A Farmer’s Guide to Soy’s Top Customers

“Too many people support animal ag as long as it’s not in their backyard,” says Roxboro, N.C. soybean farmer and hog producer Jimmy Thomas (pictured).

Contrary to popular belief, your local elevator is not your most important customer. Mack McCary would know. He became well acquainted with his local elevator before he retired as the production manager at the Townsends Inc. elevator and processing plant in Millsboro, Del., after 25 years of service. He’s quite clear on the number of soybeans he’s seen that elevator consume. “Not one soybean did it ever eat,” says McCary with a chuckle.

Having returned to the farm full time and raising broiler chickens exclusively, McCary returned to being one of U.S. soybean farmers’ real customers: poultry, livestock and fish farmers around the world.

These animal farmers use nearly all of the supply of soybean meal – both here in the United States and around the world – in feed. In fact, animals consume the meal from 98 percent of your soybeans.

However, soybean checkoff research shows U.S. soybean farmers don’t fully realize how much poultry, livestock and fish farmers impact their on-farm profitability.

According to the checkoff survey conducted earlier this year, many U.S. soybean farmers still think of their local elevator as their end customer.

“It’s disappointing that more soybean farmers don’t know that poultry and livestock are their biggest end user,” says Dwain Ford, a soybean checkoff farmer-leader from Kinmundy, Ill., who also raised hogs up until a few years ago. “Animal agriculture represents the best avenue for selling our soybeans and makes a large economic impact on our communities as well.”

The world’s appetite for meat, milk and eggs continues to increase at a staggering rate. To meet this demand, animal production is thriving in other countries, offering U.S. soybean farmers additional opportunities in export markets. Meanwhile, due to several issues, domestic animal farmers are just starting to recover from challenges encountered the past few years.

Welcome Your Neighbor

Jimmy Thomas, pictured above, is his own best customer. The Roxboro, N.C., farmer runs a 400-sow farrow-to-finish pork farm in addition to growing 2,000 acres of soybeans, corn and wheat.

In North Carolina, he has limited access to other feed ingredients, increasing his reliance on soybean meal as a protein source.

“The consistent profitability we used to have in the pork industry is really gone,” Thomas says. “Pork prices are at record levels, but since we’re paying such high feed prices, we’re still not really showing a profit.”

One of the last independent pork farmers in North Carolina, Thomas also currently serves as president of the North Carolina Soybean Producers Association. As a hog farmer who also grows soybeans, Thomas knows how important it is for soybean farmers to support animal farmers. “Too many people support animal ag as long as it’s not in their backyard,” Thomas says. “Everybody wants to sell their soybeans, but they don’t want anybody building a hog operation nearby. These facilities have got to be located somewhere.”

Comfort Zones

It’s almost as if Lloyd and Daphne Holterman were born to raise animals. The husband-and-wife team from Watertown, Wis., has milked cows for 30 years, growing a herd that stands at about 800 cows today. Daphne Holterman (pictured) says that when they take care of their herd, the animals respond.

“I was talking to a fourth-grade class recently,” she says, “and they asked me, ‘Do your cows go outside?’ And I said, ‘No, we can do a better job of taking care of them inside by enhancing Mother Nature’s environment.’ People often don’t realize that everything we do is based on the question, is it better for our cows?”

“Animal welfare is a big issue we’re facing,” she adds. “When we care for our animals every day, they will take care of us over the long term.”

While the Holtermans have gotten good at maximizing cow comfort, the current price of many feed sources makes them uncomfortable.

“Don’t get me wrong, everybody loves soybean meal,” Lloyd Holterman says. “But when it gets over $350 a ton, which is about where it’s been, it’s too expensive. I don’t know how we’re going to pass all these increased costs onto consumers. Somebody’s going to have a hard time – it’s either going to be them or us.”

Competitive Imbalance

Butch Wilson has seen what can happen when soybean farmers and animal farmers work together. Wilson’s farm serves as the site of a joint venture with Auburn University and the soybean checkoff to demonstrate alternative methods that make indoor fish production more efficient.

Wilson’s Marion Junction, Ala., farm produces about 3 million pounds of catfish and 350,000 pounds of tilapia every year.

“Nationally,” Wilson says, “catfish production has shrunk 40 percent over the last five years, and U.S. soybean farmers saw some sectors of domestic consumption of soybean meal decrease as a result.”

According to Wilson, who says his feed costs have doubled over the last three years, the project has demonstrated how to shave between 30 and 35 percent off the cost of aquaculture production. But U.S. fish farmers still operate at a disadvantage.

“The wholesale price of catfish right now might be $4 a pound, but our competition from Asia is $3 a pound,” Wilson says. “We need to get that cost of production to where we’re competing on a level playing field.”

Agricultural Allies

Geography presents Delaware’s McCary with constant reminders of the issues he and his fellow animal farmers face.

He farms in Frankford, Del., on the Delmarva Peninsula, which includes Delaware and the eastern shores of Maryland and Virginia. Delmarva is known for its broiler production.

A short drive from Washington, D.C.; the Chesapeake Bay; and the Atlantic Ocean, McCary’s farm lies in an environmentally sensitive area of the mid-Atlantic region due to its high population and attractions near the beach. Delmarva also draws a steady stream of retirees and vacationers, which helps drive up land prices.

“Whether you’re in the Midwest, here on Delmarva or anywhere else,” McCary says, “these issues are going to come to us all before it’s over with. They’re going to choke us all to death if we’re not careful.

“We as farmers need to be more proactive on the issues and get out there and push our agenda like people push their agenda on us.”

McCary places flocks of 250,000 chickens in his 12 poultry houses five times a year. He’s part of a region whose farmers will raise 600 million broilers and purchase about $830 million in animal feed, including soybean meal, this year.

He’s also part of a sector of U.S. agriculture that faces increasing feed costs, environmental pressure, trade barriers, groups that claim farmers mistreat animals and many more threats to their freedom to operate. All while they’re being called on to meet unprecedented global demand for food. With those issues, U.S. soybean farmers have opportunities to support their best customers.

“When you’ve got only 1.5 percent of the population involved in producing agricultural commodities, we can’t be divided,” Thomas says. “It’s a very small group of people who still live on the farm. When we don’t stick together, it just opens cracks for other groups to come in and split us even further apart.”

Tags: soybean meal for animal feed