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Corn+Soybean Digest

Growing Identity-Preserved Soybeans Nets a $1.50 Premium for Iowa Growers

Larry Lane gets paid very well to clean out his equipment: $1.50/bu. for low-saturated-fat (low-sat) soybeans. His planter, wagons, combine, augers and bins must be free of commodity-bean varieties to maintain genetic purity.

His identity-preserved (IP) soybeans deliver a healthy oil with half the saturated fat of conventional soybean oil. Lane markets his beans under the brand name Iowa Natural, through Innovative Growers, an Iowa-based LLC. Iowa Natural oil is expeller-pressed rather than hexane-processed. (See It appeals to consumers seeking low-fat, locally produced food.

The beans are not organically grown but they are processed without chemical refining, which extends oil shelf life.

Lane grows one of many specialty soybean varieties developed at Iowa State University (ISU) by Walter Fehr and colleagues. The ISU program was the first to introduce a wide range of specialty beans, including those with low-linolenic acid, low saturated fat, increased oleic acid and no beany flavor.

“Iowa Natural's niche is low-saturated-fat beans processed without hexane to preserve the oil's antioxidants that preserve its shelf life,” Fehr says.

Lane joined 30-35 other growers in this IP marketing effort 10 years ago to add value to his crop when commodity prices were quite low. Sales have grown steadily, he says.

HE HELPS WITH marketing and consumer education at farmers' markets and home and garden shows to promote the oil's nutritional attributes to consumers. Iowa Natural low-saturated-fat, expeller-processed soybean oils are available through HyVee supermarkets, online and at local farmers' markets and consumer trade shows.

“The extra costs of growing these beans are pretty small,” says University of Illinois Extension Farm Management Specialist Gary Schnitkey. Besides having to segregate his soybeans, Lane has a modest yield penalty of 5-6%. “And cleaning his equipment to maintain purity is more of a labor item than a cash expense, so the $1.50 premium more than makes up for that,” Schnitkey says.

Lane's high plant populations' canopy is an effective part of his weed control, along with mainstream herbicides. He relies extensively on IPM practices, and the farm is ISO-9001:2000-certified.

One cost that's difficult to quantify is the risk of entering a new market. Just how risky it is to market IP beans? “Markets for specialty beans tend to develop in good economic times,” says Chad Hart, ISU economist. “As we recover from recession in the next few years we'll likely see them rebound.”

Fehr, the ISU soybean breeder, says the modified soybean-oil market “is particularly interesting right now because of competition from other vegetable oils such as canola. The challenge for marketers is finding a unique niche that other vegetable oils can't fill.”

Fehr is grateful for entrepreneurial growers and their organizations, who “take chances, looking for new markets to improve our competitive situation with other crops,” he says. “They have to figure out how large the demand is for their product and how much consumers are willing to pay for those health benefits.

“Iowa Natural's combination of processing and genetics provides a unique product,” Fehr says. “Without entrepreneurs like Larry Lane and Iowa Natural taking chances in the production and marketing of special-use soybeans, the U.S. soybean industry will fall behind other crops that would like to take over our markets,” Fehr says. “Read a food ingredient label and you will see ‘…contains palm, soy or other vegetable oils.’ Food companies keep their options open for the lowest cost oil that delivers a specific flavor and health benefit.”

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