International marketing of soybeans is very important, but of equal importance is the indirect export of soybeans through the export of meat and livestock. Nebraska corn and soybean grower Mark Jagels is also vice chairman of the U.S. Meat Export Federation (USMEF). He’s quick to point out that livestock is the number one customer of corn and soybean growers, so overseas demand for meat equates to domestic demand for feed. Jagels cites a study commissioned by the USMEF indicating a return of $7 for every $1 invested in checkoff funds used to promote international demand for U.S. meat and livestock.
A significant amount of U.S. soybeans and corn are indirectly marketed internationally through high protein rations fed to livestock and poultry. The meat is exported to other countries.
“It’s a way for us to add value to a product that we grow, whether that would be on the corn and soybean side or adding value through meat exports,” said Mark Jagels, a corn and soybean grower in Nebraska who is also vice chairman of the U.S. Meat Export Federation. Jagels goal, like other farmers who raise corn and soybeans, is to get the best yield he can.
“We have to find a home for what we’re doing,” said Jagels. “We’re producing more domestically; we probably aren’t using any more inside the United States, but exporting the soybean product or adding value to the pork side, to the poultry side, to the beef side.”
There’s a profitable relationship between soybean and corn growers and livestock producers, according to Jagels, who cites a study by Cornell University indicating that return on the checkoff export promotion investment is seven to one. On a beef animal, which Jagels raises, he says exports add $200 per head.
“Without that extra $200 that we’re getting just because we’re exporting the product, that is actually making us profitable,” said Jagels, “We’re making money instead of losing money.”
Jagels says those promotions, resulting in record 2011 pork and beef exports, benefited both livestock and grain producers.
Demand for ethanol will grow a bunch once more vehicles are approved to burn 15 percent ethanol versus the current widely used 10 percent blend. But Mark Jagels, one of the directors of the Nebraska Corn Growers Association, believes a lot of ethanol demand is being left on the table because of the number of people who don’t realize they’re driving a vehicle capable of using the much higher blend of 85 percent ethanol to 15 percent gasoline. The infrastructure to handle the lower priced E-85 is becoming more common and Jagels says there are “a phenomenal number of flex fuel vehicles” on the road that can fill up with it. He maintains that educating drivers of these vehicles is essential to using more E-85.
Geoff Ruth has leadership in his blood. The Nebraska Soybean Association president is the son of Bart Ruth, a former president of the American Soybean Association. The younger Ruth had just emerged from a Commodity Classic caucus meeting and would soon be due at another. He was concerned that the large trade show and various other trappings of the large convention, “the fun part of the Commodity Classic,” might get only a fleeting glimpse before it was time to head back to his family’s farm. And although he appears rather young to be leading his state’s soybean association, he’s fully immersed in the formation of American Soybean Association policy. For instance, Geoff makes it clear that he’s all for the construction of energy transportation pipelines across the country as long as they’re sustainable environmentally.
Roseville, Illinois farmer Ron Moore feels compelled to let others know that growers raise their crops sustainably. Moore says that he and his fellow farmers raise soybeans while using fewer natural resources and increasing productivity. He says it also creates the opportunity to have a better farming operation and better life for succeeding generations.
“We’re using fewer natural resources, we’re no-tilling, we’re reducing our carbon footprint , reduce greenhouse gas emissions, and all the time increasing productivity,” he told Brownfield.
Even though commodity prices are at record highs, they’re chased relentlessly by what it costs to raise them. In one year, the breakeven price for corn went from $4.40 a bushel to $5.20 a bushel, according to Darren Frye, a market consultant with Water Street Solutions.
“We have a shrinking margin this year,” Frye told Brownfield. “I think what farmers are going to have to do is sell their grain in a shrinking margin timeframe, which they haven’t been wanting to in the last couple of years, because they haven’t had to do that.”
As a result, Frye says farmers will either have to accept the smaller margin “or try to increase the margin through crop insurance and through increased production dropping that breakeven down and some of those other strategies that will add to it.”
Wisconsin Corn Growers are focused on communicating their priorities for the 2012 Farm Bill to include a strong revenue-based safety net in place of direct payments. Cal Dalton, a grower in Pardeeville, Wisconsin and Vice President of the Wisconsin Corn Promotion Board says his group has met with Wisconsin Representatives in D.C. and newly elected Senator Ron Johnson to express their Farm Bill priorities as well as their ethanol priorities which include sound national energy policy and the need to get going with E-15 at the pumps.
Patrick Reed, Customer Solutions Manager, North America for Novozymes was busy at 2012 Commodity Classic showing farmers how to produce more with less. Reed tells Brownfield Novozyme products are very friendly, convenient, provide great return on investment and maximize yields per acre.
Corn and soybean growers learned about new products from Novozymes as well as some longstanding products farmers know and trust.
Burrus Seed Company exhibited at 2012 Commodity Classic. Farmers visiting the exhibit had plenty on their mind, according to Todd Burrus. From seed supply to weather, the corn/bean ration in 2012 to what’s left in flex acres, farmers have much to think about. Todd Burrus told Brownfield that Burrus Seed Company is the right choice for farmers because Burrus consistently does things right, so can be trusted; the product quality is high; Burrus has access to technology and genetics farmers need today; and Burrus focuses on putting the right crop on the right acre.
Jim Call, a farmer from Western Minnesota and Secretary for United Soybean Board (USB) was busy at the 2012 Commodity Classic educating those attending about the work of the USB and success of the soybean checkoff. As International Marketing Chairman for United Soybean Board, Call gets exciting talking about the work of the 9 offices USB has overseas and the work being done to convince customers to buy soybeans from the United States.
Currently, 60% of soybeans raised in the United States are exported. Customers overseas are attracted to our banking and transportation systems as well as the reliability and quality of the product.
Call told Brownfield if we are to double our yields by 2030, it is extremely important to keep a strong checkoff program in place.