“We grow soybeans, but our processors buy and sell protein and oil,” says United Soybean Board (USB) Chairman David Durham, a soybean farmer from Hardin, MO. “To protect and increase our markets, it’s time for us to change the way we think about soybeans. We have to place as much emphasis on protein and oil as we do yield.”
Durham communicated this message during a soybean checkoff press conference in Sioux Falls, SD. Through a new initiative that aims to improve U.S. soybean farmer competitiveness, USB and the soybean checkoff encourages U.S. soybean farmers to choose high-yielding varieties that also contain high levels of protein and oil. American Soybean Association farmer-leaders, researchers and industry representatives from AGP, South Dakota Soy Processors, Monsanto and Cargill also participated in the press conference, which was held prior to the annual Midwest Soybean Conference, occurring this weekend.
During the press conference, Durham and others explained that geographic shifts in soybean production in the U.S. during the last several years have led to a decline in the protein and oil levels of the U.S. soybean crop. The bulk of U.S. soybean production has shifted out of the southeast and into the Upper Midwest.
Unfortunately, soybeans in the Upper Midwest maturity groups tend to have lower protein and oil contents than those soybeans grown in the Southeast. In contrast, South America’s growing conditions favor higher maturities with high protein and oil contents without sacrificing yield.
“South America is projected to double its soybean acres in the next decade; making it virtually impossible for us to compete with them in terms of production,” explains Durham. “We need to grow what the world demands. Producing a higher quality product with higher levels of protein and oil is the one way we can compete with South America in the future.”
To understand market demands concerning protein and oil, Durham indicated that soybean farmers need to understand how a processor values soybeans. Through the soybean checkoff’s Select Yield & Quality initiative, a calculation called the estimated processed value (EPV) was used to determine this. The EPV is a calculation of the value of a bushel of soybeans based on the value of its component parts – meal, oil and hulls. Increasing the protein content of soybeans adds value to the meal component and increasing oil content adds value to the oil component.
“If the soybean meal produced by a processor does not meet the minimum percentage of protein to be considered High protein soybean meal, it will be discounted in the marketplace,” said Durham. “These discounts are passed on to the farmer who will receive lower prices for his soybeans.”
The soybean processing industry has also taken steps to address the issue of low protein in U.S. soybeans. For example, AGP and South Dakota Soy Processors have already implemented premium programs that reward growers for planting specific varieties that produce soybeans with higher levels of protein and oil. Other processors are also considering such programs. Monsanto, through their Processor Preferred program, has identified for farmers varieties that meet specific protein and oil requirements.
“We have the power to make our product more competitive,” says Durham. “I encourage all farmers to ask their seed dealers about soybean varieties with strong bushel per acre yield characteristics and high levels of protein and oil.”