During every U.S. growing season there are some geographic regions in which the soybeans are too dry due to drought or hot winds, and some regions in which the soybeans are too wet due to excess autumn rains/fog/dew. The elevators will test each load for moisture content, then carefully mix these two types together in order to reach the standard grain moisture percentage requirement of 12% to 13%. Unlike most seeds, the soybean has a hard outer shell that must be removed first in order to properly process the bean. The moisture level is absolutely crucial for the processing of beans, as the first dehuller machines in the crusher’s facility are very sensitive and can run slow or malfunction if the incoming soybeans’ moisture level is not correct and consistent. The beans must be allowed to sit in a bin for 30 days after mixing to allow the moisture to transfer from the overly “wet” beans to the “dry” beans until the moisture is finally equalized.6 If U.S. soybean farmers were forced to comply with the standards of traceability mandated by the EU mandatory traceability, they would have to deliver not only their soybeans to the elevator, but also the seed receipts attesting to the specific field origin of each batch of soybeans unloaded by the farmer. These receipts would have to follow the beans all the way to the ships and finally to the ports of the European country where they are unloaded. This presents an enormous nightmare to everyone in the supply chain.
But “They Can Do It,” So Why Not U.S. Commodity Soy?
Even with all of this evidence pointing to the impossibility of the traceability of soybeans in bulk transport, there are still some demands (particularly in Europe) for the complete traceability process because other companies are able to “trace” their product from beginning to end. One company touting their traceability and certification process is a Brazilian soybean crushing company named Imcopa Co. Imcopa is located in the state of Parana which is the largest soybean producing state in Brazil; the state produces about 20 million tons/year. The current crushing capacity of the company is around 2 million tons/year with 98% of its output exported. Imcopa supplies Nestlé and Kraft with lecithin (a soybean crushing byproduct), meeting a major share of Nestlé’s demand and 100% of Kraft’s. Imcopa primarily began certifying and producing non-GM products in response to Nestlé’s demand for such products in order to remain in compliance with EU’s GM food labeling laws.8
This strategy is common to many major food brands who wish to keep the “GM” label off of their products to avoid consumer backlash. Imcopa has contracts with 11 Brazilian co-operatives who supply the company with around 80% of their soybeans. The company partners with individual farmers and wholesalers to ensure the segregation of non-GM soybeans. Imcopa inspects and validates the entire production process from the processing of the original seeds through harvest and then finally to shipment. They test the soybeans for GM traces at nearly every stage of production and often several times during each stage. Through these processes Imcopa is able to trace their product from start to finish, but then there are the high costs of such thoroughness. At the beginning of the company in 1999, the total cost of implementing the system was $900,000 and around $3.60/ton. This cost rose to $22/ton due to higher costs for the traceability and certification process, as well as higher premiums for the contract farmers and dropping of the benefit-cost ratio from 26.8 in 1999, to 2.4. Imcopa is able to weather these higher costs because they can charge more for their product.9
Imcopa is a completely vertically integrated company. They contract the farmers who must adhere to strict guidelines and then process and ship their own products. Traceability works in such a vertically integrated system, but at a high monetary and time cost. In April 2013, the high cost of this “non-GMO” soy finally reached the point that virtually all of the United Kingdom’s large poultry producers who previously used “non-GMO” feed halted their use of it.10 British supermarket Tesco ended its 11-year commitment to non-GM-fed poultry due to a lack of reliable supply on nonGMO feed. In a letter to Tesco customers, published on May 17, 2013, technical director Tim J. Smith claimed "We could not continue with a promise we cannot be sure it is possible to keep. There simply isn't enough non-GM feed available. It is a global supply issue – 80% of the world's soya is now modified."