US soybean farmers are hoping that Gerhard Schroeder’s predictions made yesterday (7 December) will soon come true. The German chancellor commented that the temporary EU restrictions on meat and bone meal in animal feed could well become a permanent measure in the fight against BSE, and the US industry cannot fail to profit.
The EU currently uses 3m tons of animal remains in farm feed every year, but a sixth month ban on this practise is due to start on 1 January 2001 and farmers will be searching for protein rich alternatives. Fishmeal is too expensive, and while oilseed could be used, soybeans are the most obvious substitute. They are, however, notoriously difficult to grow in European climes.
It is impossible to accurately predict the impact of such regulation on the US soybean industry, but some analysts have suggested that the current exportation of 220m bushels to the EU could increase by up to 25% to cater for increased demand.
Over the last few days, prices for soybeans have rested at their lowest level for nearly two decades in response to a global market glut, but as yet EU interest has not been sufficient to justify reopen plants closed due to lack of demand.
One problem obstructing the build-up of demand may well be the fact that over half US soybeans are genetically modified, and despite the fact the EU government approved them for import two years ago, the current climate in Europe surrounding the GM issue is apprehensive, to say the least.
