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Corn+Soybean Digest

The Real Scoop On Specialty Crops

An online survey of farmers who grow specialty crops was recently conducted by The Corn And Soybean Digest. The survey was designed to answer some key questions on specialty grains, such as: Which specialty crops are the most prevalent? How much are they being grown? And what kind of premiums do they generate?

Farmers of all sizes, from 100 acres or fewer to 1,000 acres or more, responded to the survey, which covered the 2003 crop year.

Food-grade corn, grown by 19% of the respondents, was the most prevalent specialty crop. Food-grade soybeans, produced by 13% of those responding, was the second most prevalent crop.

Next in order of frequency were white corn (12%), high-oil corn and waxy corn (both 9%), organic soybeans (6%), organic corn and corn grown for ethanol (both 4%).

The average premiums paid for those crops (in 2003) were 19¢/bu. for food-grade corn, $2.46/bu. for food-grade soybeans, 33¢/bu. for white corn, 18¢/bu. for high-oil corn, 30¢/bu. for waxy corn, $5.89/bu. for organic soybeans, 98¢/bu. for organic corn and 11¢/bu. for corn hybrids specified for ethanol production.

Most of the specialty grain growers (57%) had a contract for their specialty crop(s), while 32% had no contract. There was no answer regarding contract status from the remainder of respondents.

Among those who did not contract, 16% said it was “very easy” to find a market. Ten percent of non-contractors reported they found a market, although it wasn't necessarily easy. Only 7% indicated they could not find a market. The remainder of non-contractors did not respond to the question about ease of marketing.

Sixty percent of the respondents said specialty crop production increased their income.

Perhaps the most significant finding from the survey was the fact that 75% of respondents will continue to grow specialty crops.

A sizeable percentage, 34%, indicated they would grow more corn for ethanol production over the next five years. They will be aided by the fact several major seed companies are now making a concerted effort to identify hybrids especially suited for ethanol production.

Among other specialty crops that respondents raised were blue corn, high amylose corn, high lysine corn, low phytase corn, popcorn, triticale and hard endosperm corn. In addition, they grew organic barley, organic wheat and high protein soybeans.

In addition to the above-mentioned online survey, The Corn And Soybean Digest (CSD) and its sister publication, Farm Industry News (FIN), have recently conducted reader profiles that included all farmers, not just specialty crop producers.

For the 2003 crop year, 8% of CSD readers and 7% of FIN readers grew specialty crops. Among the CSD specialty crop producers, 22% raised food-grade corn, 20% food-grade soybeans, 20% white corn, 10% high-oil corn and 10% sweet corn. For the FIN readers it was 24% high-oil corn, 19% food-grade corn, 19% white corn, 19% sweet corn and 10% food-grade soybeans.

There's been lots of talk in recent years about specialty grains as a way to increase income for Corn Belt farmers. But the discussions have often been more speculation than specifics. Some key questions still need answers.

For example, the biggest question centers around just what is a specialty crop?

“I have a very broad definition of specialty grains,” says Purdue University ag economist Corinne Alexander. “‘Specialty’ is in the eye of the buyers. If buyers view something as a specialty — meaning they are willing to pay more — then it's a specialty grain. The higher the value, generally the smaller the market.”

Vince Reincke, Tuscola, IL, and his father, Steve, who run separate operations but share machinery and labor, have a portion of their combined production in specialty crops. They've been raising specialty grains and oil seeds since 2000.

“We grow white corn, high-starch corn and seed soybeans,” Vince reports. “We've been gradually increasing our acreage in the specialty crops.”

The Reinckes contract most of their specialty crops before planting. In most cases they contract total bushels, but sometimes contract a specific number of acres.

“We usually contract the number of bushels we have insured, which is based on our average yield per acre,” Vince explains. “Anything we raise above that amount we sell on the open market. For example, we might have 80 acres of white corn and will contract 10,000 bu. (125 bu./acre) of that.

“Raising specialty grains can give a farmer an advantage,” Vince points out. “However, you need to recognize there are contract conditions you must follow.”

At Washington, IA, Rob Stout has been growing high extractable starch corn (for Japanese beer), food-grade soybeans and non-GMO soybeans as specialty crops. He has recently added white corn and low linolenic soybeans to the mix.

“The low linolenic beans, which are non-GMO, are newly developed and trans-fat free,” Stout explains. “That means the oil doesn't need to be hydrogenated for use in foods, and therefore the foods are healthier. Many food manufacturers are interested in this new type of soybean. The market is really just developing.”

Stout devoted 65% of his 2004 soybean acreage to the “low-lins.”

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