Soybean prices are in the tank. Or are they?
Some growers have found food-grade markets that command three times the commodity soybean price. The challenge is that producing soybeans for organic buyers requires more time and the beans can yield less per acre. But growers say less input cost and escalating organic demand make it profitable.
"Going organic is worth it. You have to work hard to achieve the kind of quality organic demands, but it is a lucrative market," says Ed Reznicek, Goff, KS.
Reznicek is a grower and part-time general manager of Kansas Organic Producers (KOP), a 65-member cooperative.
"The organic soybean market has been growing 20% annually for the last four or five years," he says. "The price fluctuates, but we receive $14-20 per clean bushel of soybeans."
Getting to double-digit prices, however, takes time, experience and even a little luck on the production end, says Bart Hall, Bluestem Associates, Lawrence, KS. Hall's Organic Agriculture Transition Service (OATS) is being used by the Kansas Rural Center as part of an organic education project funded by the Kansas Soybean Commission.
Hall is a conventional soil scientist by trade, but has been involved with organic certification for nearly 20 years. He says 80% of organic production is simply about sound agronomics.
"Having access to suitable varieties is a challenge," he says. "Organic growers can have disappointing yields due to weed pressure and poor fertility management because they have a limited toolbox for their system. The requirements of certification eliminate their ability to rely on most conventional inputs.
"But I have seen organic growers get 50-65 bu/acre through proper rotation and earn up to $400 more per acre," Hall says. "A healthy, diverse, natural system can be just as good as a conventional one once you get away from chemical inputs."
Ed Mader agrees. He's an organic soybean grower from Garnett, KS, and also a second-term Kansas soybean commissioner.
"The myth is that you take a yield cut with organic, but I don't see that," says Mader. "My organic varieties did better than some of the conventionals last year."
Organic producers are looking to Kansas State University (KSU) researchers to help screen food-grade soybean varieties for better yields.
"We are raising food-grade varieties in a conventional system, some of which are experimental and proprietary and some of which were provided by organic growers, to see what opportunities exist," explains Bill Schapaugh, KSU soybean breeder. "We don't have the results in yet, but we could see seed available in a couple of years to fill a number of niches."
Hall and KOP members observed varieties in the KSU trials last year.
"I am pretty excited about what we saw," says Reznicek. "The research shows some promise for tofu and natto varieties. They have good agronomics, and the protein and processing characteristics appear good."
But what works in Kansas won't necessarily work elsewhere. As you move farther east, Hall says humidity and rotation problems, such as those associated with white mold and corn rootworm, become issues.
"They aren't insurmountable, but they are trickier to handle," he says.
"We have a mix of row, cereal and forage crops that makes organic production a good fit in Kansas," Reznicek adds. "Crop rotation minimizes our weed problems. I'd recommend any grower take a look at his production system options first to decide if organic will work for him."
Organic production is not going to put conventional production out of business, nor should it, Hall says. "But, eventually, good growers may adopt more organic techniques as they become more selective about inputs."
In fact, consumer demand may influence production decisions.
"The organic market is strong, although we did see some weakness in Asia in 1998," says Reznicek. "But with the GMO (genetically modified organism) issue so big overseas now, we're beginning to see Asian interest pick up again. Non-GMO beans have become a value-added market."
To capitalize on that demand, Reznicek says KOP members are on the phone nearly every day servicing current customers and looking at new opportunities both here and abroad.
"The U.S. economy is prosperous," adds Mader. "You can only own so many cars, so consumers figure, 'Why not spend a little more on healthy, organic foods?' "
Garrison, IA, soybean grower Marlyn Jorgensen is aware of that trend. In 1997, he, Dan Van Steenhuyse and Hommer Showman created Iowa Soy Specialties, a kosher, organic certified, producer-run, limited liability company. They market clear-hilum, non-GMO beans, a soy flour, and together with Triple F, Inc., a textured soy protein.
"We wanted to keep more of the profits with growers," says Jorgensen. "Right now we appeal to health and natural foods customers. Supermarkets are a little slower to come around. But such niche soy markets now in the U.S. and overseas could become bigger markets down the road. With interest in non-GMOs and in health foods, we think growers are well-positioned to market value-added soy products."