Soybean meal: A protein powerhouse for European livestock
The European Union (EU) is the world's second-largest importer of soybean meal, and the demand is expected to continue its growth in the coming years. This surge is due to the increasing popularity of livestock products in Europe and the growing awareness of the nutritional benefits of soybean meal.
Brazil is a major supplier of soybean meal to Europe, accounting for over half of the EU's imports. The Brazilian soybean industry is booming, with production expected to reach a record high in 2022. This increase is due to several factors, including favourable weather conditions, strong demand from China, and the weak Brazilian currency. Over the past five years, there has been an annual increase of 2 to 3%, but the growth rate for the 2022 harvest nearly reached 4.5%. Given the robust demand, favourable profit margins for farmers, elevated worldwide pricing, and the relatively weakened Brazilian currency in 2022, the growth rate might even exceed this figure.
The EU's soybean production has increased in recent years, but it still only accounts for a small fraction of the EU's total demand. This is because the EU has a relatively small amount of land suitable for soybean cultivation. As a result, the EU will continue to rely on imports to meet its soybean meal needs. Approximately 2 million tonnes out of the EU's total requirement of 28–29 million tonnes, excluding the UK, originate from domestically grown soybeans. The rest is imported, with more than half of the EU’s needs being met by Brazil and Argentina in the form of soybean meal.
Europe is a large importer and consumer of General Purpose Oils (GPO). In terms of value, it ranks as the second-largest importer of oilseeds and the third-largest importer of grains. Although Asia holds a more prominent position in these markets, the European import value per capita is approximately three times greater than that of Asia when considering population size. This notable influence can be attributed to Europe's robust economic position, which prompts increased consumption of commodities. Furthermore, Europe boasts a sizable livestock industry catering to both domestic and export markets. Farm animals have substantial feed requirements, particularly grains and oilseeds, driving considerable consumption.
Key oilseeds imported to the European market include soybeans, groundnuts and rapeseed. Europe faces a significant supply gap of high-quality protein crops to meet the demands of its extensive animal product industry. The European Union took steps to address this issue several years ago by formulating a plant protein strategy several years ago, which has now become a focal point in its agricultural policy, as well as within the context of the European Green Deal, the Farm to Fork initiative, and biodiversity strategies. Nevertheless, the probability of domestic production adequately satisfying the escalated demand in the near future remains low.
The Netherlands is among the top importers of bulk oilseeds like soybeans, sunflower seeds, and grains like maize and barley. A significant portion of these imports is re-exported to other destinations either directly or after undergoing processing within the Netherlands. Notably, the country registered the third-largest volume of soybean crushing in Europe in 2021, accounting for approximately 20% of the total.
The Netherlands' role as a prominent trading hub is driven by efficient logistics and excellent connectivity of its major oversea ports in Rotterdam and Amsterdam with inland European destinations. Additionally, a significant import driver is the substantial Dutch animal feed industry. The Netherlands is home to some of the largest animal feed producers in Europe, including ForFarmers, Nutreco, Agrifirm and De Heus. Remarkably, the Dutch accounted for 10% of the total European animal feed production in 2021. This production caters to both the Dutch animal farming sector and export markets.