Amino report – July 2021

AGP ban: What can we learn from China?

On 1 July 2020, China banned antibiotic growth promoters (AGP) in feed. For years the Chinese government has pushed for less AGP to be used in feed to safeguard food production and limit antibiotic resistance in animal production. A year on, there are some lessons to be learned.

In other news

Parched Parané

The Parané River is at its lowest level in 77 years. The low water level has throttled grain exports from the Argentine river port of Rosario and is threatening water supply to millions of people. This prompted the government to declare a state of emergency in large parts of the river basin. The low water levels are forcing ships to carry up to 25% less grain, pushing high shipping costs even higher. The crisis also comes at the peak of Argentina’s maize harvest season. Even though dredging the riverbed to maintain a minimum depth is possible, it is expensive and could cause serious environmental damage as natural wetlands could be drained as a result. This is the latest setback in one of the world’s leading agricultural exporters. The ongoing battle of producers and exporters against constant government intervention in agriculture continues as the government proposed a government-managed toll system to finance the dredging operations and replaced a ban on beef exports with an export cap to limit food inflation. Argentine agricultural exports already carry some of the highest export taxes in the world, and is the main source of foreign currency for the embattled country.

Taming Russian food inflation

The Russian government is fighting to contain food inflation without creating shortages in the market. Russia has become a powerhouse in international grain trade in the last few years. Government investments in increasing agricultural production has made it possible for Russia to become one of the leading wheat exporters in the world. The drive to substitute imports with local produce to counter various sanctions has been largely successful but has also driven up many basic food prices. The government has been coming under increasing pressure to deal with the problem and even President Vladimir Putin publicly criticised the government’s slow response. A number of measures have been introduced recently, such as an export tax on wheat, as well as minimum levels for state stockpiles of certain goods. A crackdown by the Russian veterinary agency Rosselkoznadzor (the Federal Service for Veterinary and Phytosanitary Surveillance) on specific imported feed additives, has also resulted in increases in the cost of premixes and could, potentially, impact the efficiency of Russian meat production. This has already, and will continue, to drive up the cost of meat production. Balancing the long-term goal of self-sufficiency and agricultural exports with short-term price stability is a difficult act, with no easy answers.

Faltering soybean meal

Chinese soybean imports are expected to fall during the second half of 2021. Pork prices have dropped sharply in recent months, while wheat prices have increased substantially, putting profitability under severe pressure. Cheap wheat has been used as a replacement for expensive maize, but the increased demand for wheat has driven prices up in response. The Chinese government has also been pushing to decrease crude protein in diets and, thus, soybean meal, in an effort reduce the country’s dependence on imported soybeans. The combination of low and negative pork margins and lower inclusion rates has lowered soybean meal demand considerably. Slow Chinese demand, and a bumper harvest in the United States (US) could have a significant impact on soybean prices, giving some respite from high feed prices.

Price Graphs

Estimated replacement prices, CFR Durban

Protein supplement

courtesy of JVD Commodities (Pty) Ltd

Protein prices in South Africa have stabilised in the last month following all-time high prices. A combination of a stronger rand and softer Chicago Board of Trade (CBOT) soybean meal prices have contributed to lower import prices. Larger than expected soybean acreage in the United States (US) has softened international prices. Local factors also contributed to lower prices as positive crush margins encouraged crushers to offer discounts to clear meal inventories.

Soybean meal month average

Delivery month

Previous month

Current month

Change

Jul-21

ZAR 7 286,00

ZAR 7 453,00

ZAR 167,00

Aug-21

ZAR 7 314,00

ZAR 7 484,00

ZAR 170,00

Sep-21

ZAR 7 486,00

ZAR 7 543,00

ZAR 57,00

Oct-21

ZAR 7 578,00

ZAR 7 718,00

ZAR 140,00

Nov-21

ZAR 7 611,00

ZAR 7 828,00

ZAR 217,00

Dec-21

ZAR 7 679,00

ZAR 7 925,00

ZAR 246,00

Jan-22

ZAR 7 731,00

ZAR 7 860,00

ZAR 129,00

Feb-22

 

ZAR 7 790,00

 

Sunflower oilcake month average

Delivery month

Previous month

Current month

Change

Jul-21

ZAR 4 800,00

ZAR 4 850,00

ZAR 50,00

Aug-21

ZAR 4 900,00

ZAR 4 900,00

ZAR 0,00

Sep-21

ZAR 4 900,00

ZAR 4 950,00

ZAR 50,00

Oct-21

ZAR 5 300,00

ZAR 5 190,00

− ZAR 110,00

Nov-21

ZAR 5 350,00

ZAR 5 650,00

ZAR 300,00

Dec-21

ZAR 5 450,00

ZAR 5 700,00

ZAR 250,00

Jan-22

ZAR 5 500,00

ZAR 5 750,00

ZAR 250,00

Feb-22

 

ZAR 5 800,00

 

CBOT Corn

source: tradingview.com

CBOT Soybean

source: tradingview.com

CBOT Soybean meal

source: tradingview.com

CBOT Soybean oil

source: tradingview.com

Shipping Update

The Shanghai Containerised Freight Index (SCFI) rose above the USD 4 000 (ZAR 5 936) level for the first time ever in July. It came as no surprise, since freight rates have been on the rise since late last year. Shipping rates from China to South Africa have seen a 400% increase over the past seven months. Given the continuous shortage of containers and perpetual delays in ports worldwide, the end is unfortunately not in sight yet.

The amino acid encyclopaedia

by Ashley Grimsell

The amino acid encyclopaedia will contain new terms with each report, providing more information about these terms that appear in the technical update and that may be of interest to you, our reader. The terms that feature in the encyclopaedia may also be relevant to subsequent issues of the amino report.

We will be back next month with some more additions to our amino acid encyclopaedia!

In Focus

by Ashley Grimsell

Valine

In the June 2021 issue of the Amino Report, our focus was on the amino acid isoleucine, which some authors consider equally fourth-limiting with the amino acid for this issue, valine, in poultry diets.

However, valine has been classified as the fifth-limiting amino acid in swine diets (Siebert et al., 2021). Valine, along with isoleucine, are classified as branched-chain amino acids. These amino acids contribute approximately 35–40% of the essential amino acids that make up body protein (Allameh & Toghyani, 2019).

Conclusion

Although valine does not top the list of essential amino acids, a dietary deficiency of this amino acid will lead to reduced performance in both poultry and swine. It is important to keep in mind that maintaining the correct ratios of different amino acids in the diet will be beneficial to the producer and environment.

References

Allameh, S. & Toghyani, M., 2019. Effect of dietary valine supplementation to low protein diets on performance, intestinal morphology and immune responses in broiler chickens. Livestock Science,229, pp.137–144. doi: 10.1016/j.livsci.2019.09.025 https://www.sciencedirect.com/science/article/abs/pii/S1871141319301799

Tavernari, F.C., Lelis, G.R., Vieira, R.A., Rostagno, H.S., Albino, L.F.T., Neto, A.O., 2013. Valine needs in starting and growing Cobb (500) broilers. Poultry Science, 92(1), pp.151–157. doi: 10.3382/ps.2012-02278 https://www.sciencedirect.com/science/article/pii/S0032579119398372

Siebert, D., Khan, D.R., Torrallardona, D., 2021. The optimal valine to lysine ratio for performance parameters in weaned piglets. Animals, 11(5), p.1255. doi: 10.3390/ani11051255 https://www.mdpi.com/2076-2615/11/5/1255

In addition to the above references, this document also contains information from the following sources: