Price spikes lead UFOP to call for intensified research on rapeseed, grain legumes
Soybean meal prices in Chicago strengthened considerably over the past several months, leading to a rise in soybean and rapeseed meal prices in the German spot market. At the same time, demand for GMO-free soybean meal was brisk.
Prices for rapeseed meal and especially GMO-free soybean meal increased significantly in the second half of 2020. At the beginning of the crop year in July, GMO-free soybean meal with 48 percent crude protein still cost 456 euros per metric ton FOB Hamburg. Six months later, it was up 146 euros per ton to 602 euros. This translates to a price of 4.60 euros per protein percentage per ton at the beginning of January compared to 3.10 euros at the beginning of July.
The rise was sparked by sharp price increases in Chicago, driven by concerns over drought-related harvest losses in South America. Also, supply of soybean meal in Argentina waned, fueling concerns of potential supply bottlenecks in Germany. Supply in Brazil—the main supplier of GMO-free soybean meal—also tightened, because China literally swept the market over the past several months. Buyers were also seeking GMO-free soybean meal in other countries. As a result, the focus shifted to European produce, such as Danubian soy, which was yet another factor that added to the price rise.
Rapeseed meal has increased 53 euros per ton to 278 euros per ton since the beginning of the crop year. The is the equivalent of 7.93 euros per percentage of protein per ton compared to 6.34 euros at the start of the season. In other words, rapeseed meal gained some competitive advantage against GMO-free soybean meal. The difference in prices for one percentage of protein in the above-mentioned oilseed meals recently amounted to 4.52 euros per ton, compared to 2.89 euros per ton on July 1, and 2.59 euros per ton one year ago.
The Union zur Förderung von Oel- und Proteinpflanzen (UFOP) has drawn attention to the large number of feeding trials the association has been supporting to establish the feed values for the various animal species. The current price development increases the competitiveness of using rapeseed meal as an alternative feed. This especially applies to cattle farming, because the difference in feed value compared to soybean meal only plays a minor role. Feeding trial results have shown that rapeseed meal produces analogous milk yields. The UFOP has said that for this reason, GMO-free rapeseed meal from EU rapeseed is the preferred source of protein for milk and dairy products that carry the green “GMO-free” label.
In view of the potential of rapeseed and, above all, grain legume crop production, UFOP believes that there is considerable substitution potential which, in the case of grain legumes, could be unlocked by intensifying research efforts. The UFOP has emphasized that the use of domestic sources of protein is a key prerequisite for the EU Commission’s “Farm to Fork” strategy and would be part of a deforestation-free value chain based on regional aspects and transparency.