Growing specialty soybeans can make a lot of dollars and sense.
Ray Gaesser says it's almost a must in today's farm economy. The Corning, Iowa, farmer has grown seed soybeans for about 25 years. He contracted nearly 2,000 acres this year with Stine Seed.
The seed soybeans will generate about $50 more per acre compared to commodity counterparts, Gaesser says.
"That can be the difference between making money and not making money today," Gaesser claims. "Earning a premium is a huge deal."
It may take extra work to grow and store identity-preserved soybeans, but farmers who do say it's well worth it.
Thanks to the foresight of the Illinois Soybean Association (ISA), with financial support from neighboring state soybean groups and industry partners, farmers from across the nation can find value-added opportunities at soybeanpremiums.org. It's the only national website that informs farmers about different types of premium programs in their areas.
Some of the more common types of higher-value soybeans include non-GMO, food-grade, organic, high oleic and soybeans for seed.
"There's premium opportunities in almost every growing region, which surprises a lot of folks," says Mark Albertson, ISA director of market development. "The website is an excellent resource to connect farmers with companies that want to buy premium soybeans."
FILLING A NEED
The soybean premium marketplace was not well-defined until soybeanpremiums.org, Albertson asserts.
ISA launched the website in 2008. At the time, commodity soybean prices averaged just south of $10 per bushel, according to government statistics. For most farmers, that barely covered cost of production.
As of press time, soybean prices are less than $9 per bushel. Association officials contend the website is more important and popular than ever. Data on usage isn't currently available.
"Farmers are looking for any opportunity they can to command a higher premium for soybeans ... and make a profit," Albertson says.
About 75 companies are listed on the website. Buyers post premium programs, details and contact information, including links to additional sources.
You can search by state to find companies and contract opportunities close by. Buyers are encouraged to post premium offerings, which can range from 40 to 50 cents per bushel for high oleic to more than $1 for non-GMO food-grade soybeans. Some organic soybean contracts are worth $16 or more per bushel.
"Growing specialty soybeans takes a lot of work, and it's not for everyone," Albertson adds. "Some contracts are easier to get than others."
Joe Rosenberg, St. Ansgar, Iowa, says he got tired of losing money or just squeaking by raising conventional soybeans. The 46-year-old farmer searched the Internet for ways to boost his bottom line and found multiple buyers within a reasonable trucking distance willing to pay a premium for non-GMO food-grade soybeans.
Rosenberg signed a contract prior to this year's growing season with Stonebridge, a soybean marketing company from Cedar Falls, Iowa, to grow 1,200 acres of non-GMO soybeans. He'll earn $1.50 per bushel above the Chicago Board of Trade price, which he locked in at $9.90 per bushel.
When local basis -- the difference between futures and cash prices -- is figured in, Rosenberg says he's actually making more than the additional premium. Not long ago, he says, the basis at a local elevator was $1 under.
"I had to do something different; breaking even and just surviving wasn't working anymore," Rosenberg says. "I went non-GMO and back in the black."
Non-GMO soybean yields ranged from mid-50 to low-60 bushels per acre in 2018, Rosenberg's first year raising them. He says seed is cheaper but weed control is tougher yet manageable since the soybean plants aren't engineered to tolerate herbicides.
Tim Daley, Stonebridge production agronomist, says demand is strong for non-GMO food-grade soy here and abroad. Most of it is made into tofu or tempeh, or used as an ingredient in food such as Clif Bars.
"The future looks fairly good to maintain premiums at a good level," Daley says, noting different varieties have different premium offerings.
Stonebridge contracts are buyer's call, meaning farmers deliver soybeans to processors when needed. The company contracts thousands of acres across the country -- 60% for domestic use and 40% for export, primarily to Japan.
"I already have farmers calling me up about contracts for 2020," Daley says. "With the downturn in the grain markets, farmers are looking for any options they can to capitalize on better prices. Every penny counts."
The United Soybean Board (USB) first invested checkoff dollars to develop and commercialize high oleic soybeans more than a decade ago.
Soybean farmers lost food-oil demand after mandatory trans-fat labeling. High oleic soybeans provide food companies and restaurants an oil alternative with 0 grams of trans fat per serving and 20% less saturated fat than commodity soybean oil, as well as longer shelf and fryer life.
Many processors across the country, including ADM, Bunge and Perdue AgriBusiness, offer high oleic soybean premiums.
All of Linda Burrier's 304 acres of soybeans are high oleic. The USB board member, from Union Bridge, Maryland, receives a 40-cent-per-bushel premium from Perdue for soybeans delivered after harvest to the end of the year and 50 cents in January and thereafter.
"This is a good option for farmers to earn extra money without changing their management besides segregating beans after harvest," Burrier says.
High oleic yields are as good or better than conventional soybeans, she says. Domestic and international demand is also growing, Burrier believes. She recently participated in a trade mission to Taiwan. Buyers expressed interest in importing the beans and building a crush plant.
Gary Cordier, senior vice president of global grain and international commodities for Perdue, thinks high oleic premiums are here to stay. The company made additional investments at its Marietta, Pennsylvania, crush plant to better receive and process soybeans this year, including high oleic. Perdue also upgraded its Salisbury, Maryland, facility that's been crushing high oleic soybeans for more than five years.
"It represents an opportunity for a value-added product for our refinery and farmer customers," Cordier says. "The premium should stand the test of time."
Garnering a seed soybean contract is one of the tougher premium gigs to get, industry officials say. It also requires meticulous record-keeping, tedious cleanout of equipment and bins to prevent commingling of varieties and enough storage for the same reason.
Gaesser Farms typically raises eight to 10 soybean seed varieties each year. "There's more management and definitely more cleanout involved with seed beans. But, it's more dollars, too," Gaesser says.
If farmers are interested in growing seed beans, he recommends they establish a good relationship with seed companies and demonstrate they can be a high-quality, reliable producer. He also says farmers should sign a contract to guarantee compensation.
"There's always extra management to get a premium, which doesn't come for free," Gaesser says.
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