Amino report – May 2021

Global pork production still under pressure

Global pork production is set to be lower than expected this year. Output will still grow; however, a combination of disease, high feed costs, lower efficiencies, and increased imports by China have tempered the expected growth in global production.

In other news

Carbon markets: Opportunity or pie in the sky?

Farming in step with nature is nothing new to most farmers. However, being environmentally friendly and economically sustainable are usually challenging, especially in developing countries where farmers do not have adequate state support or subsidies to implement the (sometimes lofty) ideals of legislation. Recent research around carbon sequestration using farmland has led to new ideas that could allow farmers to be directly compensated for adopting environmentally friendly practices. The concept of carbon credits has been around for a number of years. In the early 2000s, a carbon trading platform operated in the United States, but ultimately failed because prices for carbon credits became too low. That idea has been revisited lately, sparked by research into methane-reducing feed additives. The same principles are applied to livestock farming, which means carbon credits can be earned by reducing methane emissions from cattle and sold to any carbon-positive entity. Of course, challenges exist, such as accurately measuring carbon output from every activity on-farm. Additional questions also arise: What about other greenhouse gases and contaminants, and carbon-neutral practices that have negative environmental effects? What about upstream industries supplying inputs, services, and raw materials. Should that be part of the equation? Given the inherent complexity, practical application may be too difficult right now, but many things are possible today that were considered impossible a couple of decades ago. Nevertheless, it is an intriguing idea for future agriculture.

Argentine exports lumbering ahead despite challenging start to harvest

The Parana River, Argentina’s main waterway for grain and soy exports has dropped to such a low level that ships are loading up to 7 000 t less than usual. The level at Rosario, the largest export hub, has dropped to just 0,90 m, while the long-term average is around 3,6 m. Low rainfall in neighbouring Brazil has caused the water level to drop substantially in the last few weeks and is expected to drop even further in coming weeks, just as the harvest is set to get going. Argentina is expected to harvest 45 million tonnes of soybeans and 50 million tonnes of maize. Adding to the troubles, port workers went on strike in the last week of May in protest over not being considered essential workers and, thus, being entitled to be vaccinated first against COVID-19. According to the unions, port workers are essential to keep the economy afloat and should be eligible for early vaccinations. Agricultural exports are an important source of foreign currency for Argentina and reached nearly USD 10 billion (approximately ZAR 135 billion) in the first four months of the year, thanks to high commodity prices.

USDA confirms anti-dumping duties for French methionine imports

The United States Department of Agriculture (USDA) has announced the final anti-dumping duties to be imposed on French methionine products. All methionine from France will be subject to a duty of 16,17%, except Addisseo’s methionine, which will carry a 43,82% duty. In late July 2020, Novus filed an anti-dumping duty petition with the United States Department of Commerce (DoC) against competing French, Spanish, and Japanese methionine suppliers to the US market. The reason given was the steep increase in imports since 2017, which more than doubled between 2017 and 2020. In February of this year, the DoC released its preliminary findings. They found that the case had merit and suggested anti-dumping duties on methionine produced by companies in France (43,82%), Spain (31,98%), and Japan (135,1%). The final determinations from the DoC are expected in June, with possible implementation by 1 July 2021.

METEX declares force majeure

A leaking hydrochloric acid tank forced Metabolic Explorer (METEX) to halt amino acid production at its plant in Amien, France. Production has been gradually shut down while an assessment is underway, and repairs are expected to commence in early June. It is not known how long the plant will be out of production; however, some sources have indicated it could be up to a month. METEX only recently bought the plant from Ajinomoto Animal Nutrition Europe as part of Ajinomoto’s gradual exit from the commoditised amino acid market. The plant has an estimated production capacity of 100 000 t lysine per year.

Price Graphs

Estimated replacement prices, CFR Durban

Protein supplement

courtesy of JVD Commodities (Pty) Ltd

Protein prices in South Africa have come down sharply in the last month, which can be attributed but not limited to:

  • gradual strengthening of the ZAR against the USD;
  • lower Chicago Board of Trade (CBOT) soya meal prices;
  • planting in the US for 2021–2022 season ahead of the five-year curve;
  • weather in the US currently favourable for new crop development;
  • availability of local sunflower seed and soya beans;
  • positive crush margins; and
  • local crushers increasing discounts as meal becomes more readily available.
Soybean Meal Month Average
Delivery Month Previous Month Current Month  Change
May-21 R7 881,00 R7 259,00 -R622,00
Jun-21 R7 898,00 R7 293,00 -R605,00
Jul-21 R7 959,00 R7 318,00 -R641,00
Aug-21 R8 002,00 R7 346,00 -R656,00
Sep-21 R8 035,00 R7 404,00 -R631,00
Oct-21 R8 061,00 R7 458,00 -R603,00
Nov-21 R8 080,00 R7 498,00 -R582,00
Dec-21   R7 553,00  
Sunflower Oilcake Month Average
Delivery Month Previous Month Current Month  Change
May-21 R5 350,00 R5 050,00 -R300,00
Jun-21 R5 328,00 R5 050,00 -R278,00
Jul-21 R5 368,00 R5 050,00 -R318,00
Aug-21 R5 397,00 R5 050,00 -R347,00
Sep-21 R5 418,00 R5 050,00 -R368,00
Oct-21 R5 436,00 R5 150,00 -R286,00
Nov-21 R5 448,00 R5 448,00 R0,00
Dec-21   R5 513,00  

CBOT soybean meal, July 2021

source: tradingview.com

CBOT corn, July 2021

source: tradingview.com

Shipping Update

Global rollover rates rise

Global shipping and freight networks are facing increasing pressure, while it seems shipping companies are doing very little to ease the pressure. The latest rollover rates published by project44 show that the difficulties experienced over the past year are set to continue. A rollover means cargo that was scheduled to be shipped on a specific date on a specific vessel was not loaded. The cargo is then rolled over to the next available ship by the shipping line. This could add days or sometimes weeks to shipping times. Average rollover rates for most ports and shipping lines have increased compared to last year, with some notably worse. CMA CGM was the worst performer with 56% (up by 7%), followed by ANL (54%, up 30%), ONE (53%, up 4%), and Hapag-Lloyd (51%, up 5%).

Ambitious plan to modernise Durban Port

President Cyril Ramaphosa announced a R100 billion investment to modernise Durban Port in an effort to improve the port’s efficiency and increase its container handling capacity. Durban Port has been facing criticism from both domestic and international quarters due to berthing delays, overall congestion, and poor productivity. As part of the project, a new container terminal is to be constructed in Point Precinct, while Maydon Wharf channel will be deepened to allow larger modern ships to enter. The project is expected to take 10 years to complete and should boost the port’s capacity to 11 million twenty-foot equivalent units (TEU) per year, up from the current 2,9 million.

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’ll be back next month with some more additions to our amino acid encyclopaedia!

In Focus

by Ashley Grimsell

L-Methionine

part 2

This issue of AA: In focus is a follow-up of our previous issue, digging even deeper into the L-methionine conundrum.

Sections in this report will cover the physiological effects – such as gut development, growth, and feather development – caused through the supplementation of L-methionine. It was evident from the previous report that the greatest benefit of L-methionine supplementation is attained for young monogastric animals, as they lack the sufficient activity of a specific enzyme which converts D-methionine into L-methionine.

Conclusion

It is well known that the growth and development of young animals sets the stage for their future performance. In order to enhance and support the growth of monogastric animals in the earlier phases of their lives, it is clear that L-methionine supplementation is beneficial.

References

Bauchart-Thevret, C., Stoll, B., Chacko, S., Burrin, D.G., 2009. Sulfur amino acid deficiency upregulates intestinal methionine cycle activity and suppresses epithelial growth in neonatal pigs. American Journal of Physiology-Endocrinology and Metabolism, 296(6), pp.E1239–E1250. 

Shen, Y.B., Weaver, A.C., Kim, S.W., 2014. Effect of feed grade L-methionine on growth performance and gut health in nursery pigs compared with conventional DL-methionine. Journal of Animal Science, 92(12), pp.5530–5539. 

Shen, Y.B., Ferket, P., Park, I., Malheiros, R.D., Kim, S.W., 2015. Effects of feed grade L-methionine on intestinal redox status, intestinal development, and growth performance of young chickens compared with conventional DL-methionine. Journal of Animal Science, 93(6), pp.2977–2986. 

Zhang, Y.N., Xu, R.S., Min, L., Ruan, D., Kim, H.Y., Hong, Y.G., Chen, W., Wang, S., Xia, W.G., Luo, X., Xie, C.Y., 2019. Effects of L-methionine on growth performance, carcass quality, feather traits, and small intestinal morphology of Pekin ducks compared with conventional DL-methionine. Poultry Science, 98(12), pp.6866-6872.

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