For years, we’ve heard that U.S. soybean growers risk losing market share due to low bean protein and oil content. But now, a hungry world changes market dynamics.
“Things changed forever in 2006,” says Charles Hurburgh, director of the Iowa Grain Quality Initiative and Iowa State University ag engineer, describing price leaps that place overseas buyers’ focus on security of supply above bean protein levels.
“High bean prices say, ‘we want you to grow twice as much, and we will pay you much more for it.’ The game changer is China and India growing at double-digit rates with increasing demand for soybeans,” Hurburgh says.
Brazil is knocking at our door, says Stan Hanson, Garretson, S.D., and Soy Transportation Coalition director and South Dakota -Soybean Research and Promotion Council director. “We know that yield
will always be king for farmers, but we benefit the most by selecting high-yielding varieties with high protein and oil. Brazil’s favorable climate, high bean protein and oil levels, and its ability to increase acreage, means we have to make sure our protein and oil are as high as possible. In domestic markets, high protein levels make soybeans more competitive than DDGs and canola meal.”
Yet, soybeans with lower crude-protein content (typically from regions farther from the equator) actually have better amino-acid profiles, research shows (see sidebar), Hurburgh says. This makes U.S. lower-protein/better amino-acid balance beans a better value because they require fewer synthetic amino acids to balance a meal ration, he says.
U.S. beans have a better and more uniform amino-acid profile than South American beans, says Miguel Escobar, U.S. Soybean Export Council (USSEC) director of international business development. USSEC studies confirming the superior nutrient profile of U.S. soybeans span decades. It gathers 2,200 soybean tests nationwide annually as part of its Soybean Quality survey. (To read these studies, see http://bit.ly/REwBuk and http://bit.ly/SUjUMs.) These detailed, georeferenced findings on U.S. soybean protein, oil, seed size and foreign matter are presented annually to major soybean buyers in China, Taiwan, Japan and South Korea by Seth Naeve, Extension soybean agronomist and Jim Orf, soybean breeder, University of Minnesota.
The 25 years of historical data helps them preview the year’s crop before buying. “Supply is the biggest issue for them,” Naeve says.
Protein and oil are “very important to Asian buyers, but farmers are paid for yield,” adds Orf.
“We need to look at how we market grain quality,” Hurburgh adds. “Growers need to market amino-acid balance and remove restrictions on total protein. It takes more plant energy in biosynthesis to make protein, which, in general, will make it harder to increase yield.”
USSEC CEO Jim Sutter adds, “The world demand for protein is growing. And we will continue to need all the production that Mother Nature and U.S. farmers can generate. It’s important we remind buyers that our expanded production areas allow us to sell them a sustainable, economic source of protein; and that we take time to educate our customers as to the full story about soybean quality.”
USSEC emphasizes to potential soybean buyers that “amino acid profile, amino acid digestibility, metabolizable energy and uniformity among batches should be the focus of value in the buying and selling of soybean meal,” says a recent USSEC white paper. “U.S. soybean meal will reduce feed cost because it has higher concentration of nutrients per kilogram of meal.
“The superior nutrient profile for U.S. soybean meal…reduces ration costs and improves animal performance when compared to soybean meals of other origins,” it says, citing a global eight-year series of 29 swine and poultry feeding studies.
We need to “do everything we can to stay competitive; we have a lot of challenges here,” adds Naeve. “I recommend that producers first choose varieties only from among the very highest yielding varieties available. Then disregard those soybean lines with below-average quality (generally very low protein levels).
“If we can convince farmers to quit buying the [low protein] ‘dogs’ we can make tremendous headway at increasing the overall protein level of the U.S. crop.”
This soybean-content trend is part of a larger picture, too, Hurburgh says. “Agriculture’s not used to being in an economic driver’s seat. This change in ag’s higher profile and our need to operate professionally as a business will percolate in ways that we can’t know right now.”
To compound the issue of what buyers are most interested in, U.S. soybean acres are shifting farther North and West, regions associated with lower protein and oil. “All three new U.S. export terminals are on the West Coast,” Hurburgh says. “They’ll be fed by rail from the western and northern Corn Belt, and ship off the West Coast to Asia.” (See related article on this at http://bit.ly/PiA0Ye.)
Powerful protein profile
Soybeans with lower protein content actually have better amino-acid profiles and digestibility, according to University of Minnesota and Iowa State University (ISU) research. This makes them a better value because they require fewer synthetic amino acids to balance a meal ration, says Charles Hurburgh, director of the Iowa Grain Quality Initiative and ISU ag engineer. U.S. beans were found to have relatively higher levels of the five limiting amino acids (lysine, methionine, cysteine, tryptophan and threonine).
“The Chinese, Japanese and Philippine trade teams know our beans are an amino-acid bargain,” Hurburgh says. “Scientific evidence is floating to the top.
“The soybean industry is part of a supply chain, and what’s best for the end user at a scientific level is the new focus,” Hurburgh says. He’s a veteran of the soybean-protein issue, having been part of the first soybean-quality initiative when Asian buyers initially requested higher-protein beans in 1985.
The soybean industry’s been trying to engineer a better bean ever since.
“I am glad to see the amino-acid profile research mentioned in your article, as a majority of the northern-grown soybeans, especially North and South Dakota, are exported,” adds former USB director Stan Hanson, a soybean farmer from Garretson, S.D.
Jim Orf, a University of Minnesota veteran of annual soybean quality missions to Asia to educate buyers there on U.S. beans’ quality, adds, “As the Chinese livestock producers become more sophisticated and the technology to measure meal’s amino acid content becomes widely available, there will likely be more attention paid to the essential amino acid content of the meal,” says the University of Minnesota soybean breeder. He meets annually with Asian soybean buyers to report detailed findings on U.S. soybean protein, oil, seed size and foreign matter. The data comes from about 2,200 tests nationwide in the USSEC’s Soybean Quality survey. “This is true for China and is only beginning to be used in the U.S.,” Orf says.
Yet, concern for beans’ protein and oil content remain. In the domestic Upper Midwest market, “it’s still very difficult for us to get high enough protein beans to make 48% meal,” says TomKersting, commercial managerSouth Dakota Soybean Processors, Volga, S.D.
What is EPV?
Estimated process value (EPV) assigns values to beans’ component parts. In the example here, there’s a 93¢/bu. difference in EPV between varieties A and B it his example.
The scatter chart illustrates the huge variability in oil and protein content among varieties grown in one location in one year. Variety A exceeds the industry targets of 35% protein and 19% oil, while variety B does not. Minnesota growers, in this example, have a 23¢ basis difference (from Illinois), almost half of which is a quality differential.
Yield is the accumulation of protein and oil, explains University of Minnesota Soybean Extension Agronomist Seth Naeve. “As protein increases by 2%, we generally decrease oil by about 1%. Some years with good growing conditions and lots of sun, beans put on more oil late in the season and we see 60-70-bu. yields. Other environments are more limiting, so it’s not an easy relationship to explain. That’s why you see the large variation in varieties’ protein and oil content,” he says.
“There are some varieties out there that have protein, oil, yield and disease resistance, but it takes some digging to find them,” says Shawn Conley, Wisconsin Extension soybean agronomist.
He surveyed growers about how they chose their varieties: “They buy yield first, then weed-control traits; then disease resistance. Grain-quality traits were way down the list. The perception among growers is they don’t get paid at the local elevator for anything but yield. But I try to get across that our overseas customers weigh grain quality, so growers should consider that.”