ASA & NBB Express Concerns over Supply Chain (But Not Soy Oil)

(American Soybean Association) As the House Agriculture Committee hearing on The Immediate Challenges to Our Nation’s Food Supply Chain convenes Nov. 3, producers, processors, and users of soy are expressing their concerns over recent issues ranging from labor shortages to shipping woes. They’re also expressing what they’re not concerned about: soy oil supplies.

Food industry groups have waged claims that there’s a crunch on the supply of soy oil available when soy is crushed—and that foodservice cannot get enough edible oil for cooking because, those groups say, oil is being diverted to biodiesel and a burgeoning renewable diesel market.

American Soybean Association CEO Stephen Censky, in a recent editorial, was clear: There is no cause for alarm; 86 million acres of soy are currently being harvested—and a projected record 4.4 billion bushels. Likewise, processors are gearing up to process more soy and assure adequate soy oil is available for food, feed and fuel: At least seven new oilseed processing plants are under development, and soybean oil production by the domestic processing industry is projected by USDA to reach a record level this year—on top of a 26% growth in supply over the last 10 years. In short, Censky said, the markets are responding to the new demands.

The National Biodiesel Board agrees, stating that new demand is sending the right market signals to both soybean farmers and soybean crushers, leading to increased value for farmers, processors and rural economies, which in turn leads to more protein for livestock production and oil for food manufacturers.

Both NBB and ASA also have concerns that pinning inflationary pressures impacting the food and agriculture sector across all cost categories on renewable fuels expansion could affect support of the Renewable Fuel Standard.

Donnell Rehagen, CEO of the National Biodiesel Board said, “Biodiesel and renewable diesel production consistently support 13% of the value of every U.S. soybean bushel. Sustainable growth in our industry is also supporting new investments in domestic soybean crush capacity, which will translate into additional value for U.S. farmers and rural economies. A misguided attack on the Renewable Fuel Standard will simply undercut a valuable, stable market for the record harvest that soybean growers are achieving this year.”

In 2020, biodiesel production added close to $6 billion in U.S. farmers’ return on soybeans. And, biodiesel does not solely support farmers: The industry has a $17 billion economic impact and supports 65,000 American jobs.

Kevin Scott, soy grower from Valley Springs, South Dakota, and American Soybean Association president said, “There is currently not a soy oil supply shortage, nor is one envisioned by year-end, but there are in fact very real supply chain challenges impacting U.S. agriculture. We greatly appreciate the committee’s attention to these genuine issues and how to address them. Likewise, we hope the administration will demonstrate the commitment to biofuels and the RFS it has pledged despite these shortage rumors.”

The chief executive officers of more than a dozen agriculture groups recently identified the key supply issues affecting agriculture and related industries. Those concerns include labor, barge shipments, ports and shipping containers, trucking and rail freight, fertilizer, chemical inputs, energy, equipment and parts, and water availability. Read their full letter filed Oct. 18 with the Department of Transportation for submission to the White House Supply Chain Task Force.

Soybeans and all agricultural commodities rely on a multimodal network to move product to market. As such, a strong supply chain built on reliable infrastructure systems represents the largest advantage for American soybean farmers over competitors in Brazil and Argentina. Recent supply chain challenges related to transportation and infrastructure, input supply, and labor continue to negatively impact soybean growers and the agricultural industry as a whole.

The American Soybean Association represents U.S. soybean farmers on domestic and international policy issues important to the soybean industry. ASA has 26 affiliated state associations representing 30 soybean-producing states and more than 500,000 soybean farmers. More information at soygrowers.com.

The National Biodiesel Board is the U.S. trade association representing the entire biodiesel and renewable diesel value chain, including producers, feedstock suppliers and fuel distributors. Made from an increasingly diverse mix of resources such as recycled cooking oil, soybean oil and animal fats, biodiesel and renewable diesel are better, cleaner fuels that are available now for use in existing diesel engines without modification. More at biodiesel.org. READ MORE

Excerpt from Agri-Pulse: The unfortunate fact is that prices have increased not only for soybean oil right now, but likewise for many products. Farmer input costs have rapidly increased. For example, fertilizer prices have approximately doubled this past year. Other parts of the supply chain downstream from the farm are also experiencing higher costs, with the producer price index for general freight trucking increasing by more than 20% in slightly over a year and barge freight costs on the Mississippi River about six times higher than just a few months ago.

Attempting to pin the inflationary pressures impacting the food and agriculture sector across all cost categories solely on renewable fuels expansion is illogical. Doing so would only stifle our ability to reduce carbon emissions, could potentially increase protein prices for livestock producers, and would keep the market from adopting soybean processing expansion that would allow it to meet growing demand. This would hurt farmers’ ability to withstand the higher costs they, along with much of the world, are facing.

Rather than create concern over edible soybean oil supplies, we encourage our food industry peers to recognize that America’s soybean growers are meeting current demands at the same time the soy industry prepares to meet even greater future demand for our versatile commodity—be that for food, feed, fuel or soy’s many other diverse uses.

There are numerous real challenges, both ongoing and developing, in food and agriculture. We are thankful soybean oil supply is not one of them and that every bit of each bean—whether meal or oil—can be used for America’s vital, evolving agricultural markets. READ MORE