By Suzi Fraser Dominy
The crushing of soybeans for animal feed and vegetable oil has historically dominated overall usage of the world crop. A new report, however, says there is a large and growing use of soybeans for direct human food. The report, "Whole Soybeans as Food Ingredients," was published by Soyatech, Inc., a publishing, market research and consulting firm specializing in the food, feed, soybean and oilseed industries.
According to Soyatech’s president, Peter Golbitz, although most of the demand for human consumption of soybeans originates from Asia — where soybeans have traditionally been used as food — a growing market for soy protein products and soyfoods in Western nations is helping to create a new value-added market for soybeans beyond crushing.
Production of soybeans around the world has grown more than 400% over the last 30 years. For 2002, total world production was approximately 184 million tonnes.
The United States ranks first in the world in overall soybean production, but the larger region of North America — primarily Canada and the U.S. — is soon to lose its lead as the combined South American region becomes the largest producer.
Golbitz said that factors in this shift have been the abundance of low cost land and vast water resources in Brazil and in Argentina, coupled with lower labor costs. In addition, large investments in transportation infrastructure have led to the reduction of the only cost advantage that North American producers had over their South American counterparts — less costly access to markets. Favorable exchange rates further reduce the cost of South American soybeans for foreign buyers.
As well, the rapid adoption of GMO soybeans by American farmers coupled with the reluctance of some large trading partners to readily accept GMO soybeans into their food supply chain, and flat domestic demand, has added to reduced demand for U.S. produced soybeans and soybean products.
These trends have opened the door for larger exports from Brazil, where GMO soybeans have not been officially approved, planted and processed, although they are reportedly being grown there without government approval, Golbitz said.
WORLD SOYBEAN DISPOSITION
Each year, on average, 85% of the world’s soybeans are crushed into soybean meal and oil; about 9% is used as direct human food, and the balance is used on the farm as feed and/or seed or is lost as waste.
When the soybean is crushed, it yields 79% soybean meal, 18% crude soybean oil and 3% hulls and waste. Of this meal, 95% is further processed into animal feed while the remaining fraction is processed into a variety of soy protein products including defatted soy flour, grits, soy protein concentrate, textured soy proteins and isolated soy protein.
The report shows that the 5% of soybean crush that is processed into soy protein products has been continually growing at a rate of approximately 12% per year over the past six years.
The U.S. is currently the world’s leading processor of soybeans into soy protein products, followed by Brazil, Japan, China and other countries. Although the U.S. is likely to remain the leader in this category for at least the near-term future, production has been increasing quickly in both Brazil and China.
The use of soybeans as direct food (soybeans that are not first processed into soy protein ingredients from crush) has also been increasing due to strong demand in Asia for food processing, the need for efficient foods in Africa, and to a lesser extent, the growing market for soyfoods in Western nations.
STRONG SOY PROTEIN MARKET
Approximately 95% of the world’s demand for whole soybeans for food comes from Asia, with nearly 60% of that demand coming from China alone. This dominance in total use not only affects soybean production and trade within Asia itself, but also that in North and South America. The value of whole soybean exports for food is largely shaped by demand from China, Indonesia, Japan, and other developing Asian nations.
Although the use of whole soybeans as food will continue to grow around the world, Golbitz said the manufacturing and sales of soy proteins derived from crushing soybeans into meal and oil will grow more quickly due to the easy inclusion of soy proteins into existing food products. This will be true not only in Western nations, but also in developing countries where a modern food processing industry is just now developing, such as in China, India and other parts of Asia, as well as in Africa and South America.
Food processing technology has been evolving slowly to accommodate food safety and efficiency needs, as well as variable regional tastes. This, coupled with improved soybean genetics for flavor and processing should go a long way towards meeting processors’ needs.
Investments need to be made in soy protein plants worldwide, as well as crushing plants in South America, where production is slated to grow more than 5% per year for the next few years.
"As long as we don’t see back to back droughts in North and South America in any year, we should see adequate supplies of soybeans," Golbitz told WG. "And although carryover stocks aren’t growing as quickly as overall production, a shifting use of soybeans away from animal feed and towards direct human food will help keep the pressure off of supplies long term. Prices should stay steady as well for the time being," he added.
The market is calling for both identity-preserved soybeans — those that are non-GMO or have special traits — and GM soybeans that have special processor traits, such as modified proteins and oils. The commodity market will continue to fragment for the next 10 years as new genetics are commercialized and both the seed breeders and processors try to capture value from these varieties.
Per capita consumption of soybeans will grow over 50% worldwide, Golbitz predicts, from 3.1 kilos (6.82 lbs) annually per person in 2000 to 4.8 kilos (10.56 lbs) by 2010. Capturing value from specialty soybeans and future demand may require consolidation up and down the value chain from producer to first time processor.
"Eventually, it might require further acquisitions up the chain to food processor," he surmised.
For more information about the Soytech study "Whole Soybeans as Food Ingredients," contact Peter Golbitz by E-mail at: firstname.lastname@example.org or visit the Soytech website at www.soyatech.com.
Soybeans have found their way into an eye-opening array of foods. Starting with the basics, there’s soy milk, often used in infant formulas. And the familiar Oriental staple tofu, or soybean curd, is made by coagulating soy milk. But also consider soy yogurt, soyburgers, soy loaf and soy sausage.
Soy oil is the most widely used edible oil. In the U.S., you’ll find it in mayonnaise, salad dressing, processed cheese products, dessert frostings and much more. Soy components such as protein and oil are ingredients in dozens of everyday foods, including granola bars, potato chips and even most chocolate. Most soybean varieties have the USDA Agricultural Research Service in their pedigree. Between 1980 and 1994, the agency’s scientists released 66 varieties and 280 breeding lines.
Soybeans have been incorporated into a host of nonfood products as well. These range from your morning newspaper printed with soy oil-based ink to lipstick, plastics and paints.
What more can we make of soybeans? At one ARS lab, scientists are cloning soy’s genes for proteins to improve its nutritional quality. At another ARS lab, they are trying to learn how stress factors such as drought and heat affect the plant’s ability to flower. ARS is also breeding specialized soybeans to tailor soy-based products for every niche, from the supermarket to the export market.
Source: USDA’s Agricultural Research Service