Average Protein and Oil 2010

(@ 13 percent moisture)

Soybeans with different protein and oil levels have different oil + meal product values when processed. The percent oil in soybeans is directly related to the pounds of oil produced from a bushel of soybeans. Percent oil is also directly related to the pounds of meal produced per bushel. Percent crude protein in soybeans is directly related to the level of crude protein in the meal that is produced. If commodity soybean meal does not contain a defined minimum level of protein, it is subject to discounts. The extent to which these characteristics vary within the U.S. crop has implications for its most efficient use and associated economic value.

A commodity market is based on the concept that product characteristics are uniform. In a commodity market, compositional variation is either ignored or addressed by establishing thresholds which trigger penalties when they are not met. When soybean composition varies, how the market chooses to describe soybean characteristics for purposes of establishing economic value becomes an issue. When the composition of soybeans at the time of delivery is unknown, the safest approach is to assume the worst and price accordingly. Under this scenario, the attributed value of a crop is established by the lower end of its quality range.

The following information is based on the NIR analysis of 1028 soybean samples provided by USDA-NASS from their Objective Yield Survey for Crop Year 2010. The level of variation in protein and oil observed has significant implications for the applied value of our domestic crop. This aspect is further explored on the web page titled “Estimate of Gross Processor Margin: Crop Year 2010” which uses values for protein and oil content to estimate product value based on a stated set of prices for meal, oil, and hulls and compares it to a given price for soybeans.

One concern with focusing on composition is the potential impact on yield. The soybeans from the USDA-NASS OY survey are obtained from farmer production fields, with the farmer having chosen the variety which was grown. Therefore, since farmers typically choose varieties that offer them the greatest yield potential, these samples should represent varieties that a producer considered to be yield competitive enough to justify their planting.

Compositional variation and the economic value which can be associated with these differences represent an opportunity for the soybean value chain. The ability of growers to access this type of information and incorporate it into their production and marketing decisions will determine the extent to which they are able to contribute to and gain from in this value.

Summary of Results:

Note: For a table with individual district values used to calculate the above table and data map presented below, click APO_Table_2010

Average protein and oil values for 69 multi-county districts are presented in the following map. Each district is identified by a numeric code which is a combination of the respective state and district codes. As an example, district 1710 is District 10 in Illinois. The same code is used in the table of individual district values which can be accessed via the “APO Table 2010” link above.

Each district’s average protein level is represented by its background color using the following color gradient.

37.5% Crude Protein

32% Crude Protein

Each districts average oil level is represented by a column which represents the following range in oil level:

19% Oil

16.5% Oil

An inverse relationship, that is as one increases in level the other goes down, between protein and oil level is typically cited. This relationship is somewhat evident in the above data map where column size in the higher protein districts (darker green) tends to be but is not always lower than those in the light green to yellow districts. This relationship is further explored by the following chart which presents the relationship between protein and oil based on individual sample results.

While a negative trend between protein level and oil level is observed, the relationship is inconsistent. A statistical measure of the extent to which two sets of values are related is R². The closer the value for R² is to the number 1, the stronger the relationship. The above R² of 0.21 indicates that the relationship between oil and protein for the above set of values is not very strong.

Differences in soybean composition represent potential opportunities for not only progressive value-chain segments, but the entire soy industry. By gaining an understanding of the reasons behind compositional differences, learning the extent to which they can be controlled and how beneficial changes can be achieved, the soy industry can work together to affect beneficial change.

Soybean producers have a critical role to play in this effort in that their production, handling and marketing decisions will ultimately enable this type of opportunity.  By affording soybean growers greater access to soybean composition information, they will be able to both contribute to the creation of value through their crop production decisions and better share in the value that they help to create.

 

Disclaimer:
All information provided on the U.S. Soy Measurements (USSM) Web pages is provided “as is” and is intended for illustrative purposes only. No warranty, expressed or implied, is provided regarding any information provided on USSM pages. All information is provided on the condition that users must make their own determinations regarding any use of this information and must assume all risk associated with any and all use.