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“SOYA SUMMIT 2006” Conference establishes dialogue between Food and Energy industries (10.4.2006)

ST. LOUIS, MO, October 4, 2006 – On September 18-20, “Soya Summit 2006: Food and Energy for the 21st Century” brought together 250 attendees from 17 countries, representing companies from the food and energy industries, to discuss the potential disruption to the marketplace as food and biofuels processors compete for resources, and a glut of byproducts floods animal feed markets.

Two parallel tracks, food and energy, enabled attendees to explore product innovation, breakthroughs in soyfoods products, developments in biofuels, and the newest agriculture and processing technologies.

The energy track presented leaders from the University of California, DuPont and the National Biodiesel Board, along with consultants such as Scott Susich, K. Shaine Tyson and Bill Hudson. Key discussions in the energy track included:

Biofuels Capacity Build-up. A massive biofuels capacity build-up will take place over the next two to three years. This will result in competitive bidding for feedstocks and significantly reduced margins. In the case of biodiesel, the vast majority of the currently predominant feedstock in the U.S., soybean oil, is produced by four major companies, some of which are also biodiesel producers themselves. As a result, small, independent biodiesel producers may find it exceedingly difficult to secure feedstocks once capacity has been built out.

  • Biofuels Industry Viability. The viability of the biofuels industry in the U.S. requires either continued high oil prices or continued government subsidies. The industry can survive on both or either one, but it is not economically viable on its own given current technology.
  • Government Biofuels Policies. Government policies that support the biofuels industry are considered likely to continue over the long-term as the U.S. pursues energy independence through a variety of means. The cost to taxpayers of biofuels subsidies is less than that of other large-scale national projects such as the Apollo missions and the national interstate highway system.

Presenters at the food track included experts from The Solae Company, Iowa State University, Monsanto and the National Center for Agricultural Utilization Research, among others. Key discussions for participants in the food track included:

  • Overall Supply and Price Issues. There is likely to be increased competition for both soybeans and corn from the food/feed industry and the energy sector. Given the potential scale of demand by the biofuels industry, changes in production, processing, and distribution will likely impact the food industry’s ability to conduct business as usual within just a few years, if not sooner. However, due to the relatively small percentage of cost in consumer food products relative to farm price, significant increases in the price of food are not likely, at least for the next two to three years. After that, however, there could be a closer relationship between the price of oil and the price of food if overall energy demand costs continue to rise and there is no large-scale, concerted effort for conservation.
  • The Soyfoods Market. The soyfoods market in the world today is valued at about $100 billion annually, excluding the sales of soybean meal and oil. The U.S. market was estimated to have hit $3.9 billion in 2006 with soymilk products emerging as the number one category. However, the U.S. market for soyfoods has reached a mature phase and in fact, Soyatech estimates indicate that sales dropped by 2% in 2005, the first such decrease in more than 20 years of tracking. Some leveling off of growth is attributed to changes in macro food trends, as well as consolidation in the marketplace among leading brands.

On a positive note, while soyfoods sales have matured, the industry continues to innovate, introducing more than 600 new products in 2005 and bringing the total number of soy-based foods in the market to 5,970. Growth in organic products is helping to fuel new product development.

  • Soybeans and Soy Proteins. Food-grade soybeans in the U.S. are of the highest quality, and there is a wide range of specialty traits available for processing soybeans into soymilk, tofu, natto and other specialty foods. These soybeans are supported by comprehensive breeding and identity preservation programs. Soy proteins are available in a range of forms for processing directly into high protein food products such as beverages, snacks, bars and meat alternatives.
  • New Dairy Alternative Products. Soy-base, the liquid extract from whole soybeans that is used to make both tofu and soymilk, can also be used to formulate a new generation of dairy alternatives such as yogurts, cheese alternatives, soup base and ice creams and other desserts. New technology exists to produce a bland soy-base with wide applicability.
  • Trans-fat Issues. Earlier this year, the FDA began to require the labeling of food products relative to the trans-fat content. Trans-fatty acids are believed to have a negative impact on heart health. Food manufacturers have begun to remove these harmful fats, produced primarily from hydrogenated oils, with healthier fats and blends.

However, this may also result in an increase in the level of saturated fats in the diet, as palm oil has been one of the sources for substitute oils. On the other hand, new varieties of soybeans with enhanced oil traits are providing the marketplace with improved soybean oil for food processors.

  • Soyfoods and Health. Soyfoods continue to be studied closely, and there is an overwhelming preponderance of data indicating that soy-based foods are an important food for heart health, cancer prevention and bone health. In addition, research suggests that that they could play a major role in reducing obesity due to soy protein’s positive impact on satiety, or the feeling of fullness.
  • New Technologies in Extrusion to Shape the Future Market. A new generation of textured meat alternatives closely resembling meat products is likely to be available in the very near future. These products will stem from the utilization of new technology for processing soy proteins and the combination of soy protein with other functional vegetable proteins. It is anticipated that these products will create a new wave in soy product development.
  • Soyfoods and Protein around the World. Soyfoods and the use of soy protein is becoming increasingly important around the world as the need for high quality, low cost protein grows. Soy can fill basic protein needs in developing countries, as well as appeal to the middle and upper segments of the market due to its high nutritional quality and versatility.

In his general session presentation Business at the Base of the Pyramid: Corporate Growth in Serving the Developing World, Erik Simanis, Co-Director of the Bottom of the Pyramid Protocol Project at Cornell University, made the case for how marketing to the “bottom of the pyramid” – reaching the four billion people who make up the lowest rung of the world’s economic ladder – presents not only an opportunity for major companies but also a way for the world’s poorest people to rise out of poverty.

In commenting on the success of the conference, Peter Golbitz, president of conference sponsor Soyatech, said, “I am very excited by the energy generated from the exchange of ideas, strategies and information among these food and energy professionals. The response to this first annual conference was outstanding, and we are already planning an even bigger and better event for 2007.”

About Soyatech

Soyatech (www.soyatech.com) assists companies in the food and agribusiness sector assess and develop market opportunities through reports, conferences, publications and consulting. Founded in 1985, the company publishes the annual Soya & Oilseed Bluebook, the industry’s leading source of information on companies and products, an industry-focused email newsletter (in daily and weekly editions), and Soyatech.com, the award-winning business-to-business online resource for the industry. Company founder and president Peter Golbitz is a world-renowned expert on the soybean and oilseed industry and has published numerous articles, books and studies on the industry. Mr. Golbitz has had a hand in organizing 10 previous conferences on soybean utilization, processing and market development.


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