Potential Shortage of Animal Feed Protein Supplies in the EU


The Agriculture Commissioner for the EU, Mariann Fischer Boel, recently warned at an EU Commission meeting that a shortage of soybean meal for animal feed could add to financial problems for EU livestock producers. This summer small amounts of a biotech corn approved in the U.S., but not in the EU, were found in soybean meal imports from the U.S. Since the EU has a zero tolerance for non-approved biotech products, about 200,000 metric tons of U.S. soybean meal have been withheld from the market and traders are indicating that imports from the U.S. may be stopped until the issue is resolved. This is not a new issue for EU countries.

An August 2009 report “GM Crops and Foods: Follow-up to the Food Matters Report by DEFRA and the FSA” from the United Kingdom government raised concerns about the slow rate of approval of biotech crops by the EU, the zero tolerance for non-approved biotech products and the effectiveness of government regulations if supplies of non-biotech products are limited. The greatest immediate concern was importing soybean meal to feed livestock and poultry as discussed at the EU Commission meeting. Over 90 percent of the 0.8 million metric tons of soybeans and 2.2 million metric tons of soybean meal imported by the UK in 2007/08 came from Argentina and Brazil. Argentina has been over 90 percent biotech soybeans for years and Brazil is now at 65 percent and increasing. In recent years, Brazil has been the source of non-biotech products at a premium of $5-80 per metric ton, but there is concern about availability at any price.

The slow approval of biotech products in the EU has lead to what is known as asynchronous approval where a product is approved in the U.S., but not in the EU. The UK experienced that in 2006/07 when the U.S. approved a new corn biotech event before the EU and corn gluten feed imports declined from 609,000 metric tons in 2002 to 43,000 metric tons in 2007 at considerable cost to feed users. The issue is further complicated by the European Food Safety Agency determination that the biotech corn event currently at issue is safe, but is not “politically approved” as Commissioner Boel referred to it recently on her blog.

The zero tolerance of non-approved products is a much bigger issue. The report notes, “Testing methods are sensitive enough to detect very low levels of GM presence if they are present in a sample, and in practice it is not possible to guarantee that a ship’s hold will be completely free of material that was transported prior to the current cargo.” The authors note that one solution is to adopt a tolerance level rather than a zero tolerance. This will be complicated by organic livestock producers being required to use non-biotech feed and there being a market for conventionally raised poultry fed non-biotech feed.

The challenges ahead are made clear in a European Commission Joint Research Center report “The Global Pipeline of New GM Crops- Implications of Asynchronous Approval for International Trade” referenced in the UK report. This analysis looked at the short-term pipeline (2-3 years) and the medium-term pipeline (7-8 years) for new biotech products. There are about 30 commercial biotech events planted worldwide today; by 2015 there will be over 120. Soybeans will go from one event today to 17 by 2015; corn from nine to 24; cotton 12 to 27; and rice from zero to 15 events. “Stacked” events will add to the regulatory and compliance burden. In 2015 about half the commercial biotech events in crops are expected to come from national technology providers in Asia and Latin America for products designed for domestic agricultural markets, referred to as “isolated foreign approvals,” including biotech soybeans from China. These are not likely to be submitted to the EU or other importers for approval.

This leads to the third issue of how to maintain regulatory enforcement and public confidence. The cost of testing for biotech events is expensive and leads to a limited number of samples taken. Routine testing for stacked gene events are particularly difficult because of cost and time constraints. Most enforcement is taken in response to a specific incident. Zero tolerance is almost impossible to achieve, but allowing for a tolerance like 0.9 percent is seen as not meeting the needs of consumers who want the zero tolerance. Consumers appear to be unaware of the difficulties of acquiring soybean meal with a zero tolerance.

If the EU report estimate of the biotech pipeline to 2015 is even close to right, and there is no reason to believe it isn’t, the regulatory problems are going to rapidly multiply. All importing countries, including the U.S., need to make plans to deal with “isolated foreign approvals” that could enter the marketplace. While most of the new biotech events will be the traditional crops like corn, soybean, rapeseed and cotton, the EU report also noted seven biotech events in potatoes compared to none now, 15 events in rice compared to none now and 23 events in minor crops compared to seven now. The EU has already crossed one hurtle by approving imports of Roundup Ready 2 soybeans produced in the U.S. that were planted in 2009.

Commissioner Boel considers this a basic issue of the EU not producing enough oilseed meals to provide protein required for EU livestock and poultry production and needing to import supplies from the U.S., Brazil and Argentina who are more open to the use of crop biotechnology. Boel said, “…it’s about maintaining a competitive large-scale meat production in the EU or preferring to import our meat from third countries that do not have the same reluctance about GMOs.” She considers this to be a separate issue from production of biotech crops in the EU.

Detractors of biotech crops are likely to see only problems. The good news is that feed processors and livestock producers consider biotech crops as low cost feed items and regulatory scientists continue to find there is no scientific reason not to use them in livestock and poultry feeds. The UK report noted that economics will play a role in determining what is produced. If the new Roundup Ready 2 soybeans do produce up to 11 percent more yield per acre compared to the current varieties as expected, it will add pressure for their production beyond the U.S. unless the price premium increases for other lower yielding soybeans.

Ross Korves

Ross Korves

Ross Korves served Truth about Trade & Technology, before it became Global Farmer Network, from 2004 – 2015 as the Economic and Trade Policy Analyst.

Researching and analyzing economic issues important to agricultural producers, Ross provided an intimate understanding regarding the interface of economic policy analysis and the political process.

Mr. Korves served the American Farm Bureau Federation as an Economist from 1980-2004. He served as Chief Economist from April 2001 through September 2003 and held the title of Senior Economist from September 2003 through August 2004.

Born and raised on a southern Illinois hog farm and educated at Southern Illinois University, Ross holds a Masters Degree in Agribusiness Economics. His studies and research expanded internationally through his work in Germany as a 1984 McCloy Agricultural Fellow and study travel to Japan in 1982, Zambia and Kenya in 1985 and Germany in 1987.

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