Low-protein U.S. soy crop dents meal quality, might raise feed costs

CHICAGO (Reuters) – A protein shortage in this year’s U.S. soybean crop has forced processors like Bunge Ltd to cut the amount of the nutrient they can ensure in soymeal, prompting issues that animal feed expenses and meat prices might increase.

SUBMIT PICTURE: Soybean plants are seen on a farm in Coatsville, Maryland August 30, 2013. REUTERS/Gary Cameron

Adverse crop weather condition this summertime most likely dragged down the protein material of soybeans, prompting issue that the soymeal produced at crushing facilities will be light on protein and other crucial nutrients, traders and farming specialists said.

Soy plants can tweak processing steps to maximize protein yields and animal feeders can change rations to consist of other feeds and supplements. However customers may eventually feel the pinch in greater poultry and pork prices as the steeper production costs are passed along.

“The pig does not care if it’s a low-protein crop or not,” said Charles Hurburgh, teacher of farming engineering at Iowa State University. “The pig just wants the protein so the nutritional expert has to change provisions. They will probably wind up with a little bit more costly rations.”

Hurburgh is gathering samples for the United Soybean Board’s annual soy quality study. Early information recommends the United States crop would balance about 34 to 34.5 percent protein, down from 35 percent generally, he stated.

That may translate to lower-protein soymeal.

High-protein soymeal that generally is offered with 47.5 to 48 percent protein is being provided at 46.5 or 47 percent instead, traders said.

“In general, the industry is seeing lower protein content in new crop soybeans,” said Deb Seidel, spokesperson for Bunge North America. “Bunge, together with a lot of other operators, have changed protein specs (in soymeal) to guarantee we are accurately showing the product we offer to our clients.”

She did not elaborate on the size of those adjustments or the plants at which they have happened.

“With a couple of exceptions, practically everybody is going to 47 (percent) in the East and 46.5 in the West. And to be truthful, some can’t even make that at this time,” said a rail soymeal broker who decreased to be called.

Livestock and poultry will feel the effect later on this year or in early 2018 after more recently harvested beans are processed and blended into feed rations.

“A diet manufactured at a feed mill where lower crude protein bean meal is being used, that’s going to be more expensive,” said Omarh Mendoza, associate director of nutrition at The Maschhoffs, the fourth-largest U.S. hog producer.

Additional reporting by Julie Ingwersen in Chicago; Modifying by Matthew Lewis