Due to uncertainty surrounding European deforestation laws, EU compound feed manufacturers are facing a "frozen" soy market, according to Fefac, the European feed industry association. Fefac estimates that the costs for the European livestock sector could reach €1,5 billion throughout 2026.
The EU will soon be required to demonstrate that seven commodities are deforestation-free. Besides soy, these include palm oil, coffee, cocoa, rubber, cattle, and timber, and (some) products made from them.
The EU Deforestation Regulation (EUDR) was postponed by one year to December 30, 2025, for large companies and June 2026 for small businesses. The European Commission recently informed the European Parliament that it is considering postponing the deforestation law by another year. This is because the IT system is experiencing problems that could lead to repeated and prolonged outages. Companies and organizations that are already ready for the new rules, such as Nestlé, Mars Wrigley, Tony's Chocolonely, and Rainforest Alliance, opposed the proposal.
Less than a month later, Brussels changed its position. According to a new proposal, the EUDR for large and medium-sized enterprises should simply take effect on December 30, 2025. However, no inspections or enforcement would be carried out until mid-2026. Small businesses would be granted a six-month extension and would not have to comply with the deforestation law until December 30, 2026.
In addition, the European Commission wants to abolish reporting requirements for traders further down the supply chain, such as retailers and food manufacturers in the EU. They would no longer be required to submit due diligence declarations. This would mean that a batch of a raw material would only need to be entered into the IT system once, upon market entry, and the importer who first places the products on the EU market would bear the responsibility. This would significantly reduce the burden on the IT system.
Fefac wants a postponement for all market players
The European Feed Manufacturers' Federation (Fefac) has sent a letter to European agricultural ministers advocating for a postponement for both small and large companies. Fefac considers this necessary to "avoid serious trade disruptions, avoid further cost increases for the European livestock sector, and limit inflation on animal products."
According to FEFAC, the industry fears that enforcement will be imposed retroactively for the six months without inspections. FEFAC President Pedro Cordero states in the letter: "Suppliers have withdrawn their offers for deliveries in 2026; the remaining offers for 2025 have become scarce and are accompanied by significant increases in EUDR price surcharges. Existing purchases of soy products for the first and second quarters of 2026 are now overshadowed by legal uncertainty."
FEFAC expects this will lead to disruptions in soybean supplies from key countries of origin, with additional costs of up to €1,5 billion for the European livestock sector. "This seriously undermines the EU's vision for agriculture and food, which is precisely aimed at strengthening the competitiveness of the European livestock sector," Cordero said.
According to a new impact analysis from the industry association, EUDR risk premiums currently range between 5% and 10% above normal market prices for soybean meal (or €20 to €40 per tonne). According to FEFAC, European demand is expected to be around 15 million tonnes of soybean meal in the first half of 2026.
This means the additional costs for the European feed and livestock farming sectors are estimated at €250 to €500 million in the first half of next year. This will primarily affect the poultry sector, which relies heavily on soy as a high-quality protein source, but also the pig sector, according to FEFAC. Market premiums may also be higher, according to the organization, because it is not yet possible to accurately estimate how much product is already compliant with the EUDR.
According to the impact analysis, a rise in the price of soybean meal could also increase the price of other protein sources, particularly oilseeds (approximately 23 million tons for the EU feed industry). This cost increase is estimated at €250 to €300 million in the first half of 2026. FEFAC also expects margins on synthetic amino acids to increase.
The new proposal for the deforestation law still needs to be approved by the European Parliament and the agricultural ministers of the member states. They need to meet quickly to ensure the implementation date.