork production and is expected to grow further over the next several years.
One day of the Moscow visit was devoted to meeting and consulting with local customers at the booth of Sodrugestvo group, which offered the opportunity to further explain the advantages of U.S. Soy and soy in general in poultry, aqua, and swine rations.
Sodrugestvo is the largest soybean crushing company in Russia and the former Soviet Union region. The company is the largest buyer of U.S. soybeans in Russia and the Commonwealth of Independent States (CIS). In MY16, it imported half a million metric tons (MT) of U.S. soybeans. T he company was very disappointed with a temporary suspension for the import of U.S. soybeans imposed by Russia in February 2016 and looks forward to its cancellation.
Brazilian meat company BRF has signed an agreement to acquire USSEC customer and Turkish poultry producer Banvit to expand its international presence. Turkey is a bridge between Europe and Middle Eastern countries and BRF plans to use this advantage to produce poultry in Turkey and export to these countries due to the price advantage and Halal certification of Turkish companies.
The enterprise value of Banvit is estimated at $470 million. The transaction will be carried out through a joint venture between BRF and Qatar Investment Authority (QIA), the sovereign fund of Qatar. While BRF will hold a 60 percent stake in the joint venture, QIA will own 40 percent. Banvit, a fully integrated producer, has facilities ranging from feed control to final food processing. It has five feed plants, four hatcheries, and five production plants.
The first phase of the transaction involves the purchase of a 79.5 percent stake in Banvit, followed later by a tender offer for the remaining minority interest of 20.5 percent.
Banvit is a loyal USSEC customer, consuming around 150,000 tons of soybean meal and full fat soy for its poultry production. Banvit representatives have been regular participants in USSEC’s activities in the poultry nutrition, risk management, dairy nutrition, and feed formulation fields since USSEC began its activities in Turkey. This acquisition will drive the growth of Banvit as well as the poultry industry in the next couple of years in Turkey, as well as helping the Turkish poultry industry to export its production to other countries.
USSEC recently organized a technical seminar in Bucharest, Romania to support the development of the consolidation of Romania’s swine industry.
USSEC consultants Dr. Hans Stein and Dr. Jan van Eys visited with key Romanian integrated companies on behalf of USSEC prior to the event. The consultants were invited for field visits that focused on the industrial Romanian swine sector, including integrated feed manufacturers and large size swine farms, owned by local and foreign investors from various countries. The objective of these field visits was to audit the industrial facilities and see where technical advice could be provided in order to improve operations, increase efficiency, and emphasize the advantages of working with U.S. Soy products.
Meeting with feed mill, quality control, and farm managers was instructive and appreciated by the representatives visited. Regular contact between USSEC and its customers enhances the message that needs to be communicated and reminds customers of the importance of quality differences among soy products in addition to what USSEC can mean for these customers – both from a commercial as well as a technical point of view.
The week concluded with the seminar in Bucharest, where more than 25 attendees valued the information conveyed by speakers in regards to soy quality, novel soy ingredients, and swine nutrition.
Currently, the pig production in Romania is in the process of consolidation and pig farmers have understood the need for having sustainable production based on investments in technology, genetics, nutrition, and integration. At this stage, the top swine integrations are controlled by U.S., Chinese, and Danish investors who understood the opportunities coming from the demand and supply ratio: Romania produces 55 percent of the pork meat it consumes.
Given the interest in the various topics discussed during USSEC’s visit to Romania and the need as well as potential for improvements in pig feed manufacturing and farm management, a regular follow-up activity is suggested. This is especially true when considering the opportunity this market offers for growth in livestock production in Romania and the use of value-added U.S. Soy products.
Sutas, a USSEC customer and Turkey’s largest dairy producer, opened its third integrated dairy facility in Izmir, Turkey on December 23 with an investment of $80 million.
Sutas processes 2,200 tons of milk daily and produces 360,000 tons of dairy feed yearly. The company enjoys a 15 percent market share for milk in Turkey with gross sales in 2015 of 2.3 billion Turkish lira (TL) and 2.6 billion TL in 2016.
The investment in Sutas’ new facilities is about $80 million U.S. dollars (USD) and they will process 1000 tons of milk and produce 600 tons per day of feed, along with 6.4 megawatts of electricity and 100 tons of organic fertilizer. Sutas is already collecting 2,200 tons of milk with 8 percent of this amount is coming from their owned dairy farms and the rest collected from 28,000 farmers in different parts of Turkey.
The president, prime minister, minister of agriculture and many other government ministers attended the opening of the new facilities. Sutas executives present included Mr. Yilmaz, president; Mr. Tezel, vice president; and Mrs. Serpil Veral, CEO.
One of Sutas’ main goals in this investment is to export its products to Russia. Russia was importing €5 billion worth of dairy products before the embargo from EU countries, but is now importing these products from Argentina and Brazil. Turkey is producing a large amount of dairy products that they currently export to Russia and Japan, but they will now be producing different types of dairy products giving them a greater opportunity in these markets.
Sutas also acquired dairy companies in Romania and Macedonia and invested $20 million USD in those companies to supply dairy products to the EU. Turkey is currently not allowed to export dairy products to the EU.
Sutas has been in the dairy business for three generations and celebrates its 41st year in the business this year. Their integrated business model is “from the grass to the table” and they opened their first facility in Karacabey /Bursa in 2004 using this model. Since that time, they have invested $620 million USD in this business with 3 facilities. With the new facility, they are estimated to grow 50 percent in 2016.
Sutas is a very good partner to USSEC who regularly participates in USSEC’s events in Turkey and events in other countries, such as the U.S. Soy Global Trade Exchange in the U.S. While many companies are holding their investments in Turkey at this time, Sutas’ investment in Izmir is noteworthy. USSEC congratulates SUTAS for its new investment and trust in the dairy business and the consumption of dairy products.