Buenos Aires, October 1st. Last week, the Rosario Grain Exchange (BCR) published a shocking inform saying that the soybean crushing industry had a US$674 million over-cost due to the low protein level of the bean. According to the Agriculture Technology National Institute (INTA), the average of the protein content down from 39% at the end of the last century (1997/98) to 35% in the last campaign.
The BCR report explains that between May and July (in the peak of the soybean commercial year) the crushing industry expended an additional US$21 million in energy costs, US$423 million in weight losses due to the extra dry of the bean, and US$230 million due to the discounts applied by importers.
The report says that Argentine soybean has lower protein content than Brazilian and Paraguayan ones and that the importers punish this lower protein content via lower prices.
“As a farmer, I’m focused on reaching the higher yields as possible, because the commercialization standard for soybean doesn’t consider a premium or a penalty in relation with the protein content”, Luis Negrucci, told to eFarmNewsAr.com.
Effectively, the standard only considers grain damage, green beans, or the presence of insects between other factors but not the oil nor the protein content.
Negrucci is a recognized farmer in the heart of the Pampas, based in Venado Tuerto city. He opines that the down in the protein content of the soybean is due to the high potential yield of the new varieties, and the agro-ecological conditions in the productive zones.
“We tested the use of applying nitrogen both to improve yields or/and protein content, but the results were negative”, he added in response to those who say that the lower protein content is due to a bad fertilization program.
“It’s a complex problem”, the president of Acsoja, the soybean value-chain organization, Luis Zubizarreta told to eFarmNewsAr.com. He explains that it’s too difficult to segregate the soybean on a protein content basis. “If you import a cargo (30,000 tons) from Paraguay (where the protein content is higher) it’s relatively easy to segregate the bean, but if you receive trucks with 28 tons each one, it’s impossible, considering the scale of the our industry warehouses”, he added.
Then, it could a change in the commercialization basis be the key to reverse the declining trend in the protein content?
A priori, we think that the incorporation of a minimum oil and protein content, with premium and penalties, could be the solution. But sources in the oilseed industry don’t agree with our point of view.
They say that it’s too difficult to introduce changes in the commercialization basis and that it’s probably that a change in the genetic pulled by the new standard, pushes an improvement in the protein content that just means premium paid by the industry, not discounts.
In fact, it¡s highly probable that importers are already applying a discount to the Argentine soybean in comparison with the US and Brazilian origin. Also, the crushing industry could be moving the discount they are suffering to the price offered to farmers.