If you simply look at the numbers, there's no doubt that U.S. soy has evolved from a support crop to a major player in the global marketplace. In 1991, the year the checkoff was created, the value of the U.S. soy crop was $11 billion. Fast forward to 2014, and the overall value more than tripled to $40 billion.
This evolution of U.S. soy demand both at home and abroad has been due in major part to the efforts of the soy checkoff. Key checkoff activities, such as marketing, research and commercialization programs, have, and continue to, facilitate market growth and creation.
The nine priority goals and audiences outlined in the checkoff’s new long-range strategic plan, pay particular attention to opportunities that will increase the value and preference for U.S. soy. It’s this blueprint for building demand that will help to ensure a strong and profitable future for U.S. soybean farmers.
Meeting End Users’ Needs
One of the primary ways the checkoff continues to maximize demand and profitability is by looking at the challenges that its customers face and how it can provide solutions. Each solution might look a little different depending on the audience, but it’s that added value for customers that keep them coming back for more.
“Taking a customized approach to our end users helps us to build preference for U.S. soybeans,” says Lewis Bainbridge, soy checkoff farmer-leader and Demand Action Team Chair from South Dakota. “We aren’t operating in a one-size-fits-all market. Maintaining and extending our reputation as a trusted supplier is key to our future success.”
For example, feeders, such as Gary Cordier, Vice President of North America Soy Sales and Merchandising at Perdue, find great value in the constituent values and the quality of the soybean meal and oil.
“We are raising beans for yield and sometimes these components are not appreciated and that undermines the value of the soybean,” said Cordier. “When you’ve got competing ingredients – DDGs, canola, beans from international markets – we (U.S. soybean farmers) have to stand apart head and shoulders above other suppliers around the world. Our customers are looking for that.”
While other customers, such as Neoh Soon-Bin, director at the Soon Soon Group, an integrated grain, feed, oilseed and oil-processing company based in Malaysia is thinking about sustainability and the increased demand for it from his customers. Today, more and more customers are asking to have their raw materials sustainably sourced – a demand that U.S. soybean farmers are able to supply.
It’s the overall U.S. Soy Advantage of quality, sustainability and value that appeal to the key audiences targeted by the checkoff to build demand. These priority audiences of crushers, buyers (feed mills and oil refiners), feed mill nutritionists and end users must understand how U.S. soy can help meet their specific needs and improve their bottom line.
With such a huge supply of soybeans produced in the U.S. each year, it is essential for demand to be strong in a variety of markets. No real surprise here, but one international market that remains incredibly strong when it comes to soybean demand is China.
In the past 25 years of the soy checkoff, China has gone from a competitor of U.S. soybean farmers to the largest soybean customer. In 2014, China imported $14 billion worth of U.S. soy, which is more than the total 1991 U.S. soy crop value. And a recent U.S. Soybean Export Council (USSEC) report indicates annual soybean imports in China will increase by between 110 million and 183 million bushels per year for the next five years.
But, even with China’s increase in soy imports, it is imperative for demand in other regions around the world to continue growing. With strong demand-growth opportunities in Southeast Asia and Indonesia, the checkoff is working to explore additional markets and build preference with buyers for U.S. soybeans over our competitors and promote the U.S. Soy Advantage.
Researching and Commercializing New Uses
The checkoff has also been pivotal in building demand by moving U.S. soy from the fields into factories. Many end users in manufacturing, such as Ford Motor Company and Goodyear have replaced standard industrial ingredients, such as petroleum, latex and mineral oil, that don’t have environmental benefits, with the renewable resource of soy.
“The checkoff helped us to complete trials of soy seat cushions, backs and headrests in the plant environment, and to work through technical and logistical issues that came up,” says Debbie Mielewski, Ford’s senior technical leader, materials sustainability. “And the soy checkoff continues to introduce us to many other smart people with a similar objective to utilize soy materials in innovative ways.”
Higher-value products, such as high oleic soybean oil, are also another demand-creating opportunity for soybean farmers. Spearheaded by the checkoff and industry partners DuPont Pioneer and Monsanto, high oleic varieties give farmers an opportunity to reclaim food-industry demand with its high-stability, trans-fat-free oil. When the usage and acreage goals for high oleic soybeans are met, high oleic soybeans will add an estimated 46 cents per bushel for all U.S. soybean farmers.
Driving Demand with the U.S. Soy Advantage
Thanks in part to the soy checkoff, U.S. soybean farmers have a strong advantage over other soybean producers in the world. But the work to maintain that competitive advantage is never done.
According to David Tillman, Vice President Sales & Marketing at Stratas Foods, LLC, a leading supplier of fats and oils to the Foodservice, Food Ingredients and Retail Private Label markets in North America, the entire soybean industry has to continue to look forward and be industry leading innovators or the soy industry will lose market share to other crops.
“The world has moved to a much more competitive environment and the days of ‘just grow more of it’ is well passed us by, said Tillman. “In today’s world, the industry has to continue to discover ways to add value (beyond commodity price points) not only in the end product (like high oleic soy) but discover and create value along the way.”
Rest assured that it is the U.S. Soy Advantage - quality, sustainability and value- that will continue to add that value for soy in the marketplace. And it is the soy checkoff that will continue to keep U.S. soy top of mind with key customer audiences and how soy can better solve their business challenges.
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