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Soybeans: No longer an easy crop

Posted on February 23, 2004

Experts suggest new alternative crops, markets

Des Moines, Iowa — What’s a soybean grower to do? Rising production costs, increased pests and possible new diseases of plague-like proportions have many growers frustrated about growing soybeans.

Growers have several options, including stick with soybeans, plant more corn or raise an entirely new crop.

While many may be considering increasing their corn acres this year, one agronomist warned the current soybean-corn rotation is still the most profitable for growers.

“When you plant your second year of corn, you lose 20 percent of the yield,” said Palle Pederson, a soybean specialist at Iowa State University. “Also, because the soybean is a legume, you lose the nitrogen credit from the plant. It saves a farmer money from having to spray more nitrogen, which is becoming more expensive.”

Recent results from a 15-year crop rotation study in Wisconsin showed a corn-soybean rotation was more profitable than growing corn on corn. According to the study, first year corn, averaging 172 bushels an acre, and corn rotated annually with soybeans averaging 169 bushels an acre, yielded 19 percent and 17 percent more than planting continuous corn, which averaged 140 bushels an acre.

“I know of farmers in soybean areas that have thought about going into three years of corn. I wouldn’t recommend that,” Pederson said.

If increased corn isn’t the answer, what is? That’s what Roger Van Ersvelde, a farmer from Brooklyn, Iowa, wanted to know. He and other growers in his area were tired of the commodity market and wanted to raise an alternative crop.

“We didn’t want to produce just a commodity, but something that went into a value chain and that we profited from that value chain,” he said.

Van Ersvelde met with a local businessman in his community who builds car parts from poly fibers mixed with natural fibers from industrial hemp grown in Canada and a similar plant called kenaf. U.S. growers cannot grow hemp, but it is legal to grow kenaf. The two decided how many acres of kenaf would be needed for production, and Van Ersvelde contacted several other growers to help fulfill the need.

“It’s not just a commodity we’re producing, it has value to us and our community,” he said.

Many Midwest growers have discovered the potential of raising biomass crops such as kenaf, switch grass, gamma grass, miscanthus and sweet sorghum. The crops may help the U.S. switch from a petroleum-based economy into a “new carbon” or bio-renewable economy in which farmers are the new oil barons.

Oil well of the future?

Thanks to USDA’s new bio-based procurement program, biomass crops might soon become a profitable alternative crop for many more Midwest growers.

Biomass crops, also called “new carbon”, are any bio-renewable materials that can be used in the place of petroleum for energy or fiber production. About everything made from petroleum can be made from biomass crops, including fuel, plastic, fiber and building materials.

“The thing that is driving farmers to look at this is that generally the environmental impact of a lot of these biomass crops is less than for corn and soybeans,” said Robert Brown, professor and director of the Center for Sustainable Environmental Technologies at Iowa State University.

Many biomass crops are perennial plants, which is beneficial because the root systems stay alive to help hold soil in place. Biomass crops also require fewer fertilizers and pesticides than corn and soybeans, and need less tillage and production inputs, Brown said.

As with most new markets, it is difficult to estimate the price farmers will receive for biomass crops. Brown has not studied market prices, but said most farmers have indicated they expect $50 per ton in order to be profitable. Kenaf, switch grass and miscanthus yield from five to 10 tons an acre, while sweet sorghum and eastern gamma grass may yield upward of 15 tons per acre. “I hear statements from some farmers to the effect that in 50 years they won’t be growing soybeans in Iowa,” Brown said. “If we make biomass crops profitable for processors, they could have a real future.”

Growers who do not want to buy new planting or harvesting equipment for biomass crops could instead consider raising protein alternatives such as field peas.

Double crop with field peas

They have not historically been grown in the Midwest, but some Illinois farmers are betting they can raise yellow field peas as an alternative crop.

Steve Ayers, a crop specialist in the Champaign County, Ill., Extension Office, said about 7,000 acres of field peas were grown in Illinois last year, and growers hope to increase acreage in 2004. Yellow field peas are similar to the peas home gardeners grow, but they’re left in the field until the seeds are dry and hard. Peas are a cool-season crop that can be grown with little seasonal rainfall. Most of the Illinois field peas are being raised under contract for a company that will sell them to Mexico for feed protein use.

“They’re similar to split peas and harvested similar to soybeans,” Ayers said. “You plant them in March, or as early as you can get them in, and harvest in late June.” Growers will double-crop their fields with soybeans following the field pea harvest, which is the best way to make field peas a profitable venture Ayers said. The Illinois growers have a contract guaranteeing them $3.50 a bushel. Last year’s crop yields ranged from 30 to 70 bushels an acre. Until now, field peas have been grown mainly in the Dakotas and other western states. There is some worry that the Midwest may be too rainy for the crop.

One advantage to raising field peas, known as pulse crops, is they are listed as a program crop in the farm bill and qualify for Loan Deficiency Payment (LDP) rates.

“In Illinois, who knows what we may get. There may be some problems growing them,” Ayers said. “But it is an alternative crop people are looking at. They have a market already, which is usually one of the problems with alternative crops.”

Organic opportunities

If growers still aren’t convinced they should give up soybeans, maybe they should consider growing organic beans instead. Premiums for non-genetically modified soybeans range from 50 cents to $1 a bushel. High quality, organic-certified soybeans could fetch premiums of up to $10 a bushel.

Lynn Clarkson, manager of Clarkson Grain Company in Cerro Gordo, Ill., has been buying and selling organic crops for the past 10 years. Clarkson said organics are a good option for farmers who want out of the “commodity crunch” but still want to raise corn and soybeans.

“You have to change the way you think,” he said. “You have to think about what the buyer really wants. Does the buyer really want a No. 1 soybean? Not really. But they are very interested in organic beans.”

When DTN interviewed Clarkson in middle February, the market price for normal No. 1 soybeans was about $8.40 a bushel. If that same bushel was a non-GMO variety, Clarkson said, the price would be close to $9 a bushel. The price continues to increase with quality. Certified organic soybeans may sell for $12 a bushel. Top quality organic soybeans that could be used in tofu or soymilk may bring as much as $18.50 a bushel.

Most organic growers with whom Clarkson works are contract growers for food processors. That gives them a guaranteed market that most growers do not have. Clarkson said he favors this arrangement, not just for the growers’ sake, but because it allows them to trace the crop back to the farm‚ a growing requirement of many food processors.

“So we do provide alternative market paths, but not alternative crops because you’re still raising corn and soybeans, even wheat,” he said. “We’re trying to focus on distinctions within that chain that are more valuable to consumers.”

South still favors soy

In contrast to their northern neighbors, southern growers are high on soybeans this year, said Chris Tingle, a soybean specialist at the University of Arkansas.

“We didn’t have the insect and pest problems other areas did,” he said. “We see acres stabilizing or getting better.”

Arkansas planted about 3 million acres of soybeans in 2003, irrigating about 1.7 million acres. Those soy growers looking for crop alternatives do have some options, Tingle said, including rice, cotton, grain sorghum or corn.

“I don’t see a big shift in the Mid-South like the Midwest. We may take a little bit of the cotton and corn acres,” he said. “We are used to the pest problems. We may be better farmers than the Midwest because we do have these problems and we still are in business.”

Elsewhere in the South, Tennessee planted 1.2 million acres of soybeans in 2003, Mississippi planted 1.4 million acres and Alabama grew 170,000 acres. According to agronomists, growers in those states rely on cotton, corn and rice as crop alternatives.

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