Canada`s Soybean Value Chain

Canada’s Soybean Value Chain
Canada’s Soybean Value Chain
Introduction
The Soy 20/20 Project is a unique partnership between government, academia and industry to
stimulate and seize new opportunities for Canadian soybeans. The Project assists researchers,
industry, producers and policy makers in focusing on key opportunities and working together
to achieve them.
This report outlines the Canadian soybean industry value chain and highlights the current
status, activities and opportunities, including the impact of the emerging bioeconomy.
Our goal is to stimulate the development of new uses for soybeans through increased
investment in Canadian soybean processing businesses, bringing specialized new soybean
varieties to market and generating more wealth for everyone along that value chain from plant
breeders to farmers, processors and distributors.
This report is the first document of its kind that comprehensively describes and quantifies the
soybean value chain as a means of attracting interest and investment in the entire sector, not
just a specific link of that chain.
Message from
the Chair
This is a unique and exciting time for the
Canadian soybean industry. As we continue
to explore and develop new uses for
soybeans, it is clear their potential is only
just beginning to emerge.
From more traditional products like soy
protein and oil, we are also developing
higher value markets for specialty oils, soy
flour, biodiesel and soybean-based car parts
like polyurethane foams.
In order to continue this innovative work, we
must engage the entire soybean value chain
and identify the opportunities each stage
presents to generate additional investments
and added value for all partners.
We must acknowledge the hard work and
dedication of the Soy 20/20 staff, and we
thank Jeff Schmalz and David Lee for their
ongoing enthusiasm and expertise. Without
their efforts, we wouldn’t be able to move
Soy 20/20 and our industry in the directions
that we have chosen to pursue.
As a country, Canada has strengths in
research capability, industrial output,
agricultural production and educational
excellence. By bringing all these elements
together through Soy 20/20, we are helping
to make Canada a globally competitive
leader in the development of a new biobased economy.
Peter Hannam
Chair, Soy 20/20 Project
Trait development
Traditionally, soybeans have been bred
for agronomic traits that benefit growers,
such as yield, consistency and disease
resistance. Identity Preserved (IP) traits were
introduced as a way of offering a valueadded program for farmers, while focusing
on the needs and wants of the end user.
Now, the introduction of these IP traits
continues, but includes genetically modified
(GM) and non-food uses.
Certain soy protein traits improve soy milk
and food products. Beta conglycinin, for
example, improves the “mouth feel” of soy
to consumers as a way of making soy-based
foods more palatable and popular.
The desire to eliminate trans fatty acids
(TFAs) from processed foods has led to
the development of soybeans whose low
linolenic oil doesn’t require hydrogenation
to add shelf life to a food product.
Hydrogenation causes the development of
health-harming TFAs. In the U.S., more than
four million acres of these specialty soybeans
are already grown annually. In Canada,
about 10,000 acres are grown in Ontario,
with the goal of increasing this significantly
once a domestic processor is established.
Another up and coming winner is the
Omega 3 soybean. It is estimated that one
acre of Omega 3 soybeans produces the
equivalent of 9,000 servings of Omega 3s.
Seed breeders say this is a trait that
expresses itself at a higher level in northern
climates like Canada, making our country
ideal for development of an Omega 3
soybean market.
Seed developers are now approaching
food manufacturers with potential soybean
varieties, and through open dialogue, get
their input into the types of products that
consumers might want. Food producers
have been very receptive to this way of
doing business whereas in the past they
were often just presented with a final
product and asked to sell it.
Soybeans are developed by both publicly
funded and private entities in Canada. The
private seed breeding industry is dominated
by three large companies—Pioneer (Dupont),
Syngenta and Monsanto—but smaller
businesses like Hyland Seeds, Semences
Prograin Inc. and Hendrick Seeds are also
active in the sector.
Canada’s Soybean Value Chain
Publicly funded seed breeding is carried
out by the University of Guelph under
the University of Guelph-Ontario Ministry
of Agriculture, Food and Rural Affairs
partnership, by Agriculture and Agri-Food
Canada, and by the Quebec-based Centre de
recherche sur les grains inc. (CEROM).
On average, it takes about 10 years to
develop an idea to a marketable product.
According to the Canadian Seed Trade
Association, $165 million was spent on plant
research development in Canada in 2007,
of which 39 per cent came from the private
sector. In 2012, it is projected that private
sector plant research and development
expenditures in Canada will be $105 million,
with 12 per cent being spent on soybeans.
Also by 2012, soybeans will rank second
only to canola in terms of research funding.
For more information:
Canadian Seed Trade Association –
www.cdnseed.org
University of Guelph-OMAFRA
partnership –
www.uoguelph.ca/research/
omafra/index.shtml
Agriculture and Agri-Food Canada –
www.agr.gc.ca
CEROM –
www.cerom.qc.ca
Ontario Ministry of Agriculture,
Food and Rural Affairs –
www.omafra.gov.on.ca/english/
crops/field/soybeans.html
Identity Preserved contractors
Identity Preserved (IP) means maintaining a
crop’s unique traits or quality characteristics
from seed through production, transportation,
handling and processing. In Canada, close to
200 varieties of soybeans are grown, each
with its own tolerance for specific climate
and soil traits and resistance to certain crop
diseases and pests. Each variety also produces
soybeans with varying characteristics—higher
protein or sugars, more or less oil content or
differences in flavour. Taste and consistency
traits are critical to companies seeking to
create a consistent product, and they’re willing
to pay a premium price for that assurance.
The Canadian Food Grade Soybean
Database is a comprehensive online listing
of quantitative information about Canadian
soybean varieties grown specifically for
the soyfood industry. It was created using
soybean samples from the Ontario Soybean
Variety Trials and the Ontario Food Soybean
Performance Trials run by the Ontario Oil and
Protein Seed Crop Committee. The samples
included in the database represent food grade
varieties currently available or expected to be
available soon for commercial production. The
database is a partnership between Agriculture
and Agri-Food Canada and the Canadian
International Grains Institute.
Canada’s Identity Preservation Standard
requires a sophisticated documentation
and record keeping system that covers
all aspects of soybean production and
processing, ensuring complete traceability
from purchasing seed to the sealing of
shipping containers. The Standard’s strict
rules provide customers with the assurance
that the soybeans they receive are the exact
soybeans they ordered.
The Canadian Identity Preserved Recognition
System (CIPRS) is the Canadian Grain
Commission’s quality assurance program
that provides third party verification of
the processes the Canadian industry uses
to deliver the specific quality attributes
that domestic and international buyers are
demanding. CIPRS-certified companies
that sell products through IP programs
have quality assurance and traceability
systems for the production, handling and
transportation of specialty grains, oilseeds
or pulses throughout the entire value chain.
CIPRS also ensures that a company’s quality
management system meets the standard
created by the Canadian Grain Commission, a
standard that is compatible with the globally
recognized International Organization for
Standardization (ISO) system.
IP agricultural production
means maintaining
a crop’s unique
traits or quality … from
seed through
transportation, handling
and processing
The Canadian Soybean Exporters’
Association (CSEA) has 26 members. These
represent the bulk of this industry segment
and are located in Ontario and Quebec.
CSEA’s mission is to improve the quality and
value of Canadian soybeans and to promote
the export of Canadian soybeans and soy
products into world markets. There are also
soybean exporters located in Manitoba and
a new processing facility for food grade
soybeans in Prince Edward Island.
The fluctuating Canadian dollar and rising
costs have been challenges for Canadian
soybean exporters recently. Other problems
include container availability for shipping,
competition with GM crops, developing a
grower base for IP soybeans and growing
enough soybeans to supply the increasing
global demand.
Currently, food grade soybeans for export
markets represent the majority of the
industry’s added value, with the remainder
coming from the domestic soyfood industry
and emerging niche markets. While
these markets have traditionally been
exclusively interested in non-GM soybeans,
opportunities are developing for GM foodgrade soybeans. Over the last five years, an
average of 40 per cent of Canada’s annual
soybean production was exported, and of
those exports, 80 per cent were IP soybeans.
Primary export destinations include Japan
(20 per cent), Netherlands (13 per cent),
USA (13 per cent), Belgium (10 per cent) and
Iran (9 per cent). Source: Canadian Oilseed
Processors Association, Ontario Soybean
Growers; 2006-07 crop year.
Canadian Food Grade
Soybean Database –
www.cigi.ca/soybean_db.html
For more information:
Canadian International Grains
Institute – www.cigi.ca/index.htm
Canadian Grain Commission –
www.grainscanada.gc.ca/
Canadian Soybean
Exporters’ Association –
www.canadiansoybeans.com
Ontario Oil and Protein
Seed Crop Committee –
www.oopscc.org
Growers
Approximately three-quarters of Canada’s
soybeans are grown in Ontario—specifically
in southern Ontario. The top five soybeanproducing counties are Lambton, ChathamKent, Essex, Huron and Middlesex, which
are responsible for approximately 50 per
cent of Ontario’s production (see map).
Although soybeans are grown from Alberta
to Prince Edward Island, the remainder of
Canada’s production is grown largely in
Quebec and Manitoba.
Ontario Soybean Growers (OSG), founded
in 1949, represents Ontario’s 25,000
soybean growers. The organization is run
by a board of 15 farmers who are elected
as directors by their fellow growers. OSG
negotiates the annual soybean marketing
agreement with dealers and processors on
behalf of growers, is involved in domestic
and export market development, funds
soybean research, and lobbies government
on important grower issues.
In Manitoba, soybean growers are
represented by Manitoba Pulse Growers
Association (MPGA) and in Quebec by
Federation des producteurs de cultures
commerciales du Quebec (FPCCQ). MPGA
was incorporated in 1984, and represents
the province’s 3,900 pulse farmers, including
soybean growers. The organization is run
by a board of farmer-elected directors,
and is involved in all aspects of improving
Manitoba‘s soybean industry. Those areas
include funding soybean research, domestic
and international market development, as
well as government and industry relations.
FPCCQ was founded in 1975 and is a
federation of 11 grain grower organizations
that represents about 10,000 farmers.
The organization develops and represents
the economic and social interests of
its members, and works to create new
opportunities for the sector.
The Canadian Soybean Council is
a partnership of the three grower
organizations primarily dedicated to the
creation of new export markets.
Soybean growers’ long history of investment
in research and technology has been
instrumental in expanding Canada’s
production capacity and developing new
markets and uses for Canadian-grown
soybeans. Growers fund research in several
priority areas, including disease and insect
control, utilization and agronomy.
In Ontario, OSG is actively involved
in market development activities,
focusing on three key areas:
• Domestic market development—
improving the domestic soyfood market in
North America and maintain and improve
the domestic meal and oil market
• Export market development—maintaining
current key markets while fostering new
market opportunities for Canadian soybeans
• Value-added opportunities—supporting
growers in capturing opportunities and
co-ordinate and facilitate the exchange of
information
Current issues facing growers:
• Rising costs for inputs (fertilizer, crop
protection products, seed, fuel)
• Increased pests—soybean aphids, soybean
cyst nematode (SCN), soybean rust
• Export market acceptance of GM soybeans
• Genetic development of conventional
soybean varieties
For more information:
Ontario Soybean Growers –
www.soybean.on.ca
Manitoba Pulse Growers Association –
www.manitobapulse.ca
Federation des producteurs de
cultures commerciales du Quebec –
www.fpccq.qc.ca
Soybean production history – Canada
Crop year
Acres harvested
(‘000 acres)
Yield
(bu/acre)
Production
(‘000 tonnes)
Avg price
(CDN$/bu)
Total value
(CDN$ ‘000)
2008-09
2,917
40.8
3,240
n/a
n/a
2007-08
2,895
34.2
2,696
n/a
n/a
2006-07
2,968
42.9
3,466
7.22
920,000
2005-06
2,880
40.3
3,156
6.30
732,000
2004-05
2,900
38.6
3,044
7.72
865,000
Note: 2008-09 figures are forecasts only
Source: Ontario Soybean Growers, Agriculture and Agri-Food Canada
Canada’s Soybean Value Chain
MPGA
H
Production (’000 tonnes)
0
1 – 10
11 – 50
51 – 100
101 – 200
200 +
M
L
CK
E
Source: Ontario Ministry of Agriculture, Food and Rural Affairs
Top five soybean-producing counties in Ontario:
L
Lambton
H
Huron
CK
Chatham-Kent
M
Middlesex
E
Essex
Elevators
In Ontario, there are 356 elevators in
245 locations across the province
(Source: Agricorp). Most but not all handle
soybeans as part of their operations. The
majority are single location, farmer-owned
elevators. Similar networks of grain elevators
also exist in Quebec and Manitoba.
Nearly 60 per cent of Ontario’s
soybeans are handled by only
10 companies:
• ADM Agri-Industries Ltd.
• Cargill Limited
• Dennis Jackson Seed Service Ltd.
• FS Partners GP
• Great Lakes Grain Inc.
• Hensall District Co-operative
• London Agricultural Commodities Inc.
• Parrish & Heimbecker Ltd.
• South West AG Partners Inc.
• Thompsons Limited
In Canada, soybeans are transported by
ship, truck or rail. Elevators, which are state
of the art, provide the physical infrastructure
and logistics to store and move soybeans
from a one-time harvest to domestic and
export users throughout the entire year.
In order to service food grade markets and
maintain IP status, the elevators’ storage
facilities need to be both high quality and
capable of segregation.
Canada’s Soybean Value Chain
As more specialized markets are developed
and more specialty trait soybeans are
grown, the quantity and quality of storage
will become even more important.
Elevators are a critical link in the soybean
value chain because without suitable, high
quality storage and handling capabilities,
other partners in the chain are not able to
capitalize on value-added opportunities.
As the soybean market becomes fragmented
further through the introduction of new IP
or attribute-enhanced varieties, there will be
opportunities to expand the current storage
and handling infrastructure in Ontario to
accommodate more soybean varieties than
are currently handled.
Processors
There are a number of solvent and extrusion
soybean processors in Canada.
Processor
Location
Capacity
Percentage
soybeans
Solvent – chemical-based extraction
ADM
Windsor
ON
3,600
tonnes/day
50%
Bunge
Hamilton
ON
3,000
tonnes/day
75%
TRTETGO
Bécancour
QC
(planned)
3,000
tonnes/day
40%
Location
Capacity
150
tonnes/day
TriCounty
Protein
Percentage
soybeans
Processor
Winkler
MB
Year
Total capacity
(‘000 tonnes)
Percentage
utilization
2007-08
1,376 (forecast)
63.3
2006-07
1,573
70.1
2005-06
1,493
68.8
2004-05
1,610
74.3
2003-04
1,500
77.1
2002-03
1,762
86.8
Source: Canadian Oilseed Processors Association
Extrusion – mechanical extraction
Jordan
Mills
Canadian soybean crush
capacity utilization
100%
Winchester
100
ON
tonnes/day
100%
Additionally, there are several other small extrusion/cold press facilities located in Ontario,
Quebec and Manitoba, with daily volumes
between one half and five tonnes per day.
Twin Rivers Technologies – Entreprises de
transformation de grains oléagineuses du
Québec (TRT-ETGO) is a processing plant
currently being built in Quebec that will
crush canola seeds and soybeans, as well
as refine canola, soybean and palm oil. The
new plant is expected to generate annual
sales of $450 million.
Canada has an existing total processing
capacity of approximately 2.175 million tonnes
of soybeans, although historically it hasn’t
been maximized.
Processors buy their soybean feedstock in
different ways: directly from farmers, from
licensed elevators—which could be a single
farmer, a co-operative or an agri-business—
and from foreign sources, nearly all of which
come from the United States.
In Canada, processors do not buy soybeans
from or through commodity organizations,
who never own or control the sale of
soybeans, unlike some other farm product
marketing boards.
Processors sell their products into a number
of markets—oil (primarily for food but also
growing bioproduct uses), hulls and protein
meal (virtually all livestock feed).
In order for Canada to fully capture the
emerging market for attribute-enhanced
soybeans, such as low linolenic for trans fat
free food products, a dedicated specialty
trait soybean processing—crushing and
refining—facility needs to be established.
But the crushing/refining opportunity is not
just driven by the need to remove trans fatty
acids from food products. It could also be
based on other new soybean products that
need segregation throughout the supply
chain. This includes possibilities in the
organic market for food products or livestock
feed and use of soy proteins and soy flours,
as well as high value industrial uses.
For more information:
Canadian Oilseed Processors’
Association –
www.copaonline.net
Canadian soybean processors
1 Jordan Mills Inc., Winkler, MB
2 ADM Agri-Industries Ltd.,
Windsor, ON
3 Bunge Limited, Hamilton, ON
4 Tri-County Protein Corp.,
Winchester, ON
5 TRT-ETGO, Bécancour, QC
The soybean value chain
The soybean value chain follows a fairly linear path. From trait development to processing, there is a
sequential order of partners that work together to take the soybeans from one link in the chain to the next.
But once soybeans reach the processing stage, the possibilities for use extend in many different directions,
both in specific parts of the soybean, such as oil, hulls/other and protein, and then in more specific uses of
each of those soybean components.
Up to the processing stage, the Canadian soybean industry is a well-developed world leader. Now work
is underway to develop uses and markets for the soybean beyond processing—new products, new
applications and new end users.
Trait Developers
Canada’s Soybean Value Chain
IP Contractors
Growers
Elevators
Processors
Food
margarine
shortening
cooking/salad oil
other
Industrial
biodiesel
paints
resins/plastics
other
Food
fibre
lecithin
Industrial
peroxidase
glycerol
pharmaceuticals
Feed
livestock
pets
Food
flour
protein isolate
protein concentrate
other
Oil
Hulls/Other
Protein
Industrial
personal care products
resins
coatings
other
Oil
Of the whole soybean, approximately
18 per cent is comprised of oil. Soybean
oil has both food and industrial uses.
Food uses
The need to eliminate trans fatty acids (TFAs)
has resulted in plant breeders developing
oil seeds that do not need hydrogenation.
Monsanto and Pioneer (DuPont) have both
invested in low-linolenic soybean varieties
that are commercially available. Also being
developed are mid-oleic and high oleic
soybean oil varieties, Omega 3 soy oils
and high stearic acid oils.
All edible oils
914,000 tonnes
Soy 34%
Soybean oil is the second largest source
of edible oil in Canada, with 34 per cent,
compared to canola, which supplies 46 per
cent of the market. Between 300,000 and
400,000 tonnes of both soybean and canola
oil are used in the Canadian market.
Canada: Soybean oil supply
and disposition
Canadian repackers and distributors:
2007-08
‘000 tonnes
Opening Stock
5
Import
106
• Hubberts Industries
Production
265
• L.V. Lomas
Export
46
• Nealanders
Use
325
• Gordon Food Service
Closing Stock
5
• Saporito Foods
• Sysco
Source: Soy 20/20 projection
• Others
Edible soybean oil, once refined, is sold to
repackers and distributors. It can also be
sold to further processors for the production
of margarine or salad dressings before
ultimately going into food retail, food
manufacturing or food service.
Industrial uses
Canada’s Soybean Value Chain
Soy-based polyols have been incorporated
into car parts, such as in the Ford Escape, and
are now being used in Ontario. Polyurethane
foams are the primary component of vehicle
seat cushions, seat backs, arm and head rests,
and overhead systems, and can be made with
soy-derived material without compromising
the quality or durability of the foam.
Soybean oil can be used to produce virtually
anything that mineral oil does. Markets for
soy-based plastics or soy polyols include
polyurethane foams, films, molded parts and
plastic composites and packaging. Currently,
polyurethane foams are a major application
for soy polyols.
Almost half of the Canadian polyol customers
or polyurethane processing establishments
are located in Ontario. It is estimated that
Ontario accounts for nearly two thirds of
total Canadian market demand for polyols.
In 2006, the Canadian market for polyols
reached an estimated 113,000 tonnes, valued
at approximately $315 million. If soy-based
polyols are able to capture 25 per cent of the
market by 2015, demand in Canada would
be approximately 36,000 tonnes or 165,000
acres of soybeans per year.
Edible oil volume by market channel/use category
Salad and Cooking
456,000 tonnes
Soy 22%
Retail
~ 86,000 tonnes
FS ~ 200,000 tonnes
FM ~ 170,000 tonnes
Retail
~ 12,000 tonnes
FS ~ 200,000 tonnes
Baking ~ 60,000 tonnes
Frying ~ 140,000 tonnes
FM ~ 100,000 tonnes
Baking ~ 50,000 tonnes
Frying ~ 50,000 tonnes
Retail
~ 90,000 tonnes
FS ~ 30,000 tonnes
FM ~ 26,000 tonnes
Baking/frying
(Shortening)
312,000 tonnes
Soy 42%
Margarine
Source: JRG Consulting Group, Evaluating the Market Potential For Specialty Trait Soybean Oil, November 2007
There are also uses beyond polyols.
Many different bioproducts contain
soybean oils, such as biodiesel, waxes,
methyl soyate (solvents), paints, detergents,
lubricants, hydraulic fluids, candles,
epoxies and disinfectants—even shampoo,
cosmetics and soap.
Methyl soyate, for example, is being used
as a solvent to replace chlorinated or
petroleum products in chemical cleaners
and strippers, and can be used to clean
up and recover spilled petroleum products
from shorelines and streams. Consumer
products ranging from hand cleaners to auto
and personal care products using methyl
soyate are already on the market. Emerging
applications for soy-based-solvents include
bioremediation, paper pulp cleaning and
highway paving materials to replace asphalt.
FS = Food service, FM = Food manufacturing
Soy 20/20 promotes commercialization of emerging
applications by providing support in various
capacities. This includes serving in an advisory role,
accessing funding or even helping to source inputs.
(United Soybean Board/Soybean Checkoff)
146,000 tonnes
Soy 58%
Protein
The most voluminous product of soybean
crushing is soybean meal—approximately
80 per cent of a soybean (by weight) will be
sold as soybean meal. More than 90 per cent
of the soybean meal produced in Canada is
processed at solvent extraction facilities in
Hamilton and Windsor, Ontario.
During the last several years, imports have
accounted for approximately 55 per cent
of total supply, with almost all coming
from the United States, the world’s largest
soybean producer. About half of all soybean
meal coming into Canada goes into the
Ontario market. Approximately 10 per cent
of domestic soybean meal production is
exported, mostly all of it to the United
States. This is due to both basis—the cash
market price minus the futures price—and
proximity to the border.
Canada:
Soybean meal supply and disposition
Opening Stocks
‘000 tonnes
1,057
Imports
1,450
Total Supply
2,520
2,420
Closing Stocks
13
Swine
Dairy
Other
Source: Soy 20/20 projection
2,520
Source: Canadian Oilseed Processors Association,
Soy 20/20 projection; numbers are estimates only.
Canada’s Soybean Value Chain
Canadian soybean meal prices are
determined using the Chicago Board of Trade
(CBOT) price for in-store Decatur 48 per cent
protein, adjusted for basis, and are typically
expressed as CAN$/tonne in-store Hamilton.
Poultry
87
Domestic Use
Total Disposition
The growth of the renewable fuels industry
over the last several years has led to the rise
of dried distiller’s grains with solubles as a
competitive source of dietary protein. This
has changed the domestic use of soybean
meal considerably, reducing consumption by
ruminant livestock like cattle and sheep.
Canada: Soybean meal use by
livestock and poultry
13
Production
Exports
Soybean meal is the most common protein
meal in the world but Canada uses only
1.5 per cent of global supply. It is also one of
the most consistent and high-quality protein
sources available to feed livestock and
poultry, which is why almost all soybean meal
consumed in Canada is used for this purpose.
Generally sold as a 48 per cent protein meal,
it is typically in a flake or pellet format.
(United Soybean Board/Soybean Checkoff)
2007-08
Agricultural feed use
Industrial use
Food use
fire-fighting foams and fire resistant
coatings, asphalt emulsions, cleaning
compounds and printing inks.
New soy-based alternatives are being
developed for the wood adhesives industry
in response to higher costs for petroleumbased products and environmental and
health concerns.
Soy-based wood adhesives can
be used across various lumber
products, including:
Finely ground soy flour can be combined with
other commercially available resins to form
wood adhesives, generally by dissolving soy
flour in a sodium hydroxide solution. These
adhesives are used for producing wood
panels, replacing the formaldehyde that is
normally used in plywood adhesives.
• wood panel products (plywood, veneer,
oriented strand board, particleboard and
medium-density fiberboard)
• engineered lumber
• green framing lumber
Soy flour and meal can also be found in
dry-wall tape compound, textured paints,
fermentation nutrients, paper coatings,
• wood pallets
Since the 1960s, soy protein products have
been used as nutritional and functional
food ingredients in every food category
available to consumers. Soy protein provides
all the essential amino acids needed to
fulfill human nutritional requirements and is
among the most complete of all vegetable
protein sources. It closely resembles highquality animal protein sources.
The three primary types of soy protein are
defatted soy flour (~53 per cent protein),
soy protein concentrates (~65 per cent
protein) and soy protein isolates (~90 per
cent protein). Currently, soy ingredients are
used in food products for two main reasons:
• To provide some functionality due to their
protein content and so replace more costly
ingredients;
• To deliver health benefits.
Recent historical soybean meal prices
Factors with potential future impact on soybean meal prices: increased renewable fuels
production; expansion of soybean crushing capacity; volatility of the Canada-U.S. exchange
rate; soybean production and livestock industry dynamics.
550
500
450
Soy proteins can improve water
absorption, increase emulsification of
fats with other ingredients, provide body,
resiliency and have a tenderizing effect,
and even extend shelf life. In North America,
the soyfood industry increased 87 per cent
between 2001 and 2006, growing from a
$665 million industry to $1.24 billion. This
is forecast to grow to $1.8 billion by 2011.
350
For more information:
300
250
Soyfoods Canada –
www.soyfoodscanada.com
200
150
100
Guelph Food Technology Centre –
www.gftc.ca
50
Chicago Board of Trade
Hamilton
July
Apr
Jan 2007
Oct
July
Apr
Jan 2007
Oct
July
Apr
Jan 2006
Oct
July
Apr
0
Jan 2005
CAN$ per tonne
400
Premium (Hamilton minus Chicago Board of Trade)
Hulls
Soybean hulls are primarily a by-product of
processing or oil extraction. Traditionally, they
are used as a fibre supplement in feed and
food applications. Research at the University of
Windsor focuses on a new and environmentally
friendly use for these seed coats as well—in
industrial wastewater treatment.
insoluble and can be physically separated
from the water. The clean water can then
be safely re-used. Once the peroxidase has
been removed from the hulls, they can still
be used in animal feed without any impact
on the quality of the feed.
treatment around the world. Once this is
in place, it could be used to extract other
natural materials from soybean hulls as well,
such as peptides, which have been shown to
be an effective cancer treatment.
Researchers are studying how soybean
peroxidase can be used to clean waste
water, especially from refineries, metal
casting industries, wood products
production and coal tar processing.
Other research has also shown that different
soybean varieties have different levels of
peroxidase present in their seed coats.
This provides an excellent opportunity for
developing a segregated, value-added
market based on peroxidase.
The peroxidase is extracted from the
soybean hulls and the enzyme is used to
oxidize phenolic compounds in the waste
water. This means the enzyme actually
builds up the phenolic compounds in the
water to the point where they become
Currently, there are no commercial enzyme
providers in Canada or elsewhere. Soy
20/20 is working to encourage supply
chain partners to join together to develop a
commercial enzyme extractor to provide a
product that could be used for wastewater
A group of researchers from the University
of Ottawa and Agriculture and Agri-Food
Canada in Ottawa and London are currently
investigating the possibility of the seed coat
as a production system. This means getting
the hull to re-produce a protein whose
gene is manually inserted into it to create a
source for medications or certain antibodies.
This has been dubbed molecular pharming.
Commercialization of soybean peroxidase,
using one industry’s by-product to treat the
waste of another, represents a whole new
level of assistance for the transition from a
petroleum-based economy to a bioeconomy.
Lecithin
Saponins
Isoflavones
Lecithin is a main by-product of soy oil
degumming and constitutes 0.5-1.5 per
cent of soybean seed or 1-3 per cent of
crude soybean oil. It has many functional
properties including emulsifying, wetting,
colloidal and anti-oxidant. It has multiple
uses, often in small amounts, in food, feed,
health, and cosmetic products as well as
industrial coatings.
Saponins, a class of natural surfactants,
comprise 0.17-6.16 per cent of whole
soybeans. Saponins are considered
functional foods because of their
physiological properties, which include
antioxidative, as well as lowering cholesterol
and cancer prevention potential.
Soybeans contain the highest amount
of isoflavones from plant sources—
0.1-0.4 per cent dry weight. Isoflavones
are thought to be most responsible for
the hypothesized health benefits of
soybeans. Potential health benefits include
prevention and treatment of cardiovascular
disease, cancer, osteoporosis and
postmenopausal symptoms and others.
Other
Tocopherols
Tocopherols are an important antioxidant
present in relatively high concentrations
in soybeans. Also known as vitamin E,
tocopherols are a by-product of oil refining.
The primary health benefit of tocopherols is
its antioxidant properties.
Canada’s Soybean Value Chain
Glycerol
Glycerol is a by-product of oil processing.
While it is a minor component of the whole
soybean, significant volumes are produced
during the production of biodiesel. There
are many uses, with large amounts of
glycerol going into the manufacture of
pharmaceuticals, cosmetics, toothpastes,
urethane foam, synthetic resins and tobacco
as well as food processing.
Phytosterols
Phytosterols are lipid-like compounds found
in plants. Soybean sterols are a by-product
of the vitamin E manufacturing. Phytosterols
have been clinically proven to lower blood
cholesterol in humans, and as such are one
of the most intensely studied nutraceuticals
in the area of cardiovascular diseases.
Looking forward
This report provides a comprehensive
overview of what the soybean industry is
and represents in Canada. But it also looks
beyond the here and now into what that
industry could become—and ideas for how
we can get there.
Canada’s soybean value chain is a world
leader—sophisticated, well-developed and
innovative. We have the knowledge, the
expertise, and the experience required to
continue the process of developing new
markets and realizing new opportunities.
To date, value added focus has been on
food uses of soybeans, which typically use
whole soybeans. The demand created by
the emerging bioeconomy is for specific
components of soybeans, requiring a slight
change in the way our supply chain operates.
Segregation beyond the whole bean is
essential to the success of this vision, and
this will start with domestic processing
capable of handling several distinct soybean
varieties, thereby assuring a user that the
oil, protein or other trait they need is what
they’re getting. Value added soybeans will
move beyond the linear supply chain from
trait development to processing, and enter
the fragmented, fibrous portion of the value
chain that leads directly to end uses.
Factors other than infrastructure will also
be critical to success. Another processor will
strain availability of soybeans in Canada.
Competition from other domestic or new
oilseed crops will influence prices obtainable
for new traits. Genetic providers will need to
develop output traits without compromising
producer traits to ensure farmer acceptance.
Bioproduct research, development,
commercialization and industry/consumer
acceptance will have to continue current
rapid growth.
The soybean is a wonderful, many-faceted
plant and the opportunities it presents,
as evidenced in this report, seem almost
limitless. Research and innovation has
opened many doors for Canada’s soybean
industry. The next step is to take what
we know and use what we have to move
through those doors and bring some of those
opportunities and possibilities to fruition.
Specialty traits, for either food or industrial
applications, are an opportunity to both
increase demand for soybeans and increase
the value of soybeans.
Soy 20/20 plays a key role in supporting
many different soy initiatives and growing
the sector. As the industry continues to
develop, look for Soy 20/20 to continue to be
involved in building partnerships, attracting
new support and helping to make innovative
new ideas a reality.
Soy 20/20 Board of Directors
Chair: Peter Hannam, President, Woodrill Farms
Vice Chair: Gary Fread, President, Guelph Food Technology Centre
Rich Moccia, Interim Associate Vice President (Research) Agri-Food Partnerships, University of Guelph
Gwen Zellen, Director, Research and Innovation Branch, Ontario Ministry of Agriculture, Food and Rural Affairs
Mark Huston, Director, Ontario Soybean Growers
Ezio DiEmanuele, Regional Director, Agriculture and Agri-Food Canada (ex-officio)
Jeff Schmalz, Executive Project Director, Soy 20/20 Project (ex-officio)
Soy 20/20 Staff
Executive Project Director: Jeff Schmalz
Project Director: David Lee
Funding for Soy 20/20 is provided by the Ontario Soybean Growers, University of Guelph and by Agriculture and Agri-Food Canada and the
Ontario Ministry of Agriculture, Food and Rural Affairs under the Agricultural Policy Framework, an agreement among federal, provincial and
territorial governments to make Canada’s agri-food sector a world leader in science and innovation.
Canada’s Soybean Value Chain
120 Research Lane, Suite #200
Guelph, ON N1G 0B4
519-826-6559
www.soy2020.ca
Canada’s Soybean Value Chain