I was recently involved in a discussion about specialty soy proteins in the EU. Suppliers have seen a significant drop in their sales, and they cannot easily comprehend it. They wonder whether this is a chance effect or a permanent trend. Here are the two sides of the argument.
Some believe this drop in demand is because everything has become more expensive. As a result, formulators have dropped the inclusion of specialty soy products in their formulas in favor of less refined but also less expensive protein sources. Here, I will agree that everything has become more expensive. I can attest to that as a consumer and as businessman. The reasons are many and varied and, given the fact that history repeats itself, prices always go up but never down. So, this is again the new norm: Even if some of the temporary reasons disappear, prices will remain on the high(er) spectrum, as always. Nevertheless, I will disagree with the notion that feed formulators have dropped the inclusion level of specialty soy products in order to save on cost. Yes, this might be the case in a few places, but anyone who uses these products knows they are an investment and not an expense. And, among refined protein products for young animals, soy products remain one of the least expensive per unit of protein.
The argument to which I ascribe to is that we have fewer pigs to feed. We see that in every magazine and newsletter. The EU pig herd continues to shrink and there is no obvious incentives in the near future for this fact to be reversed. Yes, prices and margins for pork are good, but this is because demand remains strong, while supply is very tight. In general, the EU is not actively supporting an expansion of meat production – for its own reasons. This fact, along with the increased weaning age, is why specialty soy products are experiencing a persistent drop in their sales.