Animal Nutrition Breakthroughs Support Soybean Demand in South Dakota

Soybean meal has long been the primary demand driver in soybean markets, sought after by the animal agriculture sector for its high levels of crude protein, complete amino acid profile and strong energy content. In fact, it has historically accounted for an estimated two-thirds of a bushel's value for U.S. soybean producers. Soybean oil, meanwhile, has been described as a by-product of the crush process.

A shift in demand drivers for soybeans

However, that narrative has changed in recent years.

This has largely occurred as a result of the growing push for clean fuels — in the case of soybeans, demand for biodiesel, renewable diesel and sustainable aviation fuel (SAF) — that has brought soybean oil to the forefront. For many soybean processors, oil has become the principal driver of soybean demand. The "by-product" label has been traded in for "co-product," one that feels far more accurate given the fact that each accounts for roughly half of a soybean bushel's value.

The market shift over the past decade has led to the expansion of domestic crush capacity, which grew by approximately 14% from 2023 to 2025 and is projected to reach 2.78 billion bushels, an additional 9% in growth, by 2030. Record crush volume — combined with slowed activity on the export side of the equation — have increased our domestic surplus of soybean meal.

Some of that soybean meal will find its way into export markets, particularly those witnessing increased demand for animal protein while still lacking adequate soybean processing infrastructure. But soybean farmers are also exploring ways to increase soybean meal use in animal nutrition here at home in order to retain more of the value and stabilize market demand.

Research explores processing techniques for soybeans in cattle rations

Zachary Smith, Ph.D., is Associate Professor of Beef Cattle Nutrition and Management at South Dakota State University and serves as faculty supervisor of the Ruminant Nutrition Lab and Ruminant Nutrition Center in Brookings.

"Beef cattle have certain requirements for specific fats, fatty acids and protein," said Smith. "When we think about soybeans, we really think about the protein — a whole soybean consists of roughly 40% crude protein — and the essential amino acids a cow needs."

Due to some anti-nutritional factors in raw processed soybean meal for adult cattle, inclusion rates typically sit in the 5-10% range. However, Smith is engaged in several research studies looking at different processing methods that can potentially raise those recommended inclusion rates higher.

"I asked the question, 'What if we took soybeans, left all the fat and heat-treated the protein?'" he explained, referencing one of his current research studies funded by soybean farmers through their checkoff. His team is testing beef cattle rations with soybeans exposed to high pressure and high heat conditions in a process called extrusion. "It's been very promising," he said. "We've seen some of our largest responses in carcass weight by feeding heat-treated soybeans."

Next spring, Smith will also be leading a study on high-oleic soybeans, a genetic variety that has gained popularity in dairy cattle feed formulations. The focus of Smith's research will be to understand the benefits of feeding high-oleic soybeans to beef cattle in the late finishing stage, particularly its impact on insulin function.

Aquaculture represents emerging market for soybeans

Modern aquaculture practices are still relatively new. Over the past decade, farming methods to raise both fin fish and shellfish for commercial use have developed quite rapidly. In fact, roughly half of the seafood consumed in the world today was raised on a farm.

South Dakota-based Houdek™ — with its headquarters in Volga and a research and development facility in neighboring Brookings — has been at the forefront of this aquaculture industry boom. Its signature product, ME-PRO, is a microbially-enhanced feed substitute for fishmeal that has real ramifications for the state's soybean farmers.

"If you're farming fish as opposed to hunting them, you have to feed them," said Jeremy Javers, Vice President of Technology at Houdek. "And as that farmed fish population continues to grow, we have to come up with sustainable feed solutions. Aquaculture needs really high concentrations of protein in the total mixed ration. Our process takes protein levels up to about 75% on a dry matter basis and eliminates the majority of the anti-nutritional factors fish might encounter."

Javers noted that Houdek was co-founded by SDSU professors Bill Gibbons, Ph.D., and Mike Brown, Ph.D., under the name Prairie AquaTech. As the company expanded offerings for additional animal species, its name changed to Houdek — a nod to South Dakota's native soil type. Houdek currently ships a majority of its ME-PRO overseas to meet demand in the Atlantic salmon industry, but it has also garnered attention in sea bass, sea bream and shrimp aquaculture applications.

"I'm confident that we'll be able to replicate this soybean process like we did with corn during the ethanol boom. We're taking soybeans and further segregating and concentrating the different components to serve different markets — getting the carbohydrates where they need to go, the protein where it needs to go and the oil where it needs to go," said Javers. "And that's really how you drive value."

Opportunities to expand soybean meal use in swine rations

Swine producers have long demonstrated a preference for soybean meal as a high-protein ingredient in feed formulations, with inclusion rates at 15-20% in the nursery phase and topping out around 25-30% in later phases of development.

"Soybean meal is an easily digestible protein source with an amino acid profile that matches really closely with the pig's requirements," said Rafe Royall, Ph.D., who serves as Assistant Professor/Extension Specialist - Swine Nutrition at South Dakota State University. "It contains a variety of different compounds that positively impact the health of our animal that have anti-inflammatory and even some antiviral capabilities that really help reduce the impact of various disease challenges."

Royall's research includes examining the optimal timing for introducing a corn-soybean diet to pigs as they begin weaning. "If we're able to do that more quickly without hampering performance or hampering health, it can increase the total amount of soybean meal used throughout the life cycle of that pig," he explained. He also referenced sow health research involving amino acid delivery via soybean meal and other nutrients in the final trimester of pregnancy, which has yielded promising results. "We've seen decreases in pre-weaning mortality, increases in total number of pigs born alive and we believe it will also help to mitigate some of the impact that we've seen in the U.S. swine herd on sow mortality," Royall said.

Looking ahead, he hopes to continue exploring the impact of nutrition on meat quality, and one avenue toward achieving that result might be through the inclusion of high-oleic soybean meal in swine rations. "High-oleic soybeans have shown through various research trials to be an awesome way of improving pork quality," he said. "So, with that initiative in mind, I could see high-oleic soybeans really starting to take more of a foothold in the industry really soon."

Animal nutrition continues to stand out as economic engine for soybean producers

As in-state processing expands and innovative farmer-funded research unlocks new nutritional potential across ruminant, swine and aquaculture systems, animal agriculture remains a significant demand driver for soybean producers. To learn more about ways this investment is creating sustainable, long-term value here in South Dakota, talk to your district director or visit sdsoybean.org.