Positioning Soybean Checkoff for Third Decade

Stop. No. GO. Yes!

What a year! I know weather challenged many of us in 2011 like never before. Fortunately, for my family and me, harvest took place this year in nearly record time in our corner of North Dakota. I heard the same from many of our fellow soybean farmers across the country as well. Good thing. Our country and world need our soy!

Indeed, statistics show demand for U.S. soybeans has increased 140 percent since the start of the national soybean checkoff program some 20 years ago. That’s greater than any other row crop produced in the United States. We can be proud of what our soybean checkoff has accomplished.

Still, U.S. soy research and promotion remain as important as they were when our checkoff began in 1991. I, along with several of my fellow farmers who volunteer their time to serve on the United Soybean Board (USB), contend that farmer-funded, farmer-driven research and promotion are perhaps more important now than ever.

USB’s Global Opportunities (GO) Committee consists of each one of our five program committee vice chairs along with two additional farmer-directors who oversee USB’s international marketing program. The USB GO program attempts to identify and anticipate opportunities and challenges for U.S. soybean farmers rather than only responding when events occur. You’ll see specific examples of this important checkoff-funded work here in GOing FORWARD, our annual summary, which helps fulfill our new GO program vision:

“To discover and communicate global opportunities for U.S. soy by analyzing current and potential events.”

We live and farm in an increasingly complex country and world. I compare USB’s GO program to GPS and auto-steer in some of my family’s machinery. The research conducted by the GO program can help all U.S. soybean farmers successfully navigate through these very complex issues that can have a big impact on our profitability.

So please devote some time to examine these important work summaries contained here. And be sure to visit the Global Opportunities page on the USB website for additional important information.

Vanessa Kummer
USB Vice Chair
GO Committee Chair

“Investment in Transportation Infrastructure” Named Priority Issue for USB

The USB Global Opportunities (GO) program plays an important part in monitoring issues related to getting your soybeans from your farm to their final destination. After all, increasing investment in the U.S. transportation system is one of USB’s top priority issues. This includes funding studies and providing information on challenges for the U.S. soybean industry related to transportation in partnership and cooperation with entities such as the Soy Transportation Coalition (STC). The STC consists of USB and 11 state soybean checkoff boards.

The expansion of the Panama Canal, anticipated to reach completion in 2014, could hold great opportunity for U.S. soybeans. USB’s GO program released a study in October detailing possible effects the widening of the canal could have on U.S. agriculture, specifically soybeans. Even though the U.S. soy industry could stand to benefit from this expansion, if U.S. transportation systems aren’t improved, U.S. soybean farmers could miss out on increased exports.

As foreign countries improve their infrastructure, parts of the U.S. transportation infrastructure seem to continue to crumble. One area of concern for the soybean industry remains the lock and dam system. The United States built many locks and dams during the Great Depression, and they have received little attention since then. The U.S. river transport system provides a competitive advantage in moving U.S. soybeans across the globe. If this mode of transportation isn’t maintained, U.S. soybean farmers could be the ones to pay the price.

Tying all of these and other issues together will be a comprehensive farm-to-market study that has been funded by USB. The organization expects to release this study in winter 2012. It is a follow-up to one of the industry-wide 2010 CONNECTIONS meeting areas of focus. These results should provide a look at how soybeans move through the United States to their final destinations, showing costs and opportunities for improvement along the way.

USB GO Activities and Accomplishments

Opportunities Exist to Ship from U.S. East Coast Ports

As a result of the USB Global Opportunities (GO) program’s examination of the prospects of utilizing shipping containers otherwise returned empty to their countries of origin, the potential exists to carry U.S. soybeans to new markets, especially in the European Union, Middle East and North Africa.

For this to occur, three sections of the U.S. soy value chain must be brought together: the carriers, U.S. soybean-meal exporters and European Union processors that buy U.S. soy.

Analysis shows that there are multiple financial and quality benefits for these industry players to ship soybean meal in containers, a practice currently in effect from U.S. West Coast ports but not from those on the East Coast. As a result of this checkoff-funded analysis, carriers now know more about the potential business this could create and may be willing to negotiate freight rates and create capacity. The USB GO-funded analysis shows preferred U.S. ports for these container shipments include Charleston, S.C.; New York; Norfolk, Va.; and Savannah, Ga.

 

 

Ghana Increasingly Important to U.S. Soy as Gateway to Africa

With a stable government and a population of 23 million, Ghana represents a potential gateway to other western African nations for U.S. soybeans. GO Chair and USB Vice Chair Vanessa Kummer and USB Past Chairman Phil Bradshaw traveled to Ghana and met with representatives of the local soy industry.

The market-analysis mission included a visit to a newly constructed aquafeed mill and a fish farm located on one of the world’s largest lakes, Lake Volta. The team also toured Ghana Nuts, a soybean processor looking to import 8,000 metric tons, or approximately 293,000 bushels of soybeans per quarter, and Akate Farms, Ghana’s largest broiler/hen producer. Kummer and Bradshaw concluded their tour of Ghana with a meeting with Ghana government officials, including the Ministry of Food and Agriculture Director.

 

GO Program Monitors Investors’ Interest in Farmland

USB farmer-directors who serve on USB’s Global Opportunities (GO) program have found investors to be very interested in pouring some of their money into U.S. farmland. USB GO Chair Vanessa Kummer, a North Dakota soybean farmer, found evidence of this interest when she traveled on a trade mission to countries that surround the Black Sea. Kummer and other USB directors who attended a Global Ag Investing Conference in New York City also learned of investors snatching up farmland in some countries in Africa, South America, Russia and Ukraine.

Investment such as this brings up many questions as to how an influx of money could affect the management of the land, infrastructure funding and input prices for the U.S. and global agricultural sector. USB’s GO program began monitoring the potential change this increased investment and interest could cause for U.S. soybean farmers and the rest of the U.S. soy industry.

Black Sea Region Could Hold Potential for U.S. Soy

Increased investment in agriculture in Russia, specifically in the poultry and livestock sector, could prove to be an opportunity for U.S. soybean meal exports. The increased number of poultry and livestock operations there has put pressure on Russia to import more animal feed because local soybean production has been unable to keep pace with demand. Neighboring Ukraine has also seen tremendous growth in the animal ag sector but, unlike Russia, has been able to provide ample soybean meal. In fact, checkoff-funded research has noted the possibility of Ukraine, once known as “the breadbasket” of the former Soviet Union, becoming a competitor of U.S. soy.

A recently released study, funded by USB’s Global Opportunities (GO) program, highlights the potential for increasing U.S. soybean meal exports to Russia and Ukraine, with Russia remaining the most attractive possibility. Checkoff-funded marketing and education efforts about the benefits of using high-quality U.S. soybean meal could help U.S. soybean farmers capitalize on this growth opportunity in both Russia and Ukraine.

Keeping Markets Open Requires Continuous Efforts

In late 2010, soy users in Turkey wondered if they’d have access to U.S. soy. The Turkish government had enacted a very restrictive law governing crops improved through the use of biotechnology that, for a time, halted U.S. soy exports to Turkey. USB’s Global Opportunities (GO) program has partnered with the organization’s Biotechnology Initiative along with the U.S. Department of Agriculture’s Foreign Agricultural Service (USDA-FAS) staff in Ankara, the country’s capital city, and Turkey’s animal feed industry to restore U.S. soy exports to the country.

In 2011, USB’s GO program funded such activities as a round-table discussion on biotech with Turkish decision makers, conducted an analysis that demonstrated the impact of the Turkish law if it restricted crops such as biotech soy and funded the translation of fact-based information about biotechnology for distribution in Turkey. The efforts helped restore the market for U.S. soy in Turkey. The government eventually allowed soy users to once again have access to U.S. soybeans and soy products enhanced through biotechnology, though USDA-FAS figures show exports of whole U.S. soybeans to Turkey dropped in 2011 to nearly a quarter of what they had been in 2010. The exercise demonstrates why the soybean checkoff invests in education efforts for decision makers and consumers with facts about biotechnology.

Minimizing Risk for U.S. Soybean Farmers

The USB Global Opportunities (GO) program conducted a survey among U.S. soybean farmers on why some purchase federal crop insurance as an affordable risk-management tool and why others don’t see it as a viable option. This survey has discovered that the use of risk-management tools varies greatly by region. In 2011, half of all soybean farmers surveyed purchased a federal buy-up policy on their soybeans, and only one in five purchased only federal catastrophic crop insurance coverage.

The GO Committee selected the Food & Agricultural Policy Research Institute at the University of Missouri and Texas A&M University to conduct an examination of what federal farm program options exist for U.S. soybean farmers. The study analyzed how three different scenarios might impact U.S. soybean farmers. The research will try to provide data and analysis to monitor components of a new farm bill that have the potential to affect U.S. soy farmers’ competitiveness and ability to grow their business.