Color Out as Soybean Grading Factor

JEFFERSON CITY, Mo. (DTN) -- U.S. soybean farmers can stop worrying that their beans won't make grade this fall due to off colors.

On Friday, the USDA Agricultural Marketing Service (AMS) published a final rule to the Federal Register revising the U.S. Standards for Soybeans, officially removing soybeans of other colors (SBOC) as an official grade-determining factor.

Moving forward, the Federal Grain Inspection Service (FGIS) will only use three main factors -- damaged kernels, foreign material and splits -- when assigning a grade to yellow soybeans. While no longer a grading criterion, SBOC will be available for informational purposes only upon request. The change will become effective Sept. 1 to correspond with the beginning of the new soybean marketing year.

During a phone interview with DTN, Virginia Houston, director of government affairs with the American Soybean Association, said that the organization was pleased by the final rule.

"We're very grateful to USDA for their partnership and working to find a solution for this issue," she said. "We had pushed for USDA to get the rule in place by Sept. 1 in order to qualify for the new crop marketing year, and we're really grateful to see that's going to happen."

Historically, SBOC levels have been low and rarely affected the grade of soybeans. However, during the past few years, the number of soybeans that failed to make a No. 1 grade due to SBOC of 1% or more increased. Data published by FGIS in February showed that 7.81% of graded soybeans during calendar year 2021 and 16.88% in 2022 had SBOC above the threshold for No. 1 yellow soybeans. By contrast, in the previous decade, that percentage never exceeded 1.22%.

The increase in SBOC percentages has correlated with the increase in acreage planted to Enlist E3 soybeans, which have been popular with growers combating herbicide-resistant weeds. The share of U.S. soybean acres planted to Enlist E3 has grown from less than 5% in 2019 to more than 45% in 2022, according to data shared by Corteva last September.

Soybeans naturally produce some off-color seeds. The color can be influenced by genetics as well as environmental factors, pests and disease. The occurrence of off-color Enlist beans has been acknowledged since the technology was first introduced. However, its rapid adoption has created a situation wherein larger volumes of soybeans entering the grain stream have failed to meet No. 1 grade requirements due to SBOC, causing headaches for grain buyers and exporters.

In 2022, FGIS conducted a study to evaluate whether the presence of SBOC had an impact on the quality of soybean protein and oil. The study found no significant differences in official protein or oil content. Read the results here: https://www.ams.usda.gov/….

In the published final rule, AMS stated that the increase in the amount of SBOC in officially graded soybean lots over the past two years has led to a decrease in the marketability of U.S. soybeans versus those from other exporting countries. Houston noted that other world soybean exporters don't have color as a grade-determining factor.

"This is a competitiveness issue for the U.S.," she said. "We don't want U.S. soybeans to be at a disadvantage because we have SBOC in our standards and others like Brazil and Argentina don't."

At The DeLong Co. Inc. in Clinton, Wisconsin, one of the Midwest's largest suppliers of food-grade corn and soybeans, news of the change to grading standards was met favorably.

"Removing SBOC as a grade-determining factor was a good move since most of the soybeans traded go for crushing, and SBOC has little effect, if any, on the value of the oil or meal," wrote Bo DeLong, who heads the company's export sales group. "As for the smaller 'food-grade' market, SBOC can still be graded and put on the grade certificate. It just isn't used in determining the grade. I believe it will have no impact on export sales."

In a news release, the National Grain and Feed Association (NGFA) also commended USDA for its decision.

"NGFA appreciates the efforts of USDA Under Secretary for Marketing and Regulatory Programs Jenny Moffit and Agricultural Marketing Service (AMS) Deputy Administrator Arthur Neal as well as the leadership of the American Soybean Association (ASA) and the North American Export Grain Association (NAEGA) to address this issue that has been impacting the U.S. soybean market over the past two years," NGFA President and CEO Mike Seyfert said. "The amount of seed coat variation resulting in U.S. soybeans has increased over this period and, as a result, more soybeans have been downgraded on account of SBOC. USDA recognizes the importance of consistent and widely recognized grade standards to the marketability of our agricultural products. The final rule published today will help fulfill the intent of U.S. official grade-determining factors and factor limits."

DTN reached out to Corteva for comment and received the following: "Corteva is committed to providing innovative solutions to farmers that help them meet their operational goals. We are aware that the USDA AMS has published its final rule revising the United States Standards for Soybeans by removing soybeans of other colors (SBOC) as an official factor today. Corteva supports USDA's goal in working to provide clarity to all stakeholders. We are currently reviewing the updated rule and look forward to continuing to engage with our customers on the topic."

When asked if removing SBOC might result in unintended consequences for soybean farmers, Houston said that ASA worked with the U.S. Soybean Export Council to map out any possible negative repercussions.

"With the Enlist bean, the removal of SBOC as a grade-determining factor is the best solution," she said, citing the FGIS study that found no differences in protein and oil quality. "It's important to remember that the U.S. Standards for Soybeans is a living, breathing standard. It can be amended as needed for the needs of the industry.

"We did amend it in 2007 to remove test weight as a grade-determining factor, and there's nothing to say that down the road there may be a need to amend the standard again," Houston continued. "That's one reason that the partnership between the soybean industry, the grain trade and the USDA is so important to make sure we're keeping our lines of communication open when issues like this arise so we can address them in a manner that protects the U.S. soybean industry."

The final rule published on the Federal Register can be found here: https://www.federalregister.gov/….

Jason Jenkins can be reached at jason.jenkins@dtn.com

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