EU soybean meal prices rise as Argentina's drought impacts production

European soybean meal prices have risen by 5% to a range of $366/mt-$377/mt CIF Netherlands since drought was first declared four weeks ago in Argentina, a main supplier to Europe, a leading supplier of soybean meal to the region said Jan. 16.

Argentina-origin product was at the high end of the range while Brazilian product was at the lower end, sources said.

Argentina's Rosario Grains exchange said Jan. 11 that the last 20 days has seen a notable deterioration of crops such as soybeans in the north of Buenos Aires and the extreme south of Santa Fe, due to the lack of rain.

"In the region, 19% of the fields are in average to poor condition, 49% are in good condition and 32% are in very good condition. Last year, at this same time, 95% of the fields were in excellent to very good condition, favored by the influence of the "Niño" phenomenon," the exchange said.

The exchanged also warned that, without rain in the next few days, the most advanced fields could begin to lose yield.

Denmark-based feed importer said if the drought persists it could impact animal feed manufacturing and have a knock off effect on the port and poultry markets in the EU.

According to the European Feed Manufacturers' Association, animal feed remains the most important cost factor in livestock production. As Argentina is the second-largest supplier of soybean meal to the EU, the drought's effects could impact the downstream value chain.

Livestock is fed with a mixture of roughages and compound feeds, of which soybean meal is a major constituent.

Recently, domestic cultivation of soybeans in the EU increased significantly but the region still relies heavily on soybean meals supplied by Argentina and Brazil due to the limited amount of land available for soybean farming within the EU, the largest importer of soybean meal said.

Domestically grown soybeans account for just over 2 million mt of the EU's total requirement of 28 million–29 million mt. In the current 2024/2025 marketing year, the EU has imported over 2 million mt of soybean meal from Argentina and over 3 million mt from Brazil, according to EU data.