IL Soybean Producers Learn Basics of Increasing Profits at Regional ISA Workshops
Date Posted: November 16, 2012
Bloomington, ILIncreasing protein and oil content of Illinois soybeans is one secret to enhancing farmer profitability and protecting market share from Brazil, representatives from ADM, Bunge and Cargill told farmers at workshops funded by the Illinois soybean checkoff this month.
“The Illinois Soybean Association (ISA) hosted three workshops to educate farmers about how the price received at local elevators is determined by the value of the soybean’s protein and oil,” says Don Guinnup, soybean farmer from Marshall, Ill., and ISA District 14 director.
“The more protein and oil per bushel, the more value it brings.
"We see this in narrower basis.”
Cargill co-hosted the first Illinois workshop Nov. 5 in Bloomington; the second was Nov. 8 in Cairo with Bunge as co-host; and the third held Nov. 15 was co-hosted by ADM in Decatur.
Representatives from all three soybean processing companies emphasized that their customers purchase soybeans based on protein and oil content, not bushels.
Brazil is taking away market share because U.S. soybeans no longer supply the same standard quality levels.
“We used to guarantee our soybean meal had 48 percent protein but had to move our guarantee to 47.5 percent with discounts down to 46.5 percent because of inconsistent soybean quality, which upset customers,” says Jennifer Bareksten, protein export trader for ADM.
“Brazil guarantees 48 percent so we (the U.S.) are losing favor in the global market.”
To deliver soybean meal with 48 percent protein, processors need to start with soybeans that have at least 35 percent protein at 13 percent moisture.
Processors also want a minimum of 19 percent oil.
U.S. Falling Behind
According to U.S. Soybean Export Council (USSEC) Soybean Quality Survey data, U.S. protein levels have been trending downward since the 1980s and fell below the 35-percent minimum about five years ago.
The data show U.S. oil levels have remained under the standard 19-percent level the whole time.
“Brazil has produced soybeans with higher protein content than the U.S. for nine of the past 10 years, and they have a distinct advantage in oil,” says Richard Galloway, United Soybean Board consultant focusing on soybean composition and value.
“A bushel of Brazilian soybeans has about one more pound of oil and three more pounds of protein than a U.S. bushel.”
Andres Martin, commercial crush manager at Bunge, told the group in Cairo that Brazil soybeans average 20 percent oil and 36 percent protein and can trade at values more than 25 cents per bushel higher than lower quality U.S. soybeans.
The quality difference between Brazil and the U.S., as well as the decline within the U.S., can be partially attributed to geography and weather.
“Soybeans grown closer to the equator have a natural tendency to produce more oil and protein than those grown farther away because of the effect longer growing seasons and higher average temperatures have on the plant’s development,” says Dan Davidson, Ph.D., ISA’s director of strategic research.
“The overall trends correlate to production increases in northern U.S. states and the latitudinal comparison of Brazil to the U.S.”
Animal nutritionist Nick Bajjalieh, Ph.D., of Integrative Nutrition, Inc., emphasized the need to reverse the trend by reminding farmers that “soybean products continually compete for usage with other sources of the same components they provide.
"Therefore, we need to continually improve our soybeans for them to remain competitive.”
Variety Selection is Critical
Farmers who attended the workshops learned they can fool Mother Nature and grow soybeans with 19 percent oil and 35 percent protein wherever their farms are, though.
“This is a near-term opportunity.
"We can improve U.S. and Illinois soybean quality through better use of existing tools and seed products already on the market.
"Farmers and the other value chain participants need to recognize the opportunity exists and its pursuit is feasible, then work together to the mutual benefit of all,” says Bajjalieh.
“When choosing which soybean varieties to plant, we as farmers need to look at the protein and oil levels as much as yield potential and disease tolerance,” says Joe Murphy, soybean farmer from Harrisburg, Ill., and an at-large director for ISA.
“The checkoff funds a program called VIPS that compiles this data for us to compare online.”
VIPS (Varietal Information Program for Soybeans) enables researchers from the National Soybean Research Laboratory (NSRL), the University of Illinois and Southern Illinois University Carbondale to analyze hundreds of soybean varieties from numerous seed companies each year.
The data from throughout the state is compiled online at www.VIPSoybeans.org as an unbiased resource to help farmers choose varieties with the most potential for the next season.
Data from the 2012 growing season will be available by Dec. 1.
“Farmers should also ask their seed dealers for varieties that provide 19 percent oil and 35 percent protein in addition to yield,” concludes Davidson.
For more information, call 309-808-3610.