Long-range plan serves as blueprint to drive demand, profitability for farmers
Looking at the numbers, there’s no doubt that U.S. soy has evolved from a support crop to a major player in the global marketplace. In 1991, the year the soy checkoff was created, the value of the U.S. soy crop was $11 billion. Fast forward to 2014 and the overall value has nearly quadrupled, to $40 billion.
“Demand for our crop is one of the fundamental reasons why the checkoff was created.” – Lewis Bainbridge, South Dakota soybean farmer
Those values illustrate the sharp increase in demand that has taken place due in part to the efforts of the checkoff. The checkoff conducts research and promotion among vital domestic and international customers who make feed, food, industrial products and more. Those activities create and expand markets for U.S. soybeans.
Demand drives profitability, and the checkoff aims to stimulate demand growth through its Long-Range Strategic Plan by defining and promoting the U.S. Soy Advantage. Based on soy’s component quality, sustainability and value, that advantage builds preference for U.S. soy in the face of competitive threats both domestically and abroad.
“Taking a customized approach to our end users helps us to build preference for U.S. soybeans,” says Lewis Bainbridge, a South Dakota soybean farmer who leads demand-building activities for USB. “We aren’t operating in a one-size-fits-all market. Maintaining and extending our reputation as a trusted supplier is key to our future success.”
But innovation must be constant in order to make sure U.S. soy meets all end user needs, including the demand for high-quality meal and sustainability. Without a steady stream of new technology, the U.S. soy industry risks losing market share to competitors.
Through its Long-Range Strategic Plan, the United Soybean Board (USB) is making sure that never happens. USB is more focused than ever on increasing demand. In fact, of the nine goals set in this plan, five are focused on building demand. It’s this blueprint for building demand that will help ensure a strong and profitable future for U.S. soybean farmers.
Competition growing for animal-feed market share
Poultry and livestock farmers demand high levels of protein to maximize their animals’ potential. While many animal ag farmers have relied on soybean meal for years to meet their needs, other alternatives are available.
“From our perspective as animal feeders, we would like to see more emphasis on the protein level in soybeans,” says R. Dean Boyd, Ph.D., technical director for Hanover Company, a pork-production and food-processing firm. “That has not been the focus of soybean farmers over the last few years when selecting seed.”
Soon, poultry and livestock farmers will have additional options to meet their animals’ needs – and that may not bode well for the U.S. soy industry.
Dow AgroSciences recently announced it will offer a new high-protein canola meal for hog and poultry farmers in 2017. That new product will have a protein content of around 44 percent, compared with canola meal’s typical protein level of around 37 percent.
“From our perspective as animal feeders, we would like to see more emphasis on the protein level in soybeans.” – R. Dean Boyd, Ph.D., technical director for Hanover Company
And Ajinomoto Animal Nutrition Group, Inc. announced that it will begin feed-grade production of the essential amino acid tryptophan in North America in 2017. The company will have the capacity to produce approximately 3,000 tons of tryptophan per year.
Both announcements pose threats to the U.S. soy industry and its share of the animal-feed market, which makes it more important than ever for farmers to grow high-quality soybeans.
“Soybean farmers can gain back some of their lost market share by growing a bean that has a higher level of protein,” says Boyd. “Soybean meal is an extremely good source of protein because it has such a high-quality balance of amino acids, but the protein levels need to be better.”
The protein levels in U.S. soybeans have been in decline over the last 20 years. However, extensive global research does support that U.S. soybean and soybean meal products contain more nutrients than soybean meal of other origins. Still, in order to stay competitive, improving component quality to add more value to U.S. soy is a focus of the Long-Range Strategic Plan.
Building markets sustainably
Today, more and more customers are asking to have their raw materials sustainably sourced – a demand that U.S. soybean farmers are able to meet. Through the U.S. Soybean Sustainability Assurance Protocol (SSAP), sustainable soybean production is documented at a national scale with a third-party audited and certified aggregate approach. Goals for continuous improvement outlined in the SSAP reinforce to customers the dedication soybean farmers have to continuous improvement.
“This protocol was developed to match our practices to what our customers want to know about. Our international customers like the SSAP, and that means that U.S. soybean farmers should like the SSAP as well, since it helps us with stability in the form of continued access to world markets,” says Larry Marek, an Iowa soybean farmer who helps oversee strategy for the checkoff.
To date, more than 4.3 million metric tons of certified-sustainable U.S. soy have been shipped to important markets like China, Vietnam and Japan.
Industrial end users also leverage the sustainability of U.S. soybeans. That will continue, as the checkoff’s Long-Range Strategic Plan includes a goal to increase industrial preference for U.S. soy even more.
Soybean meal and oil are readily available, sustainable alternatives to petroleum-based ingredients used in adhesives, plastics, coating, lubricants, rubber and more. And biodiesel serves as a sustainable transportation fuel and heating option.
Detroit’s Big Three Automakers – Ford, General Motors and Fiat Chrysler – have supported biodiesel blends for nearly a decade. And while biodiesel has been a great generator of demand for U.S. soy, the new uses don’t stop there. The checkoff partners with many manufacturers to commercialize new soy-based products, giving farmers and others even more opportunities to buy products that contain U.S. soy.
“Ford first partnered with the soy checkoff in 2002 to develop soy-based foams for automotive seating, and our partnership continues to grow,” says Debbie Mielewski, Ford’s senior technical leader, materials sustainability. “The checkoff introduces us to other smart people with a common goal of increasing sustainability and utilizing soy in innovative ways. Soy seating meets or exceeds every performance and durability requirement. Ford has it in millions of vehicles every year, and I hope to see it used extensively in many other industries, including the mattress, furniture and agricultural equipment industries.”
Meeting demand for high oleic
The soy checkoff believes high oleic soybeans will give the U.S. soy industry an opportunity to win back market share and increase demand from end users looking for an oil that performs under high-heat conditions. Food companies also want to provide their customers with better, more healthful products. Fry cooks like high oleic soybean oil because it has all the benefits of soybean oil without trans fats.
“This is an opportunity to take a look at what we can do to help the soybean industry grow.” – Kevin Wilson, farmer leader
After testing high oleic soybean oil in their fried and baked foods, chefs say they’re impressed with the oil’s performance. But farmers have to provide a consistent supply of the high-functioning oil before big food companies will make the leap.
More U.S. soybean farmers are responding to meet that demand. This fall, farmers are expected to harvest more than 450,000 acres of high oleic soybeans – nearly double last year’s numbers. Nebraska and Kansas farmers planted high oleic soybeans for the first time this year, and the varieties are available in more states each planting season.
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