December 2015 Non-GMO Soy Synopsis Global supply of certified non-gmo soy Summary Global production of non-genetically modified (non-gmo) soybeans is estimated at 56.1 million metric tons (MT) in 2015, 17% of the total soy output (see Fig. 1). Out of this, around 5.0 million MT of soybeans are expected to be segregated along the food chain and certified according to non-gmo standards. The volume of certified non-gmo soybeans is predicted to expand by 31% in 2015 after decreasing slightly in the preceding three years. In 2016, the certified non-gmo soy volume is forecast to increase further by 12% and to reach 5.6 million MT, the highest output since the economic crisis in 2008. The growth in the non-gmo soy volume is fuelled by retailers throughout Europe especially in Germany, Austria and Switzerland that require non-gmo reared animal products. The aquafeed sector in Scandinavia also contributes to this demand. Non-GMO standards in the sector include the market leader Cert ID Non-GMO and ProTerra standards, together covering 91% of the certified volume. Danube Soya and Organic standards account for the rest. Certified non-gmo soy production is concentrated in Brazil, forming 80% of the total volume although India and Europe are playing an increasing role in this area. The Non-GMO Soy Synopsis provides estimates and analysis for the global non-gmo soy market with a special focus on products certified according to voluntary non- GMO standards. The document is published on an annual basis. Figures are based on data from the ProTerra Foundation, the Danube Soya Association and FiBl as well as official USDA statistics. This report is published by Fig. 1 Share of certified non-gmo volume in global soy production (forecast for 2015) Global soy production: Certified non-gmo volume by standard: 320 million MT GMO soy Non-GMO soy Certified non-gmo soy 5.0 mil. MT ProTerra Cert ID Non-GMO Organic (2013) Danube Soya Source: USDA, ProTerra Foundation, Danube Soya Association, FiBl
Non-GMO Soy Synopsis December 2015 Global market GMO-free status has value within the soy market. In some regions especially in Europe consumers prefer non-gmo foods due to environmental and health concerns associated with GMOs. Hence, a market segment has developed for products with guaranteed non-gmo origins. However, food producers often face challenges in this area because of the limited availability of GMO-free soy raw material in the global market. Global soy production is projected to cover 120.5 million hectares in 2015, yielding a harvest of around 320 million MT. GMO seeds are largely used worldwide. In fact, close to three-quarters of the global soy area is planted with biotech varieties. The technology is most popular in the top three soy producing and exporting countries, namely the USA, Brazil and Argentina. The extensive use of GMOs leaves limited options for non-gmo soy production. Non-GMO output Global non-gmo soy cultivation is projected to be 32.8 million hectares in 2015, comprising 27% of the total. India is expected to register the biggest non-gmo soy area with 11.7 million hectares, followed by China with 7.5 million hectares (Table 1). Brazil and the USA, the top two soy producers, are forecast to harvest non-gmo soybeans on 3.7 million and 2.7 million hectares, respectively. Table 1 Total and non-gmo soy area by main producing country (forecast for 2015) million ha Total area Share of non-gmo Area of non-gmo Total Certified USA 33.4 8% 2.7 0.06 Brazil 32.1 12% 3.7 1.6 Argentina 19.8 <1% <0.1 <0.01 India 11.7 100% 11.7 0.22 China 7.5 100% 7.5 0.09 Paraguay 3.2 3% 0.1 <0.01 Canada 2.2 38% 0.8 0.03 Ukraine 2.1 30% 0.6 <0.01 Russia 2.0 100% 2.0 0.04 EU-28 0.7 100% 0.7 0.09 Total 120.5 27% 32.8 2.15 The percentage of illegal GMO soy plantings in China is unknown. No GMO soy varieties have been authorised for planting in Ukraine but industry rumours indicate that the share of illegal non-gmo soy plantings reaches up to 70%. Source: own calculation on the basis of USDA statistics, ProTerra Foundation, Danube Soya Association, FiBl Fig. 2 Non-GMO soy output by main producing country (forecast for 2015) China Brazil USA India Russia Canada EU-28 Ukraine 0 2 4 6 8 10 12 14 16 million MT In the cases of Brazil, USA, Canada and Ukraine the output was calculated by multiplying the non-gmo area by the average countrywide yield which is probably higher than that of non-gmo soy. This means that the corresponding figures serve rather as upper limits than as accurate values. The percentage of illegal GMO soy plantings in China is unknown. Source: own calculation on the basis of USDA statistics, ProTerra Foundation The global output of non-gmo soybeans is estimated at 56.1 million MT in 2015, 17% of the total production. China is expected to report the highest non-gmo soy output with 15.0 million MT in 2015, ahead of Brazil with the production of 11.1 million MT (see Fig. 2). The USA and India are projected to each harvest 8-9 million MT of non-gmo soybeans. However, it is worth noting that only a part of the non-gmo soy harvest is certified and used in segregated non-gmo supply chains. Certified non-gmo volume Certified non-gmo soy volume (in Hard IP systems see Box 1, on p. 3, for more info) is projected to jump by 31% to 5.0 million MT in 2015, reversing the slight downward trend of previous years (see Fig. 3). This amount represents 1.5% of the global soy production. In 2016, the certified non-gmo volume is forecast to increase again by 12% to 5.6 million MT and reach almost the pre-crisis level in 2008. The expansion is driven by improving market conditions in Europe (for more info see the section on demand on p. 4). In terms of available volume, Brazil plays a major role, accounting for 80% of the total certified soy output in 2015 (see Fig. 4). In India and China without any transgenic soybeans planted the certified production is relatively small because the fragmented farm structure in the sector makes the auditing and training of farmers economically unviable. 2
Global supply of certified non-gmo soy Fig. 3 Global volume of certified non-gmo soybeans by standard (2010-2016) million MT 6 5 4 3 2 1 0 2010 11 12 13 14 15 16 (f) ProTerra Cert ID Non-GMO Organic Danube Soya The ProTerra certified soybeans are also certified under the Cert ID Non-GMO. Data on organic soy volume is available up to 2013. The figure from 2013 is used for later years. Source: ProTerra Foundation, Danube Soya, FiBl In terms of volume, non-gmo certification is dominated globally by the Cert ID Non-GMO and ProTerra standards, together covering 91% of the market. Danube Soya and Organic standards account for the rest of the non-gmo certification in the sector (see the description of different standards in Box 2). Cert ID Non-GMO Standard The production of certified soybeans under the Cert ID Non-GMO Standard is expected to expand by around one-third to 4.5 million MT in 2015 after a setback in the previous years. Brazil is forecast to be responsible for the biggest share of the volume with 4.0 million MT, but India is also likely to play an important role (400,000 MT) in 2015. A large part around 80% of the Cert ID Non-GMO volume meets sustainability criteria, and is likewise certified under the ProTerra Standard too (please note that a significant overlap exists between the two standards). ProTerra Standard Certified soy volume under the ProTerra Standard is projected to leap by around 50% to 3.6 million MT in 2015 after decreasing in the last three years. The lion s share (97%) of the volume is sourced in Brazil with smaller quantities in Russia (80,000 MT), Canada (20,000 MT), the USA (20,000 MT) and France (5,000 MT) in 2015. The recent growth in ProTerra certification is being fuelled by the improving non-gmo feed market in Europe, particularly in Germany. The biggest uptake of ProTerra soy products is reported in the poultry industry, primarily in Germany and France. Fig. 4 Global volume of certified non-gmo soybeans by region (forecast for 2015) Brazil; 80% Data on organic soy volume in the graph is related to figures from 2013. Source: ProTerra Foundation, Danube Soya, FiBl The ProTerra Foundation expects to expand its certification program by 25% to 4.5 million MT of soybeans in 2016. In the coming years the Foundation plans to certify soybeans in additional countries, such as Argentina, Austria, Italy, Paraguay and Ukraine. Danube Soya Standard Production of soybeans certified to the Danube Soya Standard launched in 2012 is projected to reach 120,000 MT in 2015, more than double that of the previous year. Danube Soya (DS) rules limit the production to the Danube river region and hence its materials originate mainly from Austria, Hungary, Italy, Croatia, Serbia, Slovakia, Romania and Ukraine. The expansion of DS soybeans is driven by the growing demand for locally produced, non-gmo products in Austria, Switzerland and Germany. The greatest uptake of DS soy is recorded in the egg and poultry industries in Austria. Box 1 WHAT DOES HARD IP MEAN? India; 9% Europe; 9% China; 2% USA; 2% Others; 2% The term Hard IP is widely used in the commodity sector and refers to Hard Identity Preserved. In a Hard IP system the GMO-free identity (or any other special characteristic) of the material is preserved along the supply chain (from the farm to the supermarket shelf) by physical segregation, tests and documentation. In the case of Soft IP there is no tracking at farmer level, but the integrity of a presumed GMO-free commodity is checked and verified at an upper stage of the supply chain (e.g. at the port of the importing country). This is usually achieved through a quick GMO test. This report focuses primarily on non-gmo soy products certified in Hard IP systems. 3
Non-GMO Soy Synopsis December 2015 Box 2 MAIN CHARACTERISTICS OF DIFFERENT NON-GMO STANDARDS The Cert ID Non-GMO Standard was launched in 1999 by Cert ID as the world s first broad-range non-gmo certification program. The company, headquartered in the USA, is the leader and a pioneer in non-gmo certification in the global soy market. The Cert ID Non-GMO label on products assures a maximum 0.1% GMO content. Strict segregation measures, fully documented traceability and GMO testing are required in the program along the entire supply chain. There are no social or environmental criteria associated with this label. The ProTerra Standard was also introduced by Cert ID, in 2005. The standard is based on the Basel Criteria for Responsible Soy Production (initiated by Coop Switzerland and the WWF). ProTerra operates the same 0.1% maximum GMO content threshold as the Cert ID Non-GMO Program. In addition, Pro- Terra meets a number of social and environmental sustainability criteria, including the prohibition of farming on areas with high ecological value such as rainforests. In 2012, ownership and responsibility for the ProTerra certification program were transferred to the ProTerra Foundation. The Danube Soya Standard was created in 2012 by the Danube Soya Association, a non-profit organisation with the aim of promoting GMO-free soy cultivation in Europe. The main characteristic of the program is its limited geographical scope a group of regions along the Danube river. Furthermore, the standard meets sustainability requirements, such as prohibiting the dessication of soybeans and the protection of labour and human rights. Land use and general pesticide regulations also form part of the standard. Danube Soya can be viewed as low-carbon soy in Europe compared to other standards because of minimal transport requirements (no overseas transport is needed). The Organic certification excludes the use of chemicals and fertilisers in production, in contrast to the aforementioned standards. However, social criteria are not required by the label. It also differs in that organic certification often has to comply with national or, in the case of the EU, regional legislation. In 2016, the DS certified soy volume is predicted to see a 100% growth again and reach 250,000 MT. There is great potential for certifying larger DS volumes in the near future. Firstly, the capacity of DS certified soy crushing plants is estimated at 1.4 million MT in 2015 this means that a much greater DS output could be achieved than the current level. In addition, the soy harvest in Europe is forecast to increase by 50% between 2012 and 2015 and is expected to continue to expand. Organic Standard In 2013, certified organic soy production amounted to 344,200 MT worldwide, according to the estimate of the Research Institute of Organic Agriculture (FiBl). Close to half of this volume came from Asia where China alone produced 121,800 MT of organic soybeans. North America and Europe accounted for 36% and 13% of the organic soy volume certified under the Organic Standard. Organic soybeans are primarily used in China and Europe for food products like soy milk and other soy applications. Organic soy production is expected to increase over the next few years as Brazil reportedly has had additional hectares under conversion to organic soybeans since 2014. Demand for non-gmo soybeans Globally, Europe is the largest market for GMO-free soy products. The bulk of non-gmo soybeans is used as meal for compound feed production in the region. In 2014, non-gmo soy meal demand amounted to 5 million MT in Europe 1, 14% of the total consumption. Germany is the biggest buyer of non-gmo soy meal (1 million MT), followed by Italy (800,000 MT), France (700,000 MT) and Scandinavian countries (745,000 MT). The poultry and egg industries consume most of the GMO-free compound feeds. The aquafeed sector in the Scandinavian countries also contributed to this demand. Uptake from the dairy sector is still low but on the rise. Demand has remained stable in recent years although it suffered a temporary setback in 2014 after the announcement of the German Poultry Association (ZDG) to abandon its policy to use exclusively non-gmo feedstuffs. However, the demand for non-gmo soybeans is growing again due to the strong demand of retailers, particularly from Germany, Switzerland and Austria, for meat, egg and dairy products from non-gmo reared animals. Japan and South Korea also play an important role within the GMO-free soy market with the combined use of 1.0 to 1.5 million MT 1 of non-gmo soybeans in 2014. Unlike in Europe, in Asia these premium commodities are used mainly in the food industry. 1 This amount refers to the use of both Hard IP and Soft IP certified soy meal. 4
Global supply of certified non-gmo soy Publisher organisations: ProTerra Foundation Jan Steenlaan 5, 3725 BS Bilthoven The Netherlands Phone: +31 20 220 2146 E-mail: info@proterrafoundation.org URL: www.proterrafoundation.org Danube Soya Association Wiesingerstrasse 6/9, 1010 Wien Austria Phone: + 43 1 512 17 44 11 E-mail: office@donausoja.org URL: www.donausoja.org Author: Bertalan Kruppa Phone: +36 20 992 1541 Copyright 2015 ProTerra Foundation and Danube Soya Association All Rights Reserved Disclaimer: While all reasonable efforts have been made to provide accurate and reliable estimates, some uncertainties within the results shown may remain. This document does not necessarily represent the official views of the ProTerra Foundation and the Danube Soya Association. 5