Perspectives of non-gm soybean based value chains in Hungary s livestock industries Dr. Ildiko TIKASZ Budapest, 24-25. November, 2016.
CONTENT SOYA FARMS PRODUCTION PROCESSING TRANSPORT/ TRADE/ DISTRIBUTION ELEVATORS / STORAGE CRUSHING FACILITIES SOYA MEAL SOYA OIL EXPORT/ TRADERS EXPORT/ TRADERS MANUFACTURING SOYA MEAL PROCESSORS REFINERS & PROCESSORS FEED PRODUCERS/ LIVESTOCK INDUSTRY CHEMICAL & FOOD INDUSTRIES CHIMICAL, FOOD & PERSONAL CARE INDUSTRIES BIOFUELS INDUSTRY RETAIL/CONSUMPTION Dairy and meat Proteins, flour, cereals, cosmetics, plastics, paint, etc. Fats, margarines, cooking oil, shortenings, lecithin, detergents, ect. Biodiesel Source: Rautner et al., 2013 Global soy supply chain
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* 1000 hectares/tonnes tonnes/hectare Hungary s soybean production 190 170 150 EU: 836 kha 2.76 t/ha 2305 kt (2016) IT: 297 kha - 3.43 t/ha FR: 141 kha 2.66 t/ha RO: 121 kha 2.13 t/ha 2,96 181 3,5 3,0 130 2,5 110 90 70 50 30 10-10 72 61 2,0 1,5 1,0 0,5 0,0 Area Production Yield Source: Tallage, KSH, *NAK
The performance of the Hungarian soybean production Share of soybean area, soybean production and the number of farms cultivating soya Low yield Medium yield High yield Year 2 t/ha 2-3 t/ha >3 t/ha Farms Area Prod. Farms Area Prod. Farms Area Prod. 2014 36% 26% 13% 38% 44% 44% 25% 31% 43% 2015 57% 47% 31% 33% 36% 45% 10% 17% 24% 2014 good year : 2,69 t/ha (HU average yield) 2015 bad year : 2,03 (HU average yield) Source: AKI, MKR
EUR/hectare EUR/hectare Net income of soybean production compared with benchmark crops 1400 1200 1000 800 600 400 200 0 Average of 2010-2014 Wheat Maize Sunflower seed Revenue SAPS Production costs Rapeseed Net income (without SAPS+VCS): Sunseed: 207 EUR/ha (79 EUR/t) Rapeseed: 156 EUR/ha (57 EUR/t) Wheat: 144 EUR/ha (26 EUR/t) Corn: 50 EUR/ha (8 EUR/t) Soybean: -147 EUR/ha (-68 EUR/t) Low: -290 EUR/ha; High: 272 EUR/ha Soybean 1 400 1 200 1 000 800 600 400 200 0 Source: AKI, FADN Net income (without SAPS): 1. Corn: 233 EUR/ha (35 EUR/t) 2. Rapeseed: 223 EUR/ha (87 EUR/t) 3. Sunseed: 158 EUR/ha (65 EUR/t) 4. Wheat: 106 EUR/ha (25 EUR/t) 5. Soybean: 73 EUR/ha (32 EUR/t) Low: -135 EUR/ha; High: 330 EUR/ha 2015 Wheat Maize Sunflower seed Rapeseed Soybean Revenue SAPS Voluntary coupled support Production costs
Hungary s demand for soybean meal, extruded and full-fat soy* (2011-2015) Denomination 2011 2012 2013 2014 2015 2015/2011 Soybean - production (without seed) Imports (with seed) 87,738 62,446 71,856 103,640 141,737 150.1% 31,741 29,785 49,798 80,136 68,449 215.6% Exports (with seed) 48,444 58,000 38,016 37,412 55,870 115.3% Soybean - crushing 71,035 34,231 83,638 146,364 154,316 203.2% Quantity of extruded soy + full-fat soy + soybean meal tonnes 71,035 34,231 78,638 140,364 144,916 186.3% Soybean meal imports Soybean meal exports Total demand of extruded soya + full-fat soya + soybean meal 672,392 616,209 503,534 454,446 468,792 69.7% 13,324 13,837 39,290 63,793 90,452 678.9% 730,103 636,603 542,882 531,017 523,256 69.9% *balance based on trade statistics of KSH! Source: KSH, MKR, own calculation
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 3,58 3,70 3,61 3,15 3,02 2,95 2,83 2,79 2,81 2,94 2,93 Mio heads 1000 heads mio heads 1000 tonnes Sectors 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cattle 558 552 540 535 530 505 530 530 570 600 600 Pigs 1,980 2,039 1,780 1,690 1,580 1,490 1,410 1,380 1,350 1,350 1,400 Poultry 1,771 1,683 1,650 1,720 1,755 1,680 1,660 1,640 1,520 1,600 1,650 Dry pet food 0 0 0 0 0 : 450 450 450 500 500 Others 191 182 180 180 205 195 180 170 160 160 150 TOTAL 4,500 4,456 4,150 4,125 4,070 3,870 4,230 4,170 4,050 4,210 4,300 Source: HGFA 0,28 0,29 0,26 Industrial compound feed production in Hungary (2005-2015) 0,23 0,23 0,22 0,21 0,20 0,19 0,20 0,20 708 760 702 705 782 802 821 701 700 682 697 198 207 210 209 237 227 226 226 211 193 197 141 138 149 159 97 94 96 98 101 116 132 421 374 381 382 377 388 437 443 453 373 368 Livestock in Hungary (at 1 December) 41 40 38 40 40 42 42 39 38 39 40 Pig Sow Beef Cow Dairy cow Poultry Source: KSH
1000 tonnes 500 450 400 350 300 250 200 150 100 50 0 462 15 20 27 121 279 Soybean meal The demand of soybean meal, extruded and full-fat soy in the feed of the different livestock sectors (2015) Others Petfood Beef and other ruminants Pig Poultry 80 22 45 5 8 Full-fat soybean (protected too) Livestock sectors Total of full fat soybean +soybean meal tonnes Soybean demand (soybean eqv.) Poultry production 323,759 393,386 Broilers 184,336 224,530 Laying hens 41,054 50,705 Ducks 20,503 23,943 Geese 7,421 9,198 Turkeys 70,446 85,009 Pig production 143,441 173,808 Cattle & other rumin. prod. 34,857 41,570 Petfood production 19,771 23,521 Others 20,000 25,000 Total 541,827 657,284 Source: AKI statistical survey, Hungarian Grain and Feed Association
Agricultural land area required to satisfy the need of the different livestock sectors for soybean production in Hungary Livestock sectors Annual soybean demand (tonnes) 2015 Area ensuring annual soybean demand (hectares) 2.56 t/ha 2014-2016 average 2.03 t/ha 2.96 t/ha 2.13 t/ha 2015 2016 2020 3.11 t/ha Poultry production 393,386 153,666 193,786 132,901 184,688 126,491 Broilers 224,530 87,707 110,606 75,855 105,413 72,196 Laying hens 50,705 19,807 24,978 17,130 23,805 16,304 Ducks 23,943 9,353 11,795 8,089 11,241 7,699 Geese 9,198 3,593 4,531 3,107 4,318 2,958 Turkeys 85,009 33,207 41,876 28,719 39,910 27,334 Pig production 173,808 67,894 85,620 58,719 81,600 55,887 Cattle & other ruminants prod. 41,570 16,238 20,478 14,044 19,516 13,367 Petfood production 23,521 9,188 11,587 7,946 11,043 7,563 Others 25,000 9,766 12,315 8,446 11,737 8,039 Total 657,284 256,752 323,785 222,055 308,584 211,345 Source: AKI statistical survey, Hungarian Grain and Feed Association
Soybean production potential in Hungary Real area potential (~100 thousand ha) Improving production level Volatility of soybean yields = volatility of corn yields Increasing production stability Using varieties and maturity class adapted to production area Soil preparation Rationalization of fertilization Optimizing row spacing and plant-to-plant distance (precision sowing drillinvestment) Reducing pesticide use to prevent depressive effect: cultivator (3x!) Increasing nutrient content (pro-fat) Consultancy
Source: Tillie and Rodríguez-Cerezo (2015) Price premium of non-gmo soybean meal
Estimated price premium of non-gmo soy in Hungary (2015) Harvested area 72,000 ha Production (without seed) 132,000 t 95,000 t for processing (without import!) 37,000 t for export Import Soybean meal + full fat demand 542 000 tonnes Own production ~465,000 t soybean meal 67,000 t full fat + 22,400 t meal Export: 12,400 t soybean meal Meal premium: 50 /t =309 HUF 77,000 t non-gmo full fat+meal 23.3 mio EUR (7,184 mio HUF) Non-GMO premium 3.85 mio EUR (1,190 mio HUF) Non-GMO premium
Estimated price premium driven extra costs of using non-gmo soy in livestock feeds in Hungary (2015) Livestock sectors Annual soybean meal demand tonnes Non-GMO import premium mio EUR (mio HUF) Costs of non-gmo premium (import) EUR/animal (HUF/animal) EUR/kg live weight (HUF/kg lw) Non-GMO premium impact on livestock production feed costs costs % % Poultry production 278,506 14.0 (4332) 0.04 (12) 0.01 (3) 0.66 0.36 Broilers 160,775 8.1 (2501) 0.05 (14) 0.02 (6) 3.58 2.39 Laying hens 38,606 1.9 (601) 0.18 (56) 0.08 (23) 1.79 0.93 Ducks 13,762 0.7 (214) 0.02 (7) 0.01 (2) 1.17 0.67 Geese 7,111 0.4 (111) 0.13 (41) 0.02 (7) 3.06 1.48 Turkeys 58,252 2.9 (906) 0.36 (110) 0.03 (8) 3.35 2.06 Pig production 121,469 6.1 (1890) 0.97 (298) 0.01 (3) 1.46 0.65 Cattle & other ruminants prod. 26,853 1.4 (418) 0.002 (1) 0.000003 (0) 0.0003 0.0001 Petfood production 20,000 1.0 (311) - - - - Others 15,000 0.8 (233) - - - - Total ~461,827 23.3 (7184) - - - -
Producer Trader Feed industry Livstock keeper Food industry Retail chains Consumer Who will pay the costs of the premium? Who will assure the quality of the standard, and who will controll it? How high is the premium at soybean, full-fat/meal and non-gmo food - that can be realized on the export- or domestic markets? How will the profit be divided within the value chain?
Thank you for your attention! Dr. TIKÁSZ Ildikó Edit Agrárközgazdasági Kutatások Osztálya Agricultural Economics Research Department (+36 1) 476-6090 tikaszie@aki.gov.hu