A Shift in the U.S. Soybean Market Brings New Opportunities for Meal Exports in Pacific Northwest
PNW Port Tour PT 1 103023
An exciting change is taking place in the soybean industry that will mean new markets for U.S. farmers. The U.S. currently exports between 55% to 60% of the total soybean crop each year on a volume basis, but now the industry is seeing a shift due to expanding soybean processing capacity.
The Pacific Northwest Port of Grays Harbor in Aberdeen, Wash., is an important infrastructure link for U.S. farmers getting their product to markets in southeast Asia. Grays Harbor focuses primarily on soybean meal brought in via rail from crush facilities in the northwest Corn Belt.
“We’re the largest soybean meal exporter on the west coast,” says Gary Nelson, executive director at the port. “We found a niche that works for us.”
The meal is loaded on ships destined for export customers in Southeast Asia, according to Mac Marshall, vice president of market intelligence, United Soybean Board.
“The Philippines is our No. 1 overseas export destination,” Marshall says, “but there are, of course, a number of other countries in that region, such as Vietnam and Indonesia, where there’s strong demand for soybean meal to support domestic animal agriculture and aquaculture.”
The port will play an even more vital role in the near future as the soybean export market sees a shift due to expanding soybean processing capacity, Marshall adds.
“If you look at all the company announcements that are public today, we’re looking at roughly a 30% expansion, maybe a shade higher than that, in the U.S.,” he says.
Those companies are seeing growing demand for biofuels, such as renewable diesel and sustainable aviation fuel, made from soybean oil.
“We’re going to have a lot more meal available for export as a result of that expanded crushing capacity,” Marshall says.
To prepare for that transition, soybean farmers are working with the port and Midwest soy processor AGP to make needed infrastructure improvements, including a new meal loadout facility.
“AGP approached us about two years ago with the idea the demand for oil is going to create a surplus of soybean meal,” Nelson says. “We started talking about planning for increasing our ability to export soybean meal out of the Port of Grays Harbor.”
Soybean producers in the northwest Corn Belt and nationally have also invested in these improvements because they realize the importance of infrastructure.
“For farmers to really capitalize on this and get the biggest value in return possible for their crop each year that requires efficiency of transportation and debottlenecking,” Marshall says. “That means we have to have efficient and higher capacity ports for unloading meal, putting it on the ships and getting it into export channels.”
There’s also a push by the soybean industry and AGP to expand sales in existing markets and develop new homes for soybean meal, according to Belinda Burrier, a farmer from Maryland and director on the United Soybean Board.
“USB, USSEC and WISHH, we’re all working together,” Burrier says. “It’s a great partnership. We’re building new markets and expanding the existing market so we can find a place for all of our soymeal to go.”
“AGP is also trying to stir up business,” Nelson adds. “We’ve shipped to all those places in Southeast Asia before, but they’re also working on developing their market as well.”
Burrier says market expansion and infrastructure improvements are important for her bottom line to improve basis and the cash prices she receives for her soybeans.
