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Forging a Strong U.S. Soy Value Chain, Link by Link

By Keenan McRoberts

When it comes to choosing plant protein, global consumers and end users have a host of choices. With so many options, why choose soy?

Soy protein’s composition of essential amino acids sets it apart as the gold standard among plant proteins.

Protein yield per acre from soybeans is unparalleled,[1] making it a preferred, economically advantageous source of plant protein for animal feed, human food, and other applications. Whole beans are processed into a multitude of value-added ingredients – meal, oil, flour, isolates, concentrates, textured protein, and fermented products, each of which has many variations.

Not only does U.S. Soy have nutritional advantages, but it also has advantages when it comes to economics. The U.S. Soybean Export Council’s Dare to Compare campaign shares the value of U.S. Soy with current and potential buyers, highlighting new analyses that demonstrate its nutritional profile, sustainability and refining characteristics.

While buyers have traditionally evaluated soy on crude protein alone, that metric is not the best indicator of how the crop will meet the nutritional needs of animals and aquaculture. Country of origin makes a difference in the quality of soy. The Nutrient Value Calculator (NVC) helps buyers to form a more accurate assessment of U.S. Soy, demonstrating the economic value.

This past fall 2020, the American Oil Chemists’ Society’s (AOCS) 2nd Annual Plant Protein Science and Technology Forum aimed to provide insights into the highly dynamic landscape of plant proteins and to explore specific topics regarding the increasingly important role of plant proteins, including soy, in everyday life.

U.S. SOY: YOUR PARTNER IN INNOVATION

For years, the United Soybean Board (USB) has invested farmer dollars in innovations to improve U.S. soybean product quality for an assortment of end uses, creating opportunities to increase farmer profitability and sustainability, and ultimately resulting in a high-quality product for customers of U.S. Soy.

USB’s core priority has been to increase soybean value for animal agriculture end uses, including poultry, swine, dairy, beef, and aquaculture. One way USB is increasing value over time is by driving protein gains, improving amino acid composition, and improving other elements of the nutritional bundle delivered by U.S. soybeans. Collaborative investments with the Foundation for Food and Agriculture Research and other partners ensure increased shared value in the U.S. soy supply chain. This is an example of a successful partnership that lays the groundwork for a strong future by better serving industry needs.

Current meal investments extend further into plant protein, industrial uses like wood adhesives, and higher-value opportunities from carbohydrate byproduct streams resulting from soy protein isolate and concentrate production.

PROTEIN AND PROTEIN INNOVATIONS: A PANEL DISCUSSION

As part of the AOCS “Emerging Technologies for Plant Protein Quality-Based Supply Chains” session, our panel discussed the trajectory around soy value chain innovations and upgrades. Subject matter experts focused on the economics of protein quality and risk mitigation in future value chain structures, and how these innovations could act as a viable model for the future commercialization of soy protein ingredients in feed and food markets. The panel, which included Rouf Mian of the U.S. Department of Agriculture’s (USDA) Agricultural Research Service (ARS) and North Carolina State University; Seth Naeve with the University of Minnesota; Bart Borg with Standard Nutrition Services; and William Wilson with North Dakota State University, focused primarily on protein and protein innovations.

Protein (amino acids) constitutes approximately 40% of the soybean on a dry matter basis and is part of the approximately 80% of bean meal. The other core components of meal are carbohydrates at about 30% and minerals at 5%. Oil, approximately 20%, makes up the balance of the bean.

The panel cited quality concerns and challenges from synthetic competitors and other alternatives. In response, the U.S. soy industry has doubled down on innovation and sustainability to create a better future for the U.S. soybean value chain. In fact, USB investments in protein improvement have spurred U.S. soy innovations, including a renewed commitment to quality for animal agriculture throughout.

The four panel speakers took attendees on a journey across the soybean value chain in its current state while teasing current and future opportunities to upgrade market signals and innovation around product quality to increase shared value across the chain. For example, there is more value to be gained and shared across the chain as soybean meal crude protein (amino acids) and energy rise. We discussed future breakthroughs in soybean quality, how to improve amino acids, the potential with the High Yield Plus Quality (HY+Q) program spurring innovation in the U.S. soy industry, and overall strategies to help U.S. soybean farmers capitalize on value opportunities.

RAISING PRODUCT QUALITY: BREEDING SOYBEANS WITH HIGH PROTEIN AND IMPROVED AMINO ACID PROFILES

Dr. Rouf M. Mian, acting research leader of the Soybean Research Unit, USDA – ARS and research geneticist at North Carolina State University, spoke about soybean breeding innovations and the gains and challenges in changing protein and amino acid composition without compromising yield and oil, asserting that developing higher value soybeans is critical to raising product quality.

Mian focused on the challenges in breaking the negative relation of seed protein with seed yield and seed oil, advances in simultaneous improvement of soybean seed yield and seed improvement, and the improvement of amino acid profiles of soybean protein and the challenges therein.

As the largest oilseed crop in the world, soybeans produce 59% of vegetable oil and 70% of protein meal globally[2]. In the United States, soy is the second largest field crop. Approximately 70% of the soybean’s value comes from meal and 30% from oil,[3] stated Mian, and soybean meal is the main source of feed protein worldwide.

Decades of breeding focused on yield has caused all soybean-producing regions to experience a decline in protein. Increasing protein has led to challenges, as protein is negatively correlated with both seed yield and oil and meal protein is a product of seed protein and seed oil. Mian is part of the national protein team, collaboratively funded by USB, which is working to reverse this trend.

He said that a strategy to increase soybean value includes changing the breeding focus, adding value with higher protein and improved amino acid levels while maintaining or increasing yield, and utilizing genetic diversity in both cultivated and wild soybeans from Asia. The desired end use value outcome, stated Mian, “is the optimum combination of protein, oil, and yield.”

Mian reiterated that the use of technology is key to improving soybean value.

SOYBEAN QUALITY: BEAUTY IS IN THE EYE OF THE BEHOLDER

Dr. Seth Naeve is a soybean agronomist with the University of Minnesota and associate professor in the Department of Agronomy and Plant Genetics. He also leads the Soybean Production and Physiology Project, which focuses on surveys and research. Naeve addressed soybean quality, dynamic geographic variation, quality measurement, and agronomic practices to increase soybean quality.

Soybean is a “complex and variable product,” he said, that presents both challenges and opportunities in processing and product development. “Variation,” he explained, “provides an opportunity for us to exploit those [quality measures] and identify various niches and needs for utilizing some of those components.”

He said traditional grading systems are poorly correlated with soy’s actual value and that most soybean quality traits extend into the products. “We’re not doing a very good job measuring the actual value of soybean by using traditional grading. Crude protein is a very distant index of value. We’re measuring nitrogen consistent in the seed, whereas the end user, if we’re looking at soybean meal, they’re really interested in available amino acids.”

Additionally, Naeve noted that the first purchasers who can find hidden value will capture additional profit.

In order to manage better soybean quality, he said that the industry must focus on genetics so that farmers are able to choose high-quality seeds; product management, including soil fertility, tillage, drainage, and organic matter; and precision agriculture, including quality variation within fields and precision ag on a mega scale.

In the end, Naeve explained, “We are working to re-define soybean by its most important and valuable traits – to the end-user. Farmers are growing soybeans to make a chicken or a bottle of salad dressing. We want to know how to make the best chicken or the best oil. If we understand the goal, then we can work to provide those final products with the highest value feed or feed-stock possible.”

Naeve summarized that genetics, production management, and precision agriculture will help the industry better manage soybean quality.

A NUTRITIONIST’S VIEW: VALUE POINTS AND METHODS OF QUANTIFYING VALUE ACROSS VARYING SOY QUALITY

Dr. Bart Borg, Director of Nutrition, Standard Nutrition Services in Ames, Iowa, provided an end use (animal nutritionist’s) perspective on soybean value and discussed an approach to raising soybean quality through selection of higher feed value varieties. Borg explained that amino acid and energy content along with nutrient digestibility are key factors in describing soybean value.  Soybean nutrient content, he said, varies from season to season and region to region as well as across soybean varieties. Tools are available to determine end user value of varying soybean quality and to reach soybean producers to influence soybean quality change.

Borg discussed how the content of crude protein in soybean meal has declined. He stated this has not only negatively affected the value of soybean meal, but has also led to decreasing rates of soy inclusion in feeds and the loss of soybean sales.

Borg is part of the soy checkoff HY+Q program’s science team. HY+Q supports the U.S. soy value chain’s commitment to quality and value, in addition to productivity gains. Highlighting soybean quality puts more control in farmers’ hands to increase value, ultimately benefitting end users.

Soybean meal buyers have historically looked at protein content as an overall proxy for the nutritional value of the product. HY+Q’s findings show that measuring protein alone underestimates the economic and nutritional value of U.S. soybeans and that global end users must look deeper into amino acid content and energy to determine the impact of soybean procurement choices on profit. Borg said value exists outside of the traditional protein targets, about 35% for protein and 19% for oil. Formulation software helps nutritionists to sort through these components and allows for discrete ingredient evaluation. Soybean meal’s nutritional bundle encompasses the most valued qualities by its users: protein, amino acids, and energy.

Borg explained that while the relationship between feed value and yield is inconsistent, it is possible to pursue higher quality without being overly concerned that you’re delivering a variety that’s going to yield less and compromise near-term farm revenue opportunities. There is a wide range of value opportunity, reiterated Borg.

OPPORTUNITIES AND CHALLENGES: DIFFERENTIATING SOYBEANS BASED ON ESSENTIAL AMINO ACIDS

Dr. William W. Wilson, University Distinguished Professor and CHS Endowed Chair, North Dakota State University, discussed essential amino acid quality and the importance of testing for quality specificity, which increases the odds of meeting end-user requirements.

According to Wilson, an important emerging challenge and opportunity in soybean marketing is the variability in quality. Soybeans in North America are highly differentiated, due to climate and other factors.

Wilson is working to analyze the effects of testing soybeans for specific quality traits, including essential amino acids. His team has developed a model to analyze costs and risks that may arise for grain handlers to segregate soybeans into high‐ and low‐quality grain flows based on alternative importer purchasing specifications. A model is used to determine optimal testing locations and intensities, in addition to the costs and risks to grain handlers. The model permits blending to determine optimal shipments from separate locations with differing quality distributions. Testing increases the odds of meeting end-user requirements from 49% to 99% (EAA) as a risk management mechanism, providing a framework for agribusinesses, grain handlers, and marketers to make decisions in response to importers’ purchasing requirements and strategies.

Quality characteristics change over time, Wilson said. “Ultimately, this forces greater incentive or need for testing and specification to assure the allocation to the appropriate end users at the appropriate values.”

As buyers become more sophisticated, suppliers are transforming from commodity suppliers to ingredient suppliers. This allows buyers to adjust contracts and purchasing strategies accordingly, as they specify grade factors. For example, buyers who specify protein only may pay a lower price than those who specify functional testing.

Quality consistency, Wilson concluded, is the next frontier of managing the supply chain. “As markets mature, buyers become more demanding and competition is more intense,” he said. “Greater demand on specificity is a way to reduce inconsistency in product performance or increase the probability that the ingredients conform to requirements or expectations.”

In summation, Wilson stressed the importance of quality consistency in soybean and market mechanisms.

IMPLICATIONS: SOY SUPPLY CHAIN INNOVATION

“The global industries that support aquatic and terrestrial livestock production, as well as human and companion animal nutrition, rely heavily on protein that is produced domestically by the U.S. soybean industry,” said Phil Kerr, Ph.D., chief technology officer for Prairie AquaTech. Kerr served as session chair for the Forum.

Kerr said innovation and collaborative efforts among U.S. academic, government and industry partners are making significant progress to reverse a decline in protein quality, while still maintaining agronomic performance. He pointed to the creation of a large soybean genetics and breeding consortium across the U.S. that is focused on increasing the density of essential amino acids like lysine and the sulfur-containing amino acids, methionine and cysteine, as one example.

“Equally important to the investments into the genetic improvements of soy protein quality are the development of rapid, accurate, rugged and affordable methods for determining protein and oil content, as well as essential amino acid quality throughout the supply chain,” he continued. Novel, spectroscopic devices are being evaluated under conditions seen from the farm to the point of delivery to soybean elevators and processors.

“Once these methods can be rigorously validated in multiple supply chain environments,” Kerr said, “they offer the potential to enable entirely new U.S. soybean merchandising and marketing opportunities. These opportunities offer the potential to build upon and expand the reputation for delivering the highest and most consistent quality soybeans and soy-based protein products to the domestic and global markets that depend so heavily on them.”

Kerr said that soy supply chain innovation continues to rapidly emerge. From breeding to nutrient quality to EAA differentiation, the U.S. soy supply chain strives to best supply its customers with a high-quality, nutritious, and sustainable product that fits their requirements.

MEETING THE CHALLENGE: SOY VALUE CHAIN COORDINATION

The panelists expressed optimism that the soy protein value chain would continue to be upgraded to capitalize on the strong foundation for the future.

“All products go from commodities to specialties or differentiation,” explained Wilson. “It’s a fact we have quite a bit of differentiation on the supply side of soybean and it’s incumbent ultimately on buyers or their suppliers to further segregate or differentiate these supplies. Ultimately, all buyers’ demands are not the same.”

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