Soy growers, NBB express concerns over supply chain—but not soy oil supplies

As the House Agriculture Committee hearing on The Immediate Challenges to Our Nation’s Food Supply Chain convenes Nov. 3, producers, processors, and users of soy are expressing their concerns over recent issues ranging from labor shortages to shipping woes. They’re also expressing what they’re not concerned about: soy oil supplies.

Food industry groups have waged claims that there’s a crunch on the supply of soy oil available when soy is crushed—and that foodservice cannot get enough edible oil for cooking because, those groups say, oil is being diverted to biodiesel and a burgeoning renewable diesel market.

In a recent editorial, American Soybean Association CEO Stephen Censky was clear: There is no cause for alarm; 86 million acres of soy are currently being harvested—and a projected record 4.4 billion bushels. Likewise, processors are gearing up to process more soy and assure adequate soy oil is available for food, feed and fuel: At least seven new oilseed processing plants are under development, and soybean oil production by the domestic processing industry is projected by USDA to reach a record level this year—on top of a 26 percent growth in supply over the last 10 years. In short, Censky said, the markets are responding to the new demands.

The National Biodiesel Board agrees, stating that new demand is sending the right market signals to both soybean farmers and soybean crushers, leading to increased value for farmers, processors, and rural economies, which in turn leads to more protein for livestock production and oil for food manufacturers.

Both NBB and ASA also have concerns that pinning inflationary pressures impacting the food and agriculture sector across all cost categories on renewable fuels expansion could affect support of the Renewable Fuel Standard.

“Biodiesel and renewable diesel production consistently support 13 percent of the value of every U.S. soybean bushel,” said NBB CEO Donnell Rehagen. “Sustainable growth in our industry is also supporting new investments in domestic soybean-crush capacity, which will translate into additional value for U.S. farmers and rural economies. A misguided attack on the Renewable Fuel Standard will simply undercut a valuable, stable market for the record harvest that soybean growers are achieving this year.”

In 2020, biodiesel production added close to $6 billion in U.S. farmers’ return on soybeans. And, biodiesel does not solely support farmers. The industry has a $17 billion economic impact and supports 65,000 American jobs.

“There is currently not a soy oil supply shortage, nor is one envisioned by year-end, but there are in fact very real supply-chain challenges impacting U.S. agriculture,” said Kevin Scott, soy grower from Valley Springs, South Dakota, and ASA president. “We greatly appreciate the committee’s attention to these genuine issues and how to address them. Likewise, we hope the administration will demonstrate the commitment to biofuels and the RFS it has pledged despite these shortage rumors.”

The chief executive officers of more than a dozen agriculture groups recently identified the key supply issues affecting agriculture and related industries. Those concerns include labor, barge shipments, ports and shipping containers, trucking and rail freight, fertilizer, chemical inputs, energy, equipment and parts, and water availability. Read their full letter filed Oct. 18 with the Department of Transportation for submission to the White House Supply Chain Task Force.

Soybeans and all agricultural commodities rely on a multimodal network to move product to market. As such, a strong supply chain built on reliable infrastructure systems represents the largest advantage for American soybean farmers over competitors in Brazil and Argentina. Recent supply-chain challenges related to transportation and infrastructure, input supply, and labor continue to negatively impact soybean growers and the agricultural industry as a whole.