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Soybean crush is forecasted to increase 10-20 percent by 2025
Illinois Correspondent

PEORIA, Ill. — Soybean growers can look forward to a 10 to 20 percent increase in the U.S. soybean crush by the year 2025, according to Stan Born, a board director for the U.S. Soybean Export Council (USSEC) and the American Farm Bureau Federation. Born, who has traveled extensively around the world promoting soybeans, came to the Peoria County Farm Bureau on March 24 to talk about U.S. soy markets and upcoming meal-oil opportunities.
“The demand for soybean oil is growing dramatically, and this is largely driven by the production of biofuels. Those processes use vegetable oils to produce that diesel fuel, and places like California have put in place a low-carbon fuel standard that demands the use of these biofuels. This is what’s driving up the use of oil, and the investment by companies like ADM, Bungee, Cargill and CBG to crush more soybeans here domestically,” said Born.
Farmers should be aware that carbon intensity goals of the Biden administration, corporations, states like California and some foreign countries are helping drive demand for soybeans in the near-term, Born noted. 
“For us as soybean producers, because these processes take about 7.5 pounds of soybean oil per gallon to make biodiesel, it’s going to take a fair amount of production. The purpose of the increase in crush investment by these companies is to have more oil available to feed these facilities. That’s a good development for us,” he said, adding that some analysts predict the U.S. will need to import more soybean oil to keep up with projected demand. 
Despite projections that foreign demand for U.S. biofuels may decline, Born also likes the look of the U.S. soybean export market in the coming years.
“Exports have been six out of every ten rows that we produce, so it’s a big opportunity for us. But here’s the fundamental thing: as economies grow, people change their diets. When they have more money in their pocket, they move from eating rice to eating meat. You have to feed that meat — the chickens, the pigs, the fish — and they need protein. That is where soy is the ideal solution,” Born said. 
Despite the current buzz on electric cars, Born also sees the market for soy-based biofuels increasing in the near-term. “Renewable fuels will help bridge that gap to get to electric transportation. Biofuels have a better environmental footprint than conventional motor fuels, so the outlook for us is solid, and I’m excited about it as a soybean farmer,” he said.
With the increases in demand expected for soybean oil, exports and biofuels, analysts are predicting that the percentage of soybeans used for human consumption will decline in the next few years. “Fuel use is going up about 25 percent, for instance, and food use is going down maybe 4-5 percent,” said Born. “Historically, fuels suck up about 35 percent of all oil used. Food is about 58 percent, but our food use is going to go down to 54 percent, and domestic use for biofuels is going to go up to 41 percent, while biofuels will decline slightly. Demand is going to last for food use, and if you look at soybean oil stocks, they are higher today than they were at the beginning of the pandemic.”
Born added that the availability of soybean oil used for food should not be affected by increased demand for other utilizations. “The balance sheet doesn’t show that we’re going to take a bunch of oil away from our pastries and butter and other things we make from soybean oil,” he said. 
Soybeans meal, as a co-product of the oil extraction process, will likely increase and result in lower meal prices for producers, Born predicted. “That’s going to create an opportunity for a higher inclusion rate, or more of the protein component in the feed mix here in the U.S. than what we have traditionally,” he said, “so we will probably consume a little more here in the U.S.”
An opportunity to take advantage of an increase in meal production lies in the central South America and Mexican markets, where proven logistics and working relationships are already in place. Expanding meal markets in Indonesia and southeast Asia, along with frontier markets such as Africa, is on the radar of the USSEC, according to Born, who farms near Decatur, Illinois in Moultrie County. 
The Chinese market for U.S. soybeans, which accounts for about 60 percent of all U.S. soybeans exported, should continue to be steady, but is unpredictable. “China is tying up trade agreements and could soon turn into a soybean-exporting nation,” Born said. 
With increased demand for U.S. soybeans expected, Born told the Peoria farmers that the bipartisan U.S. Infrastructure and Investment and Jobs Act, signed into law in November, will help facilitate their movement around the world. 
“You can get good quality soybeans from around the world, but the best quality soybeans are grown here in the U.S. The thing that further separates us is the reliability of delivery,” he said. “Reliability of supply is a key competitive advantage for us here in the U.S., and this bill will help ensure that advantage for decades to come.”
Born concluded his remarks by encouraging the Peoria farmers to continue to be a voice for agriculture by maintaining a voice with their elected officials at the local, state and national level.