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Non-GMO soy used
for animal feeding–
Outlook in Hungary
Ildiko Tikasz, Ph.D.
Budapest, 17th of September, 2015.
CONTENT
Animal feed production in Hungary2
Animal feeding in Hungary3
Opportunities for the use of non-GMO feed4
Soybean production potentialsin Hungary
5
Soy value chainchallanges and opportunities1
Soybean supply chain
Large soy
farmers
Small and
medium (family)
farmers
Co-operativesCrusher/
traderShipper
Feed
industry
Food
industry
Fuel
blender
Animal
processing
industry
Livestock
industry Retail Consumers
Soy oil
Soy meal
Refined soy oil
Source: KPMG
Feed industryGlobalization of feed tradeChallanges of competitiveness
Key of success (quality, safetyness, effectiveness)
Quality (ethical quality – non-GMO products)
Safety (care against toxins, antinutrients, causative agents in the
digestive tract)
Effectiveness (feed efficiency, maximizing productivity, stabilizing
the immune system)
Profitability (profit maximization with alternative commodities and
feed supplements)
Feed recipesNutrient requirements set to age and performance level
(computer models, researches)
Livestock industry
Profit maximization Through feeding adapted to given circumstances
Feeding based on right recipes
Developing feed value calculators Poultry – energy-, phosphorus- and protein amino acid value calculator
Improving technologies used in livestock breeding
Put genetic research and innovations into practice
Improve the base of selective breeding, homogeneus
population
Knowledge transfer
Constitution (2011) – ensures the possibility of creating the raw material
demand of non-GMO protein base
Donau Soya (2012)
Challenges Research – feasibility of objectives, developing monitoring system
Creating environmental conditions of motivation set to goal systems Call in the actors of soy value chain
Call in NGOs (international organizations as well)
Adapting foreign examples of cooperation in the value chain
Preparing ‚Practitioner’s Guide’ for actors of value chain to achieve goals
Financing R+D
Facts
Magyar Szója Nonprofit Kft. (2012) – KNOWLEDGE TRANSFER (technical
publications, crop demonstrations)
Non-GMO Association – (since 2015 – 11 members) Motivating the consumption
of non-GMO foodstuffs, increasing competitiveness in the domestic as well as the foreign
markets
Non-GMO standards/trademarks (2015)
Universities, research institutes Supporting soy breeding programs – production safety, increasing yields
Increasing the production and processing of alternative protein plants
Building in new fodders into feed recipes
Government and Non-Government Organizations (NGOs)1
Global demand for soy set to soar
Soy faces sustainability challenges
The GMO issue
Certification makes business sense for
producers (non-GMO premium: 25-30% of GMO
soybean meal)
Barriers to certified soy
Need for collaborative approach (producers +
end users + traders+ processors + investors + certification
bodies + government + consumers)
Voluntary standards –Importance, challenge and opportunities
1
Voluntary Sustainability Standards (VSS)
at the global market (2013)1
VSS
production
(mt)
VSS
production
market share
of global
produciont
VSS
production
market share
of global
exports
VSS sales
(mt)
VSS sales
market share
of global
production
VSS sales
market share
of global
exports
Organic 599,3 0% 0% 326,8 0% 0%
ProTerra 3411,3 1% 2% 1432,7 1% 1%
RTRS (non-GMO) 959,5 0% 1% 335,5 0% 0%
Global VSS
production/sales4970,0 2% 3% 2100,0 1% 1%
Source: SSI, DS
European countries committed to the use
of sustainable & non-GMO soybean1
Country Sector Goals Time period
FRMilk production
Focus onsustainable supply for all raw
materials
100% RTRS 2015
NL Feed&food 100% RTRS soy 2015
BE Feed industry 100% RTRS soy 2015
DK Milk production (ARLA)Sustainable soy clearly on the table
(RTRS has negative image)2015-2020
DEPoultry production
Milk production
100% non-GMO soy by private-label products
(direction ISCC+, ProTerra)
2015
2016
UKSainsbury’s
Waitrose
(eggs, poultry, beef, lamb)
Strong commitment towards sustainable soy
100% RTRS2015
SWEMilk, beef, eggs, pig,
poultry100% RTRS, ProTerra
2008-2011
2014
FI Feed&food 100% sustainable soy 2015
CHE Feed&food93% non-GMO (ProTerra, BioSuisse, DS,
RTRS – non GM modul)2009
ATEgg, poultry, milk (80-
100%), pig (<5%,
increasing)
100% DS soy 2014
HU Milk production? 100% non-GMO soy 2016?
Compound feed production – production value 10% within the food industry (2014)
Turnover: 274 billion HUF – 174 billion HUF (livestock feed) + 100 billion HUF (pet food)
Pet food – growing importance – export sales +23%, domestic sales +17% (2014 vs. 2013)
Number of feed producers 480 (600-700 plants)– Number of producers selling compound feed on the market ca. 180
– Surplus capacity – utilization: max 40%
– Production per unit is low – 21 000 tons/unit/year(EU-average: 40 000 tons/unit/year)
Livestock feed production - not export oriented– 80% of output sold on domestic market
– exports 147 mio EUR (RO, SK, RUS – ¾ of revenue)
Animal feed production2
Industrial compound feed productionin Hungary (2005-2014)
2
Sectors 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Cattle 558 552 540 535 530 505 530 530 570 565
Pigs 1 980 2 039 1 780 1 690 1 580 1 490 1 410 1 380 1 350 1 345
Poultry 1 771 1 683 1 650 1 720 1 755 1 680 1 660 1 640 1 520 1 565
Dry pet food 0 0 0 0 0 : 450 450 450 500
Others 191 182 180 180 205 195 180 170 160 160
TOTAL 4 500 4 456 4 150 4 125 4 070 3 870 4 230 4 170 4 050 4 135
1 000 t
Source: HGFA
Source: HGFA
Full-fat soybean
Total production capacity: approx. 140 000 t/year
production: increased 2,5 times 2014 vs. 2010
commodity partly imported (SK, UA, RO)
sold inland to livestock breeders
exports: 10-30% (PL, RO, AT, SK)Extruded soybean
Total capacity: approx. 40 000 t/year
Exturders by compound feed mixers and
livestock breeder as well
Extruder with 800 kg/h capacity: 20-25 pieces
Extruder with 500 kg/h capacity: 8-10 pieces
Not working extruder: 20-30 pieces
Dry extrusion – the most common (cheaper)
Investment cost: 5-7 mio HUF
Production cost: 15-25 HUF/kg full-fat soya
Crushing
Extraction process
Crashing capacity (Komárom): 100-150 000 t/year (crushes 35-40 thsnd tons of bean)
Plant in Foktő - crashing capacity: 200 thousand t/year (does not crush soybean)
Deviding the processing of GM and non-GM commodity
Hydrothermal treatment is dominant
The greatest processing plants (4-5
plants, capacity: 90-120 thousand t/year
Soybean crushing capacities2
Source: HCSO
Livestock population3
708 702 705 701 700
682697
760
782
802
620
640
660
680
700
720
740
760
780
800
820
10
00
he
ad
s
41,1
39,7
38,3
39,740,3
42,2
41,5
38,2
37,2
42,5
34,0
35,0
36,0
37,0
38,0
39,0
40,0
41,0
42,0
43,0
Mio
he
ad
s
3,85 3,99 3,87
3,38 3,25 3,17 3,04 2,99 3,00 3,14
0,00
0,50
1,00
1,50
2,00
2,50
3,00
3,50
4,00
4,50
Mio
he
ad
s
-1% vs 2010
+1% vs 2010
+18% vs 2010
Denomination 2010 2011 2012 2013 2014 2014/2010
Soybean - production
(without seed) 76 102 87 738 62 446 71 856 103 640 136,2 %
- imports 14 101 31 741 29 785 49 798 84 885 601,0%
- exports 30 829 48 444 58 000 38 016 43 718 141,8%
Soybean - crushing 59 374 71 035 34 231 83 638 144 807 243,9%
Quantity of extruded soy
+ full-fat soy + soybean
meal 59 374 71 035 34 231 78 638 136 057 229,2%
Soybean meal - imports 692 217 672 392 616 209 503 534 456 938 66,0%
Soybean meal - exports 29 120 13 324 13 837 39 290 63 892 219,4%
Total demand of extruded
soya + full-fat soya +
soybean meal 722 471 730 103 636 603 542 882 529 103 73,2%
Source: HCSO, RIAE
tons
Hungary’s demand of soybean meal, extruded
and full-fat soy (2010-2014)3
Feed efficiency3
Egg production - Feed conversion ratio (2012) kg/kg
NL FR ES IT UK PL DK EU HU
2,01 2,13 2,07 2,02 2,15 2,12 1,99 2,07 2,10
Source: [ 392, LEI Wageningen 2012 ]
Broiler production - Feed conversion ratio (2012) kg/kg
NL DE FR UK IT ES DK PL HU
1,67 1,68 1,75 1,75 1,85 1,95 1,65 1,76 1,81Source: [ LEI Wageningen - Competitiveness of the EU poultry meat sector ]
Pig production - Feed conversion ratio (2013) kg/kg
DE NL DK HU
2,84 2,6 2,68 3,33
Source: BPEX, AKI FADN
Costs of feeding: 70% of total production costs!
Egg: HU +5% feed vs DK
Broiler: HU +9% feed vs DK
Costs of feeding: 50% of total production costs!
HU: +30% feed vs NL
+17 % vs. DE
The demand of soybean meal, extruded and full-fat soy
in the feed of the different livestock sectors (2014)4
206
49
103
21
52
16
52
12
15
4
0
50
100
150
200
250
300
350
400
450
Soybean meal Full-fat and
extruded soya
tho
usa
nd
to
ns
Others
Petfood production
Beef and other
ruminants production
Pork production
Poultry production
Livestock sectors
Total of
soybean
products
Soybean
demand
Poultry production 255 000 307 000
Pig production 124 000 150 000
Cattle & other
ruminants prod. 68 000 81 000
Petfood production 64 000 77 000
Others 19 000 23 000
Total 530 000 637 000
tons
Source: Hungarian Grain and Feed Association, AKI
∑428
∑102
Agricultural land area required to satisfy
Hungary’s need for soybean production4
Livestock sectors
Annual
soybean
demand,
2014
(tons)
Area ensuring annual soybean demand
(hectares)
2,6
tons/hectares
2,86
tons/hectares
3,15
tons/hectares
2014 2020 2025
Poultry
production 307 000 118 077 107 343 97 460
Pig production 150 000 57 692 52 448 47 619
Cattle & other
ruminants prod. 81 000 31 154 28 322 25 714
Petfood
production 77 000 29 615 26923 24 444
Others 23 000 8 846 8 042 7 302
Total 637 000 245 000 222 727 202 222
Source: Hungarian Grain and Feed Association, AKI
Agricultural land area required in the case of
changing livestock inventories according to
pig strategy (2013-2025)
4
3 mio
heads6 mio
heads8,5 mio
heads
2,6 t/ha
637 000 t
2,86 t/ha 2,86 t/ha 3,15 t/ha
787 000 t 912 000 t 912 000 t
245 000 ha 275 000 ha 319 000 ha 290 000 ha
8,5 mio
heads
Source: AKI
Hungary’s soybean production –
position in the EU-28 (2015)5
2011 2012 2013 2014 2015
IT 166,0 153,0 184,5 232,9 320,0
RO 73,8 77,9 67,4 79,5 105,0
FR 41,6 37,5 43,0 75,8 94,0
HR 58,9 54,1 47,2 47,1 41,0
AT 38,1 37,1 42,0 43,8 48,0
HU 41,0 40,9 42,3 42,9 77,5
TR 26,0 32,0 43,0 34,0
SK 19,7 21,9 29,2 33,2
CZ 7,6 5,7 6,5 7,2
2010 2011 2012 2013 2014
IT 552,5 564,6 422,1 624,8 933,1
FR 136,7 122,5 104,2 110,3 223,2
RO 146,1 155,9 104,3 149,9 203,3
TR 87,0 102,0 122,0 180,0 150,0
HR 153,6 147,3 96,7 111,3 131,1
AT 94,5 109,4 104,1 82,8 118,1
HU 85,4 95,0 67,7 78,8 114,1
SK 24,0 36,9 41,8 39,6 83,9
CZ 16,1 17,9 13,1 13,5 16,5
Area: 1000 hectares
Production: 1000 tonnes
European region (2015)
SRB: 0,2 mio ha (+5%) 0,52 mio t
UKR: 2,12 mio ha (+18%) 4,4 mio t
RUS: 1,95 mio ha (+2%) 2,7 mio t
EU-28 soybean: 770 000 ha (+26%)
2,12 mio t (+13%)
The development of the Hungarian soybean production5
Source: AKI, MKR
Year
Low yield Medium yield High yield
Soya
≤ 2 t/ha
Corn
≤ 4,5 t/ha
Soya
2-3 t/ha
Corn
4,5-7,5 t/ha
Soya
>3 t/ha
Corn
>7,5 t/ha
2011 53% 33% 33% 42% 14% 25%
2014 36% 19% 38% 34% 25% 48%
Proportion of farms cultivating soya
The development of the Hungarian soybean production5
YearLow yield Medium yield High yield
Area Prod. Area Prod. Area Prod.
2011 45% 27% 40% 47% 15% 26%
2014 26% 13% 44% 44% 31% 43%
Source: AKI, MKR
Gross margin of soybean compared with
benchmark crops5
0
50
100
150
200
250
300
350
400
Wheat Corn Sunflowerseed Rapeseed Soybean
10
00
HU
F/h
ecta
res
Average of 2010-2014
Gross output (without subsidies) SAPS Total costs
0
100
200
300
400
500
Wheat Corn Sunflowerseed Rapeseed Soybean
10
00
HU
F/h
ecta
res
2014*
Gross output (without subsidies) SAPS Total costs
Gross margin:
Soybean: 21 340 HUF/ha
Rapeseed: 64 926 HUF/ha
Sunseed: 45 771 HUF/ha
Corn: 67 754 HUF/ha
Wheat: 30 919 HUF/ha
Gross margin:
Soybean: 47 619 HUF/ha
Rapeseed: 78 007 HUF/ha
Sunseed: 31 871 HUF/ha
Corn: 77 727 HUF/ha
Wheat: 30 349 HUF/ha
Source: AKI, FADN
* Unconsolidated data
Area potential
700-800 thousand hectares according to
USA model (Soybean - corn ratio in crop structure – USA 1:1,5
HU 1:31)
102 thousand hectares according to
analysis based on production regions(based on Kurnik-Szabó)
Soybean production potential in Hungary5
Improving profitability
Improving production levelVolatility of soybean yields = volatility of corn yields
Increasing production stability– Using species and maturity class adapted to production area
– Soil preparation
– Racionalization of fertilization
– Optimizing row spacing and plant-to-plant distance (precision sowing –drill-investment)
– Reducing pesticide use – to prevent depressive effect: cultivator (3x!)
Increasing nutrient content (pro-fat)
Soybean production potential in Hungary5
Consultancy
Price premium of non-GMO soybean meal5
Price premium of non-GMO soy in Hungary (2014)5
Soybean production: 104 000 t60 000 t for processing
44 000 t exports
HU demand: 530 000 tons (soybean meal + full fat)
€=308 HUF
54 000 t full fat + ca. 5 000 t meal
„Hungarian non-GMO”476 000 t soybean meal
Meal premium: 40 €/t
Meal premium: 40 €/t
Σ premium: 19,04 mio €
5 864 mio HUFΣ premium: 2,16 mio €
665,3 mio HUF
Exports: ca. 0-5000 t meal+full
fat
ca. 54 000 t HU non-GMO full fat
Price premium of non-GMO soy in Hungary (2015) I.5
Soybean production: ca. 150 000 tca. 90 000 t for processing
ca. 60 000 t exports
HU demand: 530 000 tons (soybean meal + full fat)
€=314 HUF
ca. 84 000 t full fat+ ca. 5 000 t meal
„Hungarian non-GMO” 446 000 t soybean meal
Meal premium: 50 €/t
Meal premium: 50 €/tΣ premium: 22,3 mio €
7 002 mio HUFΣ premium: 4,2 mio €
1 319 mio HUF
70 000 ha
Exports: 0-5000 t meal + full fat
ca. 84 000 t HU non-GMO full fat
Price premium of non-GMO soy in Hungary (2015) II.5
Soybean production: ca. 150 000 tca. 150 000 t for processing
0 t exports
HU demand: 530 000 tons (soybean meal + full fat)
€=314 HUF
ca.144 000 t full fat + 5000 t meal
„Hungarian non-GMO”
381 000 t soybean meal
Meal premium: 50 €/t
Meal premium: 50 €/tΣ premium: 19,1 mio €
5 982 mio HUFΣ premium: 7,5 mio €
2 339 mio HUF
70 000 ha
Exports: 0 t meal+full fat
Price premium of non-GMO soy in Hungary (2020)5
Soybean production: ca. 286 000 tca. 170 000 t for processing
ca. 116 000 t exports
HU demand: 787 000 tons (soybean!)
€=330 HUF
ca. 157 500 t full fat + ca. 10 000 t meal
„Hungarian non-GMO”
617 000 t soybean
493 600 t soybean meal + 10 000 t (instead of the exported meal)
Meal premium: 80 €/t Meal premium: 80 €/t
Σ premium: 40,3 mio €
13 295 mio HUF
Σ premium: 12,6 mio €
4 158 mio HUF
100 000 ha; 2,86 t/ha; pigs: 6 mio heads (strategy!!)
Exports: ca. 10 000 t meal
ca. 157 500 t HU non GMO full fat503 600 t soybean meal
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 devided within the value chain?
livestock
keeper
food
industry
retail
chainsconsumer
feed
industrytraderproducer
Thank you for your attention!
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