The Greater Europe region is a key market for the U.S. Soy industry in both whole soybeans and soymeal exports.
With a population of 850 million people, the region represents 27 percent of the world’s GDP (for comparison purposes, the GDP of the U.S. is 23 percent of the global GDP), although its GDP growth is essentially flat.
Europe represents 11 percent of U.S. soybean and soymeal exports at 6,500,00 MT (238 million bushels). The 10 countries of Germany, Spain, France, the Netherlands, Italy, United Kingdom, Denmark, Portugal, Turkey and Russia import over 150,000 MT of U.S. Soy. U.S. East Coast exports to Europe are strong.
This growing market share for U.S. soybean meal demonstrates an increasing preference for U.S. meal, and the reliability of U.S. Soy export shipments has helped increase U.S. soybean exports to European markets. An increasing awareness of quality differences by soy production origin is occurring in Europe and is supportive of U.S. Soy’s advantages.
The U.S. Soy industry holds a competitive advantage in the Greater Europe region because of its work in the area of sustainability, which is of increasing importance to the European food and feed industry. As mentioned previously, NEVEDI approved the SSAP as a sustainable program in early 2015, and USSEC has worked closely with the European feed association, FEFAC, as it develops its sustainable scheme for the feed industry throughout Europe. USSEC also submitted the SSAP to the European Commission for use under the Renewable Energy Directive (RED) in April 2015 and continues discussion and review for its approval.
Europe is the world’s second largest GMO soy importer behind China. Approximately 90 percent of commercial feed produced in Europe is GMO. The European food industry, however, continues to greatly limit the use of GMO products due to labelling restrictions and a strong NGO presence. The Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the EU is being negotiated and could potentially create a quicker import approval process for Ag biotech events.
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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.