Soybean meal is the most important ingredient that is used in the feed industry, mainly as a protein supplement. The development of animal husbandry along with the increase in feed production capacity are the main factors supporting the demand for soybean meal.
Asian countries
The Asian region is a leader in the production and consumption of soybean meal primarily due to China and the countries of Southeast Asia. As in other regions, in Asia, the demand for these products is interconnected with the development of the feed industry. It is expected that an increase in the production of meat and meat products will also serve as an additional incentive for demand for various types of meal and cake.
In recent years, consumers in this region have been paying great attention to the quality of the meat produced, the conditions of keeping animals before slaughter, as well as the feeds that were used in their growing period.
North America
This region is the second largest market for the production and consumption of soybean meal due to the United States, where the livestock sector is actively developing, forming the demand for animal feed. In recent years, feed producers have begun to give more preference to soy meal as an alternative to corn and wheat, since it contains more protein, which is its important advantage. The main share of soybean meal is processed into feed for the poultry and pig sectors.
European Union
The European region has been an important market for soybean meal for many years, since many European countries are major producers of compound feeds not only for animals, but also for aquaculture. With the growing popularity of sustainable aquaculture methods, many manufacturing companies are focusing on vegetable protein ingredients, including soy meal, which is valued for its high protein content and lysine, which is an essential amino acid.
Latin America
The Latin American region is also a major player in the soybean meal market, largely due to Brazil, Mexico and Argentina, which are both major global producers and consumers. Among the largest soybean meal producing companies in this region are Cargill Agricola, Coamo and Petroagro, which have a long-standing reputation as reliable producers and suppliers of agricultural raw materials worldwide.
Global market
Global soybean meal production by the end of 2022/23 decreased by 0.5% compared to the previous season, amounting to 244.5 million tons. The decline in production volumes was observed for two years from 2021/22, which was caused by a decrease in the gross harvest of soybeans in the largest producing countries, including Brazil, the USA and Argentina. In turn, this affected export figures in volumes and led to a reduction in soybean meal production in soybean-processing countries, especially in China. Nevertheless, according to USDA forecasts, in 2023/24 a significant increase in the output of soybean meal is expected due to the growth of the soybean harvest in Brazil and Argentina.
The leader in terms of soybean meal production in the world is China, which accounted for 29.8% of production in 2022/23. Compared to the previous season, the indicator increased by 4.7%, amounting to 72.9 million tons. Most of the processing is carried out by importing soybeans, since domestic production is not enough to meet the existing demand. Thus, according to USDA data, the production of soybeans in China in 2022/23 amounted to 20.3 million tons.
The United States accounted for 19.5% of global soybean meal production in 2022/23. The volume of products produced amounted to 47.7 million tons, which is 1.4% more than in 2021/22.
The USA is the world's second largest producer of soybeans, which allows the country to fully meet domestic demand, as well as to supply foreign markets. At the same time, in 2022/23, there was a decrease in soybean production in the United States, which was caused by dry weather conditions.
As a result, the export of soybeans decreased, while the volume of domestic processing was not affected, and the production of meal showed growth.
Brazil's share in global soybean meal production in 2022/23 was 16.8%. Compared to 2021/22, the indicator increased by 4.5%, amounting to 41.1 million tons. Brazil is the world's largest producer of soybeans. According to USDA data, in 2022/23, the gross harvest of this crop amounted to 156 million tons. Soybean production in Brazil declined in 2021/22, which, like in the United States, led to a decrease in exports of soybeans while maintaining the positive dynamics of the processing sector. The USDA predicts that soybean meal production will continue to grow actively next season due to the restoration of the volume of gross soybean harvest, which significantly exceeded the indicators observed before the drought, as well as an increase in acreage.
Argentina is also a major producer of soybean meal. In 2022/23, the country's share in global production was 9.7%. At the same time, the volume of production decreased by 22.1% compared to 2021/22, amounting to 23.6 million tons. The decrease in production is associated with a low yield of soybeans caused by prolonged drought. The USDA predicts that with the restoration of normal precipitation levels, yields will increase and gross soybean yields will recover, which, in turn, will lead to an increase in meal production. It is noteworthy that Argentina has a policy designed to stimulate the export of soybeans and their processed products. As a result, most of the meal produced is exported, and the country is the largest supplier of soybean meal in the world along with Brazil, while domestic consumption is at a relatively low level.
Global consumption of soybean meal in 2022/23 amounted to 245.0 million tons, which is 0.5% more than in the previous season. The average annual growth rate of consumption for 2018/19–2022/23 was 1.6%. At the same time, the main growth occurred in 2018/19–2020/21, and in the last two periods there has been a stagnation in the volume of global consumption of soybean meal, due to a decrease in production due to the failure of the soybean crop in a number of major producing countries. Nevertheless, the expected recovery in production volumes will significantly increase global consumption of soybean meal by 2023/24, according to the USDA forecast.
China accounts for 29.4% of global soybean meal consumption. In 2022/23, the indicator amounted to 72.1 million tons, which is 4.2% more than in 2021/22. Consumption is almost identical to the indicators of soybean meal production, which is explained by the small volume of imports. Domestic demand is provided mainly by processing imported and local raw materials. Small volumes of the produced meal are also exported, primarily to Japan.
Despite the fact that most of the soybean meal is used in the livestock sector, the Chinese government is taking measures to reduce the share of this type of product in animal feed. The policy is related to the desire to reduce the country's dependence on imports of soybeans as part of strengthening food security. According to the Ministry of Agriculture and Rural Affairs of the People's Republic of China, the share of soybean meal in feed in 2020 was 17.7%, but in 2022 this indicator decreased to 14.5%. The goal of this policy is to reduce the share of soybean meal to less than 13% by 2025. At the same time, according to the USDA forecast, the volume of soybean meal consumption will continue to increase due to the growth of the livestock sector in the country, despite a decrease in the share of this type of product relative to other feed additives used in the sector.
The US share in global soybean meal consumption in 2022/23 reached 14.4%. The average annual growth rate for 2018/19-2022/23 was 1.8%, but in 2021/22-2022/23 the indicator remained almost at the same level. Soy meal is the main protein supplement used in American animal husbandry. More than half of the consumption is accounted for by the poultry industry, but this type of product is also used in pig breeding and dairy cattle breeding. According to the USDA forecast, soybean meal consumption in the United States will increase as demand from the livestock sector increases, but the growth rate will remain at a relatively low level. The main limiting factor is the slow growth in the gross harvest of soybeans observed in recent seasons.
The three leaders in terms of soybean meal consumption also include the European Union, which accounts for about 11.0% of global consumption. In 2022/23, the indicator amounted to 27.0 million tons, which is 3.6% less than in 2021/22. A relatively small amount of soybeans is grown in Europe, and production is provided by imported raw materials. However, the existing processing capacities are insufficient to produce the volumes of soybean meal necessary to meet domestic demand. So, in 2022/23, only 11.6 million tons were produced, which is 4.5% less than in the previous season.
Thus, the European Union remains dependent on imports of both soybeans and their processed products, including soybean meal. Despite the fact that the EU is the largest buyer of soybean meal in foreign markets, imports in volume decreased in 2022/23 against the background of decreasing demand and consumption of this type of product in the feed industry. The main limiting factor is the decline in livestock in the livestock sector. According to the USDA forecast, soybean meal consumption will decrease in the medium term, including due to the diversification of soy use and stimulation of its consumption in the food industry as plant alternatives.
Brazil consumes about 8.2% of the global soybean meal market. In 2022/23, consumption amounted to 20.0 million tons, an increase of 2.3% compared to the previous season. About half of the soybean meal produced is exported, while in recent years Brazil has been rapidly increasing the volume of supplies due to a high yield of soybeans, an increase in processing capacity and a favorable exchange rate of the national currency. The volume of domestic consumption is also showing positive dynamics due to increased demand from the growing sector of beef cattle breeding, in particular beef and pork production. According to the USDA forecast, in 2023/24 Brazil will continue to increase the production, consumption and export of soybean meal.
The average import price for soybean meal in 2022 increased by 11.3% and amounted to $ 554 per ton of products. Among the leading importing countries, the most expensive products were purchased by the Philippines (4.4% higher than the average price), Germany (3.7% higher) and the United Kingdom (3.6% higher). The lowest purchase prices were demonstrated by Vietnam (11.9% lower than the average world price) and the Netherlands (7.1% lower). In 2022, the average export price of soybean meal was US$ 534 per ton, an increase of 18.8% relative to the level of 2021. The most expensive products among the leading exporting countries were supplied from India (38.2% higher than the average price) and from Russia (32.1% higher). The cheapest soybean meal was exported from Bolivia (18.3% lower than the global average price) and Paraguay (11.3% lower).
