U.S. soybean farmers are helping to meet growing global demand by planting food-grade soybeans for processors that send their beans to markets such as Asia where the beans are used in soy-based food products such as tofu and miso.
Soybean growers are expanding their soybean portfolios by taking advantage of the premiums being offered for planting enhanced-quality traits such as food-grade, Identity Preserved (IP) and non-GMO. With the growing demand for these enhanced-quality soybeans from overseas customers, premiums for these soybeans are most likely going to continue rising.
What these premiums also signify is the tremendous demand for these unique soybeans. Consumers are willing to pay a higher price for enhanced-quality soybeans, and soybean handlers are willing to pass that along to the farmers.
“The demand for these soybeans is exploding. Food-grade is the same way; everybody wants to buy organic,” said Kevin Glanz, a soybean farmer from Manchester, Iowa. “If you put a pencil to it, there is more profit in growing these types of specialty beans. This year, the premium for non-GMO beans was $3.40 a bushel. On 10,000 bushels, that’s $34,000 in extra profit.”
Trends indicate that demand for enhanced-quality soybeans is continually increasing, but production acreage is not meeting the demand, culminating in higher prices. Annually 60 million bushels of soybeans are exported at a premium for food-grade uses. Customers in Asia, the likely destination for many of these food-grade soybeans, are adamant about buying non-GMO varieties.
“The demand is significant,” said Bob Sinner, president of SB&B Foods. “The real issue is having enough supply to meet the demand for food manufacturers. At the end of the day, everyone has to eat. The economies of Southeast Asia are improving, and the first thing that happens when economies improve is they want to eat better.”
The number of non-GMO, food-grade and Identity Preserved varieties becoming available offer more profit opportunities for farmers. This year’s production acreage for low-linolenic soybeans, for instance, is estimated at between 2.5 and 3 million acres. Next year will see a high-oleic variety added to the list. Both of these examples are being sought by the food industry because they result in oil with no trans fat.
“With the economic incentive to grow non-GMOs and looking at the cost of conventional chemicals, the cost of growing non-GMOs is actually less,” said Ken Dalenberg, a soybean farmer from Mansfield, Ill. “We’ve had very good success with non-GMOs being very competitive with commodity beans.”
Infrastructure that is already established in the United States offers soybean farmers a competitive advantage from which to work in growing a diverse list of soybean varieties. U.S. facilities can offer storage and shipping space, as well as the record-keeping expertise to accommodate this diverse supply that must be kept segregated and traceable.
For a look at how the premiums for growing food-grade soybeans can improve their operation’s bottom line, farmers can visit www.soybeanpremiums.org.