Yield, Demand and Profits with High Oleic Soybeans
It’s not often that farmers radically change the way they produce a crop. But when it happens, it can make a major, positive impact on their profitability.
High oleic soybeans are an opportunity to do just that. The added nutritional qualities and improved heat stability are already opening doors for long-term profit opportunities from end-use customers: food and industrial users, alike.
While the soybean industry isn’t looking to change the entire crop, high oleic soybeans hold the potential to add demand and long-term profit potential for all U.S. soybean farmers. In fact, if the soybean industry meets its goal of 18 million planted acres to high oleic soybeans by 2023, high oleic soybeans will be the fourth-largest crop in the United States – behind corn, commodity soybeans and wheat.
“When we talk about something that will be 30 percent of our production in fewer than 10 years, we’re no longer talking small,” says John Motter, pictured here, a soybean farmer from Jenera, Ohio, and a farmer-leader on the United Soybean Board. “High oleic is a big opportunity. It’s not a niche; we’re talking long-term solutions for our customers – big customers.”
The Yield Farmers Want
High oleic soybeans still remain fairly new to the soybean-production conversation, having been grown in select regions of eight states this season. But John Motter has grown high oleic soybeans on his northwest Ohio farm for four years. In fact, Motter believes in high oleic soybeans so much that he dedicates 100 percent of his soybean acreage to them.
“Four years in, and I’m still seeing yield parity with other commodity farmers in my area,” says Motter. “As farmers, we need to meet our needs, but we also need to deliver what the customer is asking for. That’s why I grow high oleic and why others should join me.”
High oleic soybean varieties must meet criteria on both sides of the soybean equation: for farmers and end-use soy oil customers. First, the seed companies ensure that high oleic soybean varieties meet strict yield guidelines, culling any variety that does not meet the same yield and agronomic parameters set for other commercial varieties. Then, the oil from the varieties must meet the specifications set by key oil customers.
Since seed companies put high oleic soybeans in their R&D pipelines more than a decade ago, they have had time to develop these varieties properly.
“Long term, Pioneer will continue to develop our high oleic seed varieties using elite genetic lines along with the most advanced defensive traits in order to provide farmers with yield performance that’s as good or better than the commodity beans they may be growing,” says Russ Sanders, director of food and industry markets at DuPont Pioneer. “Our high oleic programs will also take into consideration long-term weed-management strategies for our farmers, arming them with the tools they need to manage their fields.”
The extra time spent breeding is paying off. Farmers throughout the soybean-growing regions are happy with high oleic’s performance in their fields. That satisfaction leads to repeat customers and expanded acres.
“Making sure that we breed for the right yield and agronomic and resistance packages is our priority, and farmers are really pleased with the performance they are seeing on their farms,” says Sarah Vacek, soy quality traits product manager for Monsanto. “We’re seeing an impressive number of return farmers year after year. The farmers who stay with our high oleic varieties are a real testament to their performance.”
That’s true for Isabella Chism, who has grown high oleic soybeans with her husband, Kent, for three years on their north-central Indiana farm.
“The first year, we thought we’d try them out, and they performed so well we kept growing them,” says Chism. “They yield the same, and you get a fair premium for the limited cleanout. It’s definitely a profit opportunity for our farm.”
The Demand Farmers Need
High oleic soybeans meet end-use customer needs that commodity soybean oil cannot satisfy. So, as commodity soybean oil continues to meet its own customers’ needs, together the two oils add to the overall demand for U.S. soy.
High oleic soybean varieties produce oil with increased functionality that food customers don’t get from commodity soybean oil. High oleic oil contains less saturated fat than competing vegetable oils and requires no partial hydrogenation, which creates trans fats. While many customers are happy with commodity soybean oil, high oleic is an ideal option for baked goods or fried foods. These benefits will appeal to major food companies and restaurants, which can help farmers to regain the 4 billion pounds of demand lost because commodity soybean oil no longer meets the needs of certain customers.
The oil’s increased functionality and stability also open new doors for industrial manufacturers that could use high oleic soybean oil in their formulations. Researchers have found high oleic soybean oil outperforms commodity soybean oil in high-heat applications and competes closely with petroleum. These properties help make high oleic soybean oil more attractive to manufacturers of products, such as synthetic motor oil, lubricants, hydraulic fluids, grease, self-adhesives and even cosmetics.
Experts expect high oleic soybean oil to reach 9 billion pounds of food, industrial and export demand by 2023.
A Competitive Market
U.S. soy’s customers are not demanding change. Instead, those who need the functionality that high oleic offers have simply found other sources of vegetable oil to meet their needs: palm, canola and sunflower, to name just a few.
The same processors that handle U.S. soy also handle their customer needs with those other oils. Canadian canola-filled rail cars are regular visitors to processing plants that used to dedicate themselves solely to U.S. soybean oil. Imports of palm oil to the United States have increased fivefold in the last decade.
But that isn’t the end of the story. If U.S. soybean farmers can prove they will grow a consistent, abundant supply of high oleic oil, the food customers who have turned to other oils will return to their tried-and-true partner: U.S. soy. But first, farmers have to grow them.
Source : unitedsoybean.org