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Less supply and more demand are driving non-GMO bean premiums higher — again.

Mindy Ward, Editor, Missouri Ruralist

March 27, 2019

4 Min Read
soybeans in the hands of a man in the field
MONEY IN HAND: Soybean growers may want to consider growing non-GMO soybeans this year as traditional commodity prices remain low. Zoran Zeremski/Getty Images

Low commodity prices have many farmers looking for options to capture even more value from every last acre. Andy Determan, director of grains for Redwood Marketing Group, says non-GMO soybeans might be the solution.

“Non-GMO and organic markets are definitely a heavy growing marketplace,” he told a group of farmers gathered at the Farm Tank forum in Nevada, Mo. “The lower cost up front and higher prices at the end make non-GMO beans a great opportunity.”

Determan’s company sources and sells commodities, specializing in food-grade markets.

Changes in the southeast Asia markets increased demand for non-GMO soybeans and prompted premiums to jump from 70 cents per bushel above regular soybean prices in 2015 to highs of $2.10 above this year. It is not a fly-by-night fad. Determan looks for premiums to remain high for the next three years.

Changes in the market

For the most part, southeast Asian countries derive much of their protein from soy. Recently, in Japan, Korea and Taiwan, the governments required all milk, soy sauce and tofu in school lunches to be non-GMO.

Then, other countries such as Vietnam, Malaysia, Thailand and Indonesia required all tempeh, a fermented soy product often used to replace meat in a vegetarian diet, to be derived from non-GMO soybeans.

“Overnight, it almost created a 15 million bushel increase in demand for non-GMO soy,” Determan says. But the supply was not there.

China is now enforcing a law requiring all imported beans to be non-GMO. The country is sourcing soybeans from Argentina and Brazil, but now tapping the Canadian supply.

“Canada has long been the No. 1 supplier of non-GMO beans for Japan, Korea and Europe,” Determan says. “Now all of those non-GMO beans are going to China, forcing new countries to come into the U.S. for beans. That is what has forced the increase in demand.”

What buyers want

These markets have become picky in what they are buying in terms of non-GMO soybeans.

Determan says that soybean seed companies have developed varieties to fit what the export markets want, moving away from dark hilum beans with black eyes to those with clear or white hilum. “All the new varieties they come out with offer a cleaner tasting, whiter soy milk,” he says.

They also want clean, food-grade beans.

Redwood Group bought its Pleasant Hill, Mo., facility about two years ago. Since then, Determan says the company completed several upgrades, including adding color sorters and destoning machines to satisfy the food-grade market.

“Product that leaves our facility has to be ready to go on shelf,” he says.

Consumers in Middle Eastern countries and southeast Asia buy soybeans from open-air markets similar to farmers markets. However, these beans are not bagged and sold prepackaged. People bring their own storage sack, choose the product, weigh it, pay and take it home.

The expectations are high.

“We have a purity level of 99.1%,” Determan says. “That means if we pull out a 100-gram sample, there can be one bean that is GMO or one piece of corn with GMO trace in it to meet the standard. “

Determan says much of the process starts at the farm level.

Farmer requirements

Redwood Group tracks its non-GMO soybeans heading to overseas markets all the way back to the field.  It knows the seed variety, field, date planted, date and type of herbicide or pesticide sprayed, harvest date, bin number and location, and more.

“It is all about data,” Determan says. “We need to know and track these in order to sell into these markets.”

All the details are outlined in the company’s grower agreement. In it are requirements for keeping seed varieties separate, planter box cleaning, combine cleaning and pesticide and herbicide use.

Determan warns growers that the challenge for non-GMO soybeans is dicamba. “Drift is an issue,” he says. “It is one of those things that hurts yields and the ability to sell into the food sector.”

If there’s a trace of chemical in the plant, it cannot be sold for food consumption. “You need to know what you have in your neighborhood,” he adds. “If farmers are spraying dicamba, non-GMO may not be for you.”

Those willing to make the switch can add value to their bottom line. The company is looking to secure more non-GMO soybean acres, particularly around its Pleasant Hill facility.

Determan says premiums have grown by $1.40 from only four years ago as a result of less supply and higher demand.

“For those that have the time to grow and handle non-GMO soybeans, it can add $2 per bushel,” he says. “That can be a big deal, especially when you are looking at $8.50 soybeans.”

About the Author(s)

Mindy Ward

Editor, Missouri Ruralist

Mindy resides on a small farm just outside of Holstein, Mo, about 80 miles southwest of St. Louis.

After graduating from the University of Missouri-Columbia with a bachelor’s degree in agricultural journalism, she worked briefly at a public relations firm in Kansas City. Her husband’s career led the couple north to Minnesota.

There, she reported on large-scale production of corn, soybeans, sugar beets, and dairy, as well as, biofuels for The Land. After 10 years, the couple returned to Missouri and she began covering agriculture in the Show-Me State.

“In all my 15 years of writing about agriculture, I have found some of the most progressive thinkers are farmers,” she says. “They are constantly searching for ways to do more with less, improve their land and leave their legacy to the next generation.”

Mindy and her husband, Stacy, together with their daughters, Elisa and Cassidy, operate Showtime Farms in southern Warren County. The family spends a great deal of time caring for and showing Dorset, Oxford and crossbred sheep.

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