No soy? No problem.
During recent travels to feed mills in Latin America, including Ecuador, El Salvador and the Dominican Republic, I brought up the topic of soy availability in these countries, that are for the most part, non-soy producers. The common response was they import solvent extracted soybean meal, and there are very few, if any soybean extrusion plants. One might conclude from this that there is no opportunity. On the contrary, I see huge potential for soybean extrusion and pressing in these countries. For one, we are talking about two different products with two different profiles. Solvent Extracted SBM has less than 1% oil, and the oil it has is mainly a low-quality soapstock, while ExPress soybean meal, contains a very stable, high-quality oil. Also, because ExPress meal has 6-8% residual oil, no oil needs to be purchased in order to satisfy the requirements of most feed formulations.
Now that we know that we are talking about two different products, let us look at the economics.
Currently, the price of April ’16 soybeans on the Chicago Board of Trade (CBOT) is $354 per metric ton. Crude soybean oil is $748. SBM is $327. The cost of freight of the beans and SBM, depending on volume may vary, but for this exercise, let’s say freight is the same. Therefore, you need to determine your selling cost for ExPress soybean meal and to do this you must consider the 6-8% residual oil value and the increased digestibility of the ExPress meal. After you have your selling price, you can determine your profit before expenses. The next step is to consider inputs, such as electricity and labor costs. These variable expenses can be different from country to country, so you need to determine the cost per kwH and labor cost per ton to determine profitability after expenses
For integrators, we have seen they are looking at the superior quality of the ExPress meal that allows their animals to grow faster and healthier. In simple terms, the animals grow faster and produce more (eggs and milk) often while eating less feed. For Feed Millers, they are looking at cost vs. SBM and pricing it according to the ExPress meal’s relative value as a superior product.
For all of you that live in non-soy producing countries, I challenge you to look at the opportunity, look at the economics, and look to your internal or external customers and see if moving toward extrusion is the answer to increased production and profitability.
