Premiums of $1.25/bu. are making some waves in soybean country. Last November, Asoyia, a farmer- and employee-owned company in Iowa City, IA, announced that premiums for non-genetically modified (GM), ultralow-linolenic Asoyia soybeans will start at $1.25/bu. with potentially an additional $.40/bu. subject to soybean market volatility. Farmers also can receive a $.20/bu. signing bonus.
Growers who produce Asoyia ultralow-linolenic soybeans, Monsanto's Vistive low-linolenic varieties or Pioneer's low-linolenic soybeans (for Treus soy oil) are fetching premiums from soybean oil processors seeking to capitalize on the rapidly rising demand for heart-healthy oil.
Conventional soybean varieties typically contain 8% linolenic acid. Asoyia's soybeans contain 1% linolenic acid, and Vistive and Pioneer low-linolenic varieties contain less than 3% linolenic acid.
These low-linolenic acid levels make soybean oil more stable so that it needs little to no hydrogenation. Trans fatty acids are formed when vegetable oils undergo hydrogenation. Research suggests that trans fats raise LDL cholesterol levels, causing the arteries to become more rigid and clogged, and increasing the risk of heart disease. This prompted the FDA to adopt trans fat labeling rules. Moreover, several states and cities are enacting legislation that will restrict or ban the use of trans fats.
Todd Niehaus farms more than 1,000 acres near Martelle, IA, and planted 375 acres to Asoyia (Group III) soybeans for each of the last four years. The eastern Iowa farmer chose to grow the ultralow-linolenic soybeans for the extra revenue they would bring. Between 2004 and today, premiums for Asoyia soybeans have jumped from $.55 to $1.25/bu. “We've been ratcheting up premiums while ensuring we have a sustainable product,” says Brett Maxwell, vice president of operations, Asoyia.
To date, Asoyia's ultralow-linolenic soybeans have been non-GM varieties. However, the company is testing ultralow-linolenic Roundup Ready versions and is continuing to improve the disease resistance package and overall yield. These varieties could possibly be released in 2009.
The Iowa company also has been working on the next generation of Asoyia products — Asoyia MO — which feature both low-linolenic and mid-oleic traits. Mid-oleic oil has even better shelf life than low-linolenic oil, which is especially desirable for baked goods, Maxwell says. Asoyia has started seed production and will release some limited quantities of Asoyia MO in 2008.
How does the payback from non-GM low-linolenic soybeans compare to that from Roundup Ready soybeans?
Rich Gassman, crop manager, Amana Farms, Amana, IA, says that last year, with the premiums ($1.00/bu.), the non-GM Asoyia soybeans paid off even when crop protection and extra scouting costs were factored in.
“We do cost accounting down to the field level,” Gassman says, adding that the farm does more scouting on the Asoyia soybeans.
Amana Farms, which produces about 8,000 acres of crops, tested the non-GM Asoyia soybeans on 40 acres in 2006 and then grew them (Group III varieties) on 1,200 acres last year, where they yielded an average 52 bu./acre. They yielded about the same as the farm's regular Roundup Ready soybeans, Gassman says. The farm plans to expand the Asoyia acreage to more than 2,000 acres in 2008.
Amana Farms has an advantage in that it has dedicated storage bins for the identity preservation of Asoyia soybeans. The eastern Iowa farming concern has long produced value-added crops, including white and waxy corn hybrids, seed soybeans and food grade soybeans, for which it has had dedicated storage.
To ensure that the soybeans are properly identity preserved, the farm's employees receive written instructions on how planters, bins and combines are to be cleaned.
The farm's dedicated storage also enables it to monitor the best basis prices and then deliver product. For example, it delivered Asoyia soybeans on several dates last year.
Gassman says that producers who are thinking about growing ultralow- or low-linolenic soybeans or, for that matter, any varieties with improved oil quality traits, should make sure they fit into their operations. If growers do not have dedicated storage, for example, they need to be prepared to deliver at harvest. Growers also need to decide what level of scouting they want to do.
Gassman notes that the paperwork associated with identity preservation has not been too difficult because the farm has GPS on its tractors.
Niehaus advises growers to be patient when it comes to the ultralow-linolenic varieties, adding that the genetics continue to improve. In addition to planting ultralow-linolenic varieties for the oil market, he produces seed beans for Asoyia.
Growers need to compare the yields they would get with Asoyia soybeans and those with regular Roundup Ready soybeans and then determine the best payback, Niehaus adds.
Since Niehaus plants 100% of his soybean acreage to Asoyia varieties, identity preservation has not been difficult. It costs more money to spray the Asoyia soybeans, which are not Roundup Ready, but the premium makes up for the cost, he says.
Asoyia's Web site (www.asoyia.com) features an online calculator that enables growers to plug in their own numbers to see if the program will work for them.
Test the waters
Don Geary's advice to producers about low-linolenic soybeans is to start slow and grow from there. Geary farms 1,100 acres with his father Wilbur near Tiffin, OH. Last year, they planted 55 acres to Pioneer's 93M20 (RR) RM 30, an early Group III low-linolenic variety with the Roundup Ready trait. The low-linolenic soybeans yielded 48 bu./acre on average, just slightly lower than the regular Roundup Ready varieties the Gearys planted. “We would like to see more maturity groups for low-linolenic soybeans,” Geary notes.
Since the low-linolenic variety was Roundup Ready, the Gearys did not need to change their soybean management system. However, they did plant the low-linolenic soybeans first because they did not have enough bins to store them separately. They delivered the beans right at harvest, receiving a $.55/bu. premium. Farmers with the ability to store them were eligible to receive $.60/bu. premiums.
Mike Moore, who farms near Clayton, IN, had two bins in which he could store the Beck 326RRL Vistive variety that he grew on 400 acres last year. Moore farms 2,200 acres, about 1,000 of which are planted to soybeans.
With the Roundup Ready trait in the low-linolenic soybeans, Moore did not need to change his herbicide program. However, he did need to pay closer attention to cleaning his planter last spring. The cleaning added about an hour to normal planter filling time, Moore says.
He also cleaned his bins before storing the low-linolenic soybeans. “It was really no different from how we normally clean,” he says.
Moore received $.60/bu. premiums for storing the low-linolenic soybeans, which yielded an average 54 bu./acre. He did not have a choice of delivery dates, however. The delivery site only accepted the low-linolenic soybeans three days a month, he says.
The Indiana farmer plans to grow low-linolenic soybeans again this year. But he will deliver them at harvest. “If there's demand for a specialty crop, there is no reason the U.S. should import it,” he says. “We should produce here it. It helps keep demand for U.S.-grown product here and the prices up.”
“The soybean industry needs to migrate to low-linolenic oil because food processors need oil containing zero trans fats and they like soybean oil's properties,” says Asoyia's Maxwell. He concludes that the soybean industry could lose this critical market if it does not make the shift.