U.S., Morocco Seek Resolution on New Rules for Soybean Sales

March 30, 2023 | Aaron Putze, APR

A highly contagious virus impacting U.S. poultry flocks poses a risk to soybean sales to Morocco, a key trading partner for Iowa soybean farmers.

The revelation came during conversations between Moroccan ag officials and Iowa Soybean Association (ISA) leaders last week in Casablanca.

Avian Influenza is a highly contagious poultry virus that has caused financial losses to the U.S. poultry industry. A highly pathogenic strain hit the U.S. in 2014-2015. Additional versions of the virus shed by migrating birds continue to plague the U.S. poultry industry.

As a result, large poultry producing countries like Morocco are seeking additional safeguards to protect its flocks from the deadly virus.

“Morocco prides itself on having enough food for its people – at least three months of inventory on hand at any time,” said ISA President Randy Miller. “Food safety is a big deal to the Moroccans, just as it is for U.S. consumers.”

Virus migrating

Negotiations have been underway for more than a year between U.S. animal health experts and ag officials and their Moroccan counterparts. Of concern is the risk of the virus migrating across the Atlantic Ocean to the North Africa country via the movement of soybeans and other raw commodities needed by Moroccan livestock and poultry producers.

“Biosecurity is very important and a constant worry,” said Yousef Mikou, director general for Alf Sahel, Morocco’s largest feed mill. “Our country’s leadership has made good changes to strengthen biosecurity, but we must always stay vigilant.”

ISA CEO Kirk Leeds accompanied Miller to Morocco. The visit with representatives of Alf Sahel and other Moroccan soybean buyers and processors followed a similar fact-finding mission to Egypt where Miller and Leeds were joined by ISA president-elect Suzanne Shirbroun.

While the currency deflation and rampant inflation being experienced by Egypt have been well documented, concerns about future U.S. soy exports to Morocco due to the presence of high path influenza was a significant discovery. 

All commodities sourced by Morocco from the U.S. would be impacted by the new requirements including corn, soybeans, cotton seed and dried distillers grain.

Moroccan ag officials are wary of a poultry virus outbreak in a country so dependent on the industry. 

“You understand the concern, but arriving at a solution won’t be easy,” said Miller who grows soybeans on his farm near Lacona in south central Iowa.

Prolific feed producer

A family company founded in the early 1970s, Alf Sahel produces more than 1.2 million metric tons (mmt) of poultry, dairy, sheep, horse, donkey, camel and rabbit feed annually.  

Over the decades, the company has diversified its operations to include ownership and operation of poultry hatcheries, a poultry and turkey harvesting facility and retail center where customers can purchase a variety of fresh poultry and turkey meat.  

More than 90% of the poultry produced in Morocco retails in live markets. The country is home to 15,000 traditional butcher shops employing 40,000-50,000 people in Morocco. 

“The transition from live markets to retail where birds are fully dressed and ready to eat will take time,” Miller said. “But the evolution will happen as more people get jobs and interests outside of work. And as they get busier, they’ll have less time to spend preparing meals. 

“The desire for more convenient meal prep will drive increased poultry production which will also drive the need for more soybeans for feed.”

Alf Sahel is also expanding into aquafeed production, bringing the facility’s annual output to more than 1.6 mmt and accounting for more than 35% of Morocco’s total feed output. It purchases 95% of the ingredients needed for feed and can tailor production for any animal species.

Safeguarding flocks from disease is taking on added importance as the largest producers in Morocco become more integrated – from owning and operating breeders, hatchlings and finishing facilities to processing plants and retail centers. 

“We have to fight every day as there is much competition,” Mikou said.

Trusted ally

Morocco is the fifth wealthiest country and boasts the fourth strongest economy in Africa. It’s a prolific producer of eggs, poultry, milk, sheep and goats. Its population of 37 million is expected to grow to 46 million by 2025. 

Like many of its North Africa neighbors, Morocco’s population will become increasingly urban and more affluent in the coming decades, meaning its appetite for protein (and raw commodities like soy) will continue to grow.

“It’s a politically stable country and has sound economic policies,” said Leeds. “That, combined with a population that’s growing, increasingly affluent and relatively young makes it an ideal market for U.S. soy.”

Morocco is the only country in North Africa that has a free trade agreement with U.S. It’s a prolific manufacturer of automobiles, phosphate and vaccines. Its Mediterranean climate is ideal for fruit and vegetable production. 

Drought, freshwater availability, and high energy costs pose challenges to its agricultural productivity.   

New rules

In January 2022, Morocco drafted new rules for the importation of raw commodities, including soybeans. The amended provisions seek to prevent the movement of poultry viruses from countries with known outbreaks, including the U.S.

Over the past year, U.S. and Moroccan ag and health officials have been negotiating the merits, practicality, and enforceability of the draft provisions. One that’s rumored would require soybeans harvested within 10 kilometers (roughly 6.4 miles) of an affected poultry farm be quarantined in the U.S. for 30 days prior to export.

“Since 2016 and following Covid, the country is becoming more protective,” said Khalid Benabdelgelil, representing U.S. Soybean Export Council in Middle East and North Africa, including Morocco. “Restrictions on importing animals and feed are additional measures to be safe. But only suggestions at this time as both parties work diligently toward a solution.”

Yet the uncertainty is concerning to feed millers like Alf Sahel.

U.S. soybean farmers are the preferred soybean supplier for Moroccan feed millers, processors and farmers. More than 80% of Morocco’s annual soy consumption is sourced from the U.S. due to its consistent quality and high amino acid content.

While no one knows for sure when a resolution will be found, all agree that an abrupt stop of U.S. soybean exports to Morocco would be disruptive for both parties.

Iowa and U.S. soybean farmers would lose a key trading partner at a time when every bushel of demand matters. Moroccan feed buyers and farmers would have no choice but switch from their preferred raw commodity to canola, wheat, corn and other substitutes sourced from elsewhere including France, Germany and Romania. 

“Today, we are afraid if a vessel of soy starts from U.S. because we don’t know if it can unload,” said Mikou. “Other countries are in same position. Regardless of where it comes from, it’s very expensive for a boat to sit in port.”

It’s common for several vessels containing U.S. soy to be traversing the Atlantic to Morocco monthly with other shipments planned. 

As negotiations between Moroccan and U.S. officials continue, so do soybean sales. 

All are confident that a resolution will be achieved benefiting the people of both countries.  

“Everyone is working in earnest to find a solution,” said Benabdeljelil.

“We are optimistic,” added Mikou.

---

Back