“Our estimates show a loss of income of US$575m for the national oilseed complex, due to the consequent and persistent fall in the protein quality of soybean meal,” reads the report [quote is google translated from original Spanish].
The study indicates that such losses for the overall soybean complex are primarily due to higher energy costs sustained by crushers as they try to increase the protein level of soymeal to meet importers’ requirements through the use of an extensive drying process.
As well as requiring more energy use, that process is said to reduce overall soybean meal production volumes by weight.
The report also shows that Argentina’s soy industry relies on the import of about 5 million mt of soybeans from Paraguay to enhance protein levels.
Argentina is the world’s biggest exporter of soybean meal for feed; falling protein levels have been concerning crushers for years.
The global standard for meal is 47%-48% protein, but Argentina has had to cut its benchmark to 46.5%. Quality discounts are also being priced into Argentine meal more frequently, finds an ADM report on the issue.
Record corn output
The ADM data also noted that Argentina’s 2021-22 corn area is set to climb to a record 7.1m hectares or 15.5m acres, with the team citing a Buenos Aires Grain Exchange report.
Farmers are to plant more corn because of high yields last season, robust prices and the outlook for improved profit margins, especially compared with soybeans on key Pampas farmland.
Planting of the 2021-22 crop begins this month and runs through to February.
Production estimate for the previous 2020-21 season increased to 50.5m metric tons from the expectation of 48m last week.