Severe drought has withered Australia’s soybean production to the point where one company said it could use almost all of last year’s crop in its own soymilk production.
During the previous Millennium Drought, demand for soy-based products was far lower than it is now.
But with demand for plant-based food booming in Australia, this time around the shortage has sent prices soaring; with a Queensland trader telling the ABC prices had lifted between $400 and $500 a tonne over the last three seasons, to sit at $1,500 to $1,600 a tonne.
Northern New South Wales farmer and Soy Australia chair, Shane Causley, told ABC Rural the price of soybeans traded on global exchanges was around US$8 a bushel ($436 a tonne), while Australian soybeans were trading at AU$1,087 a tonne.
IBIS World reports soymilk holds the dominant market share in the alternative milk category, at 48 per cent, but almond milk’s popularity has rocketed up in the past few years, moving from 17.7 per cent in 2014 to 44 per cent in 2019.
The Australian Oilseeds Federation told the ABC domestic soybean processors were competing fiercely for the limited crop.
“We’re a relatively small producer in global terms, but when it comes to our local industries that depend on Australian soybeans, they’re really been hit hard by the shortages,” said chief executive Nick Goddard.
Australian soybeans are traditionally grown in the NSW Riverina, northern NSW and southern Queensland.
In the Riverina, irrigation water prices are sitting at levels previously only seen temporarily in the previous drought, and growers are using their limited allocation this season to produce high value crops like nuts and cotton.
While a lack of rainfall has dashed hopes of producing summer crops further north.
In order to meet local demand, farmers who would normally grow sugarcane in far north Queensland are now producing the crop.
In a statement to the ABC, soymilk company Vitasoy, which is owned by beverage company Lion, said it was sourcing soybeans from far north Queensland for the first time:
Sadly, the one-in-100-year drought has caused a severe shortage of Australian-grown organic and conventional soybeans.
This severe drought has meant this summer’s crop only delivered a small fraction of the usual and expected output for the industry. Vitasoy alone needs most of this output.
Mr Causley said drought meant Australia was producing “less than half of what we used to grow” before the drought.
Figures from the Department of Agriculture show it has issued eights permits for soybean imports in 2019 alone, compared with just three in 2018, and three in 2017.
United States’ President Donald Trump’s trade war with China has seen US soybean growers pushed out of a major market, and global prices slump as a result.
But nearly 95 per cent of the US soybean crop is genetically modified, and many Australian manufacturers have committed to being free of genetically modified (GM) ingredients.
When it comes to organic, the locally-grown crop is even smaller, and for this reason, Vitasoy said in its statement it would be looking to source soybeans from overseas.
Drought has already forced one major wheat buyer, Manildra, to import grain from Canada for the first time in 11 years, a complex process that must meet strict regulatory standards.
Mr Goddard said companies that required organic soybeans were buying from overseas, for the first time in Australia’s history.
“Some of the processors have had to look offshore, and they have had to go through similar processes to Manildra, to ensure Australia’s strict biosecurity requirements are upheld.”