Challenges ahead for oilseed industry
The oilseed industry faces an array of challenges in the coming months, says Sandy Scripter, a Cargill crush bean and meal merchandiser who spoke to the Kansas Soybean Expo in Topeka on Jan. 9.
Scripter says threats to animal agriculture from animal rights activists, consumer acceptance of biotechnology, the expansion of free trade and environmental regulation are chief among those challenges.
On the regulatory front, the industry is looking at U.S. Food and Drug Administration rule-making on the Food Safety Modernization Act; ongoing U.S. Environmental Protection Agency review of sources of air pollution, including grain storage elevators; at Occupational Safety and Health Administration regulation of dust in grain handling and processing; and potential EPA regulations on greenhouse gas emissions, ambient air-quality standards and boiler emissions.
• A Cargill merchandiser outlines challenges to the oilseed industry.
• Regulatory pressures create concern for this industry.
• Strong export demand and weak dollar mean fewer beans available to processors.
“All of these have the potential to have an impact on the demand for soybeans and the price,” she said.
In terms of economic pressure, Scripter said a growing use of dried distillers grains competes strongly with soybean meal in the animal feed market. Growth of the soybean in South America also puts pressure on U.S. markets, she said, while dietary concerns, particularly about trans fats, makes manufacturers wary of soybean oil.
In addition, a weak dollar means an advantage to exports markets, she said, which is good for farm prices but means there are fewer soybeans available to processors in the United States. She sees little to no growth in the feed industry as high soybean prices reduce demand.
“Erratic market prices also increase the risk for soybean buyers,” she said.
Scripter also talked briefly about the size and scope of Cargill’s operations in Kansas. The company operates seven business units in 32 Kansas locations.
Operations include two soybean crush plants, one in Wichita and one in Kansas City, as well as a biodiesel plant in Kansas City. Cargill AgHorizons has 10 locations around the state. Cargill Meat Solutions has world headquarters in Wichita and eight locations around the state. Cargill Salt is in three locations, as is Cargill Horizon Milling.
The Cargill dressing, sauces and oils business operates out of Wichita, while Cargill Animal Nutrition has three locations.
In addition, the company is involved in three joint ventures and has direct business collaborations between AgHorizons and the crushing plants that allows farmers to get Cargill bids on all their grain contracts with a single phone call.
This article published in the February, 2013 edition of KANSAS FARMER.