By LINDA McGURK
Indiana Correspondent

WEST LAFAYETTE, Ind. — Soybean meal prices will likely stay “steady to strong until 2020,” despite mounting supplies caused by the booming biodiesel industry, according to a recent study by the United Soybean Board (USB).

“It is important for us, as farmers, to find out if and how the additional soybean meal produced because of the increased biodiesel production can be absorbed into the market,” said Mark Seib, president of the Indiana Soybean Alliance (ISA).

Domestic animal agriculture currently gobbles up 98 percent of the soybean meal used in the United States, and the study states that maintaining and increasing a viable livestock and poultry industry will be crucial to the future of soybean meal.

As soybean meal supplies increase, the livestock and poultry industry’s usage could decrease to 75 percent. Exports could absorb some of the excess, but only if prices are competitive enough to encourage China, which has an active crushing industry, to buy soybean meal rather than whole beans.

The USB study also found that aquaculture – an industry that is rife for expansion – could play a key role in absorbing the increasing supply of soybean meal in the future.

“The growth potential for the aquaculture industry is tremendous,” said Seib. “Soybean meal can be a cost-effective, efficient way to feed this expanding market.”

The ISA has funded aquaculture research for the past 15 years, including projects led by Dr. Paul Brown, an aquaculture professor at Purdue University. Although their diets are species-specific, most fish are fairly tolerant to soybean meal, according to Brown.

“One of the fundamental challenges is that fish require a lot more protein (than poultry),” he said.

Brown is exploring ways of mitigating that by adding soy protein concentrate to his formulas, which generally consist of 30-45 percent soybean meal, depending on the fish species.

Although aquaculture is still considered a relatively small niche market in the U.S., fresh farm-raised fish fit well with the public’s renewed interest in farmers’ markets and locally grown foods.

Based on predictions he made a few years ago, Brown said aquaculture could consume as much as half of the U.S. soybean crop.

“Aquaculture needs to grow to fill the demand. Our oceans can’t supply enough fish and shellfish anymore.”

Historically, the important fish feed mills have been located in Pennsylvania, Utah and Canada, which translates to high transportation costs for fish producers in the Midwest. But with soybean meal replacing a significant share of the fish-based feed, aquaculture is poised for expansion in this part of the country.

“For us in the Midwest (soybean meal) alleviates one of the risks with aquaculture,” said Brown, who also touted farm-raised fish because of its added health benefits and lower probability of contamination than wild fish.

Aside from an increasing demand from the aquaculture industry, the USB study concluded that soybean meal will remain the leading protein source for the hog and poultry industries, despite a growing supply of dry distillers grain (DDG).

DDG, a co-product of ethanol production, is high in fiber and has therefore greater potential with the cattle industry.

The study also suggests that higher corn yields and a strong world demand for soybean meal from the livestock, poultry and aquaculture industries will lead to swelling soybean acres by 2020.

Soybean acreage is predicted to grow from approximately 74 million acres planted in 2005 to 82 million acres planted in 2020, at the expense of corn acreage, which would fall from approximately 79 million acres to 73 million acres during the same time.