Summer 2011

Please scroll down to see all Global Opportunities stories:

USB GO Program Creates New Vision, 2012 Program

The United Soybean Board’s (USB) Global Opportunities (GO) program has a new, formal vision for its work and created $3.2 million worth of U.S. soy market-building tactics to be carried out in 2012.

USB’s GO Committee, chaired by the organization’s vice-chair and made up mostly of U.S. soybean farmer vice chairs of its five primary program areas, met in mid-July and adopted a formal vision for its soybean-checkoff-funded work. The GO program vision statement states the program exists “to discover and communicate global opportunities for U.S. soy by analyzing current and potential events.”

“Global means what currently is happening or may happen here in the United States or abroad,” says Vanessa Kummer, USB vice chair and GO Committee chair. “I see the adoption of this new vision as a confirmation that our checkoff will anticipate and identify opportunities and challenges that impact U.S. soybean farmers rather than simply responding when events affecting us occur.”

Kummer, who farms near Colfax, N.D., led the committee’s work to establish the vision and determine what the USB GO program plans to accomplish in 2012. Some of the GO checkoff-funded projects will include:

• Studies to determine what options may exist for U.S. soybean farmers as Congress prepares to reauthorize new multi-year farm legislation known as the “farm bill.” Past focus areas have included federal crop insurance and Average Crop Revenue Election (ACRE) program.
• An extensive study is underway to determine transportation bottlenecks facing U.S. soybean farmers and the rest of the U.S. soy industry.
• An examination of Argentina’s soy differential export taxes, which the U.S. oilseed processing industry believes violates World Trade Organization rules. Some estimates show Argentina’s tax system cost the U.S. soybean processing industry $400 million annually.
• Additional work to examine the feasibility of shipping U.S. soy in 20 or 40 ft. containers to Europe and other parts of the world off U.S. East Coast ports.
• A partnership with the USB Communications program to examine challenges and opportunities that exist to maintain the freedom to operate for U.S. soybean farmers.

“Don’t try to predict the future, forecast it,” says futurist Bob Treadway, who helped the GO Committee create its new vision. For example, Treadway notes that while China has received most of the attention for its economic growth, other nations such as Indonesia, the Philippines and Vietnam have experienced similar growth.

Investors Take Notice of Farmland

With growing global population and food demand in news headlines, investors have started to take notice of resources that provide that food, particularly farmland. Especially in this time of economic uncertainty, the relative stability that farmland offers investors is even more attractive. As a result, some of them have been snapping up arable land in places such as Africa, South America, Ukraine and Russia. Agriculture and land have attracted a lot of investor attention in the United States, too.

“The amount of funding coming from outside the U.S. ag industry could have a major impact and actually change agriculture in a way that we have not seen in the United States or globally,” explains Vanessa Kummer, vice chair of the United Soybean Board (USB) and soybean farmer from Colfax, N.D. “Right now our role is to monitor this closely to find out what effect this could have for U.S. soybean farmers.”

Kummer, who also serves as chair of USB’s Global Opportunities (GO) Committee, attended a conference in New York City that examined the growing appetite for investing in agriculture. The Global Ag Investing Conference gave hedge-fund, pension-fund and other investors the chance to learn about agriculture and various farming regions of the world.

“This is a fairly new investment area for some, and there was a large amount of money represented by the group in the room,” adds Kummer. “These investors really have the interest and the ability to affect the agriculture sector.”

USB’s GO program intends to stay informed on this issue to determine how it might affect U.S. soybean farmers, as well as the global soy industry. For example, Kummer adds that questions about infrastructure, input prices and management of that investor-owned farmland still remain to be answered.

Looking at Future Options for U.S. Soybean Farmers

“Planning is bringing the future into the present so that you can do something about it now” — Alan Lakein, time-management expert and author. This stance often proves to be true when it comes to multi-year federal farm programs.

The current 2008 farm bill might result in changes next year. U.S. soybean farmers who serve on the USB Global Opportunities Committee have already initiated two projects designed to examine options and provide an economic analysis of potential changes to U.S. soybean farmers and the U.S. soy industry.

First, the USB GO program plans to conduct a survey among U.S. soybean farmers on why some purchase federal crop insurance as an affordable risk-management tool and others don’t see it as a viable option. The GO program plans to see survey results by September 30, 2011.

Potential changes of the multi-year federal farm program include changes to direct payments to farmers, disaster relief, crop insurance and conservation programs and USB soybean farmers want to be prepared.

“The soybean checkoff cannot advocate for one position or another when it comes to regulatory or legislative policy,” says Dwain Ford, USB GO Committee member and Kinmundy, Ill., soybean farmer. “We can, however, examine what options exist for these programs that can have a big impact on us and our industry.”

The GO Committee selected the Food & Agricultural Policy Institute at the University of Missouri and Texas A&M University to conduct an examination of federal farm program options for U.S. soybean farmers. The research will try to provide data and analysis to help ensure that components of the farm bill do not hinder U.S. soy farmers’ competitiveness and the ability to grow their business. This study should be completed later this fall and will be available on the Global Opportunities Web page at www.unitedsoybean.org/topics/global-opportunities.

Sustainable Agriculture Across the Seas

The difference between good prices and bad prices can be small shifts in soybean exports. For this reason, the United Soybean Board (USB) participates in significant discussions and forums to ensure that access to all international markets remains open.

The International Food and Agribusiness Management Association (IFAMA) met this summer in Germany for its 21st annual symposium, The Road to 2050: Sustainability as a Business Opportunity. Participants discussed challenges of feeding a growing population while protecting natural resources. Roy Bardole, a soybean farmer from Rippey, Iowa, who also serves as vice chair of USB’s Global Opportunities program, attended the conference to help educate others on how biotech events can play an important role in meeting that challenge.

“It’s important to provide education about biotech varieties to increase awareness of their critical benefits,” says Bardole, who is also vice chair of the soybean checkoff’s International Marketing program. “These varieties allow farmers like myself to feed the world while protecting the land. And, in the near future, these products will have consumer benefits too, like heart-healthy oils and increased omega-3 fatty acids.”

Participants also discussed how to define sustainability. One prevalent definition, established in the 1990 U.S. farm bill, isn’t universally accepted, particularly in the European Union (EU). That U.S. definition reads this way:

Sustainable agriculture means an integrated system of plant and animal production practices having a site-specific application that will, over the long term, accomplish the following goals:

• satisfy human food and fiber needs
• enhance environmental quality and the natural resource base upon which the agricultural economy depends
• make the most efficient use of nonrenewable resources and on-farm resources and integrate, where appropriate, natural biological cycles and controls
• sustain the economic viability of farm operations
• enhance the quality of life for farmers and society as a whole.

A detailed USB Global Opportunities program paper, providing the thoroughly-footnoted research/studies proving that U.S. soybeans are produced in a sustainable manner, will be published in the official PROCEEDINGS journal from this Frankfurt IFAMA meeting.

Establishing a broad definition of sustainability is important, Bardole says, because that definition would form the basis of any sustainability-certification program that the EU may try to establish in the years ahead, potentially affecting U.S. soy exports.

Focus On Finding Transportation Improvements

Increasing investment in the U.S. transportation system remains a top priority of the soybean checkoff, and for that reason USB participates in the Soy Transportation Coalition (STC). Some USB farmer-leaders recently took part in the STC summer meeting in northern Illinois, which was aimed at not only planning the work of the coalition, but also getting an up-close look at a part of the transportation system that moves U.S. soybeans from the field ultimately to export markets around the world.

“STC focuses on finding where improvements need to be made in transporting our soybeans,” says Dale Profit, soybean farmer from Van Wert, Ohio, and USB representative to the coalition. “Tours like these help us see what actually happens to our soybeans after they leave the farm.”

STC farmer-leaders started in Channahon, Ill., 50 miles southwest of Chicago, with a look at the DeLong Company’s transloading facilities. There STC representatives watched as workers filled containers with soybeans bound for export markets. Directors also took a look at a second DeLong facility, in nearby Joliet, which deals with distillers dried grains. While still in Joliet, the group made a stop at the Union Pacific terminal to learn about loading and tracking technology. Lastly, STC directors visited a Canadian National Railway transloading facility not far away, in nearby Harvey.

The following day, STC directors convened to discuss current and upcoming projects. GianCarlo Morgera, senior vice president of the world’s second-largest container-shipping company and the guest speaker, told the group he’s concerned about the United States’ ability to handle the larger-sized ships that are increasingly common, such as so-called “Suezmax” vessels. Morgera, of the Mediterranean Shipping Company, said that some companies have started to consider using ports in the Dominican Republic and Jamaica as primary destinations, then reloading cargo onto smaller vessels for the trip to U.S. ports. Such a strategy could make U.S. exports more expensive to international buyers.

“STC has been closely following issues such as this one that will only intensify once the expansion of the Panama Canal is complete in 2014,” says Profit. “This could greatly affect our ability to efficiently move U.S. soybeans to some export markets.”

STC has a busy schedule for the remainder of 2011 with several studies wrapping up and others getting started: the rural infrastructure research project, a modification of the lock and dam study to consider total replacement or facelifts, and an assessment of the impact of a catastrophic loss of a lock and dam on an inland waterway in the United States.