Soy Canada

SOYBEAN PROCESSING WORKSHOP PRESENTATIONNOVEMBER 16, 2017BRANDON, MANITOBA

Overview

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1) Soy Canada & Mandate

2) Soybean Sector Update & Trends

3) Growth in Western Canada

4) Commodity Soybean Protein Levels

5) Canadian FTAs - Soy Products

6) Soy Canada’s Strategic Plan

Soy Canada Members / Les membres de Soy Canada

TRADE POLICY & MARKET ACCESS

Maintain and expand market access by working to remove barriers

Seek improved trade policies/agreements

Communicate and educate at all levels

Build strong relationships

GOVERNMENT RELATIONS &

INDUSTRY PROFILE BUILDING

COORDINATE RESEARCH

& INNOVATION

Advocate for funding

Align efforts across Canada

Support and collaborate with research organizations

Promote Canadian soybeans

Develop new markets

Promote new uses

SUPPORT MARKET DEVELOPMENT

Our Mandate

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Canadian Soybean Sector 2017-18 Snapshot

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Record high acreage and production levels across Canada:

• Acreage increased by 30% over the last year to 7.2 million acres

• Production to increase by 27% over the last year to 8.3 million tonnes

• 2016 exports reached 4.8 million tonnes valued at $2.8 billion

• 2016 Farm Cash Receipts climbed to $2.8 billion

• Soybean sector contributes $5.4 billion to Canada’s GDP

• Over 31,000 farmers are growing soybeans

Source: Statistics Canada CANSIM Tables, 2016 Census, Soy Canada Economic Impact Assessment

Acreage & Yield Trends

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Source: Statistics Canada CANSIM Tables

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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Acreage2008 2017 % Increase

Seeded Area(acres) 2,971,300 7,282,500 145%

2008 2017 % Increase

Yield(bu/ac) 41.5 42.2 2%

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39

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Average Yield

Production & Export Trends

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Source: Statistics Canada CANSIM Tables

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4.5

6.5

8.5

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Production2008 2017 % Increase

Production (MT) 3,335,900 8,321,100 149%

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(f)

Exports2008 2017 (f) % Increase

Exports (MT) 1,910,600 6,000,000 214%

Soybean Processing Trends

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Source: Canadian Oilseed Producers Association (COPA), AAFC Outlook for Principal Field Crops, October 13, 2017

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1.2

1.4

1.6

1.8

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(f)

Tonn

es (m

illio

ns)

Volume of Canadian Soybean Processing (2008-2017)

2008 2017 (f) % Increase

Processing(MT) 1,296,412 1,900,000 47%

Soybean Sector National Outlook 2017-18

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Soybeans are forecast to be the 3rd largest exported crop from Canada

Domestic processing is forecast to rise marginally to 1.9 million tonnes

Exports expected to rise to 6 million tonnes

World supply of soybeans estimated to rise to 4.4 billion bushels

Source: AAFC Outlook for Principal Field Crops, October 13, 2017, USDA

Soybean Sector National Outlook 2017-18(continued)

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• Top export markets: China, U.S., Japan, Europe, Asia

• EU decision on reregistration of glyphosate will have a significant impact on market access

• Increase in Chinese soybean imports expected to be modest resulting from domestic agriculture reforms

• Chinese efforts at encouraging the utilization of feed mixes with a large soy meal component may positively impact demand

Source: Statistics Canada CATSNET Analytics

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2014 2015 2016

China

U.S.

Japan

Soybean Sector National Outlook 2017-18 (continued)

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Soybean prices are forecast to decrease from last year to $390 to $430/t. Impacted by:

• Strengthening CDN Dollar• Weaker USDA estimated weighted farm price• Higher crude oil prices

Key factors to watch:• Harvest progress in Eastern and Western Canada• US crop conditions and harvest progress• US export sales • South American planting conditions• The strength of Chinese buying

Source: AAFC Outlook for Principal Field Crops, October 13, 2017, USDA

Western Canada Acreage Trend

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Source: Statistics Canada CANSIM Tables

Fastest expanding crop in Western Canada

Soybean seeded area has increased by 506% since 2010 to 3.1 million acres in 2017

Soybean acreage represents roughly 5 percent of principal field crop total planted acres

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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Acre

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WEST EAST

Western Canada Production Trend (tonnes)

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Source: Statistics Canada CANSIM Tables

Crop 2010 2011 2012 2013 2014 2015 2016 2017 % Increase

Soybeans 435,400 413,700 770,200 1,186,600 1,271,000 1,570,300 1,971,500 3,029,100 596%

Lentils 2,004,800 1,573,500 1,537,900 2,261,700 1,987,000 2,540,500 3,248,200 2,438,600 22%

Peas, dry 3,018,200 2,502,000 3,340,800 3,960,800 3,810,100 3,200,700 4,835,900 3,861,600 28%

Canola 12,688,100 14,498,400 13,766,500 18,461,500 16,351,300 18,316,500 18,361,300 19,633,900 55%

Wheat, all 21,062,200 22,715,900 25,115,100 34,911,900 27,413,900 25,687,700 28,803,800 24,477,400 16%

Oats 2,071,200 2,839,200 2,512,300 3,606,800 2,676,700 2,974,400 2,837,000 3,546,100 71%

Beans, all dry 107,900 85,300 156,500 122,900 148,700 128,600 134,600 181,700 68%

Barley 6,984,300 7,432,000 7,488,800 9,748,300 6,701,800 7,785,900 8,371,500 6,916,300 -1%

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Increasing Protein Levels

Major R&D priority of the Canadian soybean sector relates to increasing protein levels in commodity soybeans

High protein soybeans command a premium in the marketplace because of the rich and nutritional value they offer in livestock feeds

New variety technology exists to combine yield, maturity and protein characteristics into one

Increasing protein level in the west has a large role in attracting regional processing investment

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Increasing Protein LevelsWestern Canadian protein levels are on the rise and are competitive against the U.S.• In 2016, the average protein level of commodity soybeans in Western Canada climbed to 38.7%.• In 2016, the average protein level of commodity soybeans the U.S. was 39.5%

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Prot

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Average U.S. Soybean Protein Levels

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Average Western Canada Soybean Protein Levels

Source: Canadian Grain Commission Harvest Survey 2016, USSEC Soybean Quality Annual Report 2016

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Canadian Trade of Soy Oil & Meal Products

Federal government recently concluded or in the process of pursuing multiple free trade agreements (FTA) with key export markets:

• CETA provisionally came into force this Fall, eliminating EU import tariffs on Canadian soybean oil and meal products

• TPP - currently under renegotiation - will reduce or eliminate all tariffs on soybean products exported to TPP countries, including existing tariffs on soybean oil in Japan, Australia, Malaysia and Vietnam, as well as soybean meal shipped to Vietnam

• NAFTA – Existing agreement sets import tariffs on soy oil and meal products at zero. Canadian negotiators are seeking to maintain the existing tariff arrangement

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Soy Canada Strategic Plan:10 Million Acres of Opportunity

Plan to double the growth of the soybean sector over the next decade

Production targets, natural capital commitments, food-grade soybean production targets, processing and export targets

Well on track to reaching production goals and targets

Soy Canada Goals & Targets

Double production in the next decade 2016 2027

TOTAL SEEDED AREA (ACRES) 5,467,100 10,000,000Eastern Canada 3,592,100 4,000,000

Western Canada 1,875,000 6,000,000YIELD (BUSHELS/ACRE) 44.1 48.2

Eastern Canada 46.1 53Western Canada 40.1 45

TOTAL PRODUCTION (TONNES) 6,462,700 13,000,000Eastern Canada 4,491,200 5,750,000

Western Canada 1,971,500 7,250,000

Increase world-leading high-quality of food-grade production by 25%

2016 2027 FOOD-GRADE PRODUCTION (TONNES) 1,250,000 1,800,000

SEEDED ACRES 1,000,000 1,250,000

Increase competitiveness, exports andprocessing of commodity soybeans

2016 2027 PROTEIN CONTENT

Dry matter basis (13% moisture)

Eastern Canada 40.6 (35.3) 41.1 (36)Western Canada 38.7 (33.7) 40.2 (35)

Whole Soybean Exports (Tonnes) 4,500,000 10,500,000Processing Capacity (Tonnes) 1,878,000 2,500,000

Build on Canadian soybeans’ contribution to natural capital

• Canada’s soybean sector will work to improve the natural environment that supports our industry

• Be recognized in Canada and around the world as a global leader in sustainable production of high-quality soybeans

Thank You

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