Between double cropping and its proximity to one of the country’s largest high-oleic soybean oil purveyors, the United Soybean Board sees Delmarva as a big area for more high-oleic soybean acres.
“It’s really expanding pretty quickly,” says John Jansen, vice president of oil strategy for United Soybean Board.
About 500,000 acres of high-oleic soybeans were grown nationwide this year. He expects that number to rise to 700,000 acres next year, 900,000 acres by 2022 and as much as 1.5 million acres in 2023.
Most of the country’s high-oleic acreage is in Indiana and Ohio, but a lot of production is on Delmarva — around 20% of total acreage — and in Maryland and Pennsylvania, he says.
Delmarva is a targeted growth region because farmers can double-crop soybeans after wheat, and it’s close to big cities and major food manufacturers.
“We’re really trying to ramp up our conversation with farmers in that area,” he says.
Food processing accounts for 70% of the total end market for high-oleic oil, Jansen says, followed by food service and industrial applications, including motor oil and adhesives. Asphalt is another potential market for high-oleic oil, he says, and he predicts the split between food-related and industrial uses of high-oleic beans to eventually get to 50-50.
"The potential for further chemical reaction of the mono and saturated fatty acids of high oleic is extremely positive," he says. “Once we reach that 1-million-acre milestone this project will kind of take a life of its own.”
Good premiums but weed pressures
Brenda Burrier, who grows 1,200 acres of crops in Union Bridge, Md., says more acres of high-oleic soybeans are needed to fill increased demand from area snack food companies. But not all farmers are on board.
She says that farmers in the region ramped up plantings of high-oleic beans a few years ago only to see demand for the oil decline and the premium tank. Burrier, who sits on the USB board and is the oil target area coordinator, says the market is rebounding with the premium hovering around 50 to 60 cents a bushel from Perdue Agribusiness, the largest purchaser of high-oleic soybeans in the region.
Perdue recently announced its 2021 production contract, offering a 50-cent-per-bushel premium for delivery to a designated elevator and a 65-cent-per-bushel premium for on-farm storage. Growers can also get 10 cents a bushel more if they plant all their soybeans to high oleic.
Courtesy of Perdue AgribusinessCRUSHING FOR OIL: The Perdue Agribusiness crush plant in Marietta, Pa., is one of the company’s most critical facilities for high-oleic soybean crushing.
But if you farm west of the Chesapeake Bay, depending on where you are, the company’s Marietta, Pa., crush plant is a long drive. Burrier, who has 44,000 bushels of grain storage, can hold her beans for a while until Perdue calls, but she still must contract for the beans to be sent to Marietta and is docked 30 cents a bushel for it. If a farmer doesn’t have storage, then the beans are sent at harvest when local basis is lower, which further takes away the high-oleic premium.
"So, we need another player to make this a little more marketable," she says.
She started growing high-oleic soybeans in 2013 with just 50 acres, gaining a yield bump over conventional of between 10 and 15 bushels in her double-crop acres, averaging between 45 and 52 bushels an acre.
There is nothing inherently different about planting or growing high-oleic beans in relation to conventional soybeans, she says. Planting and harvesting dates are roughly the same, and the management of the crop is the same, too.
But weeds, especially Palmer amaranth and marestail, can be a problem and are challenging to control since high-oleic beans don’t have stacked traits that can tolerant an herbicide like dicamba. Since her location is next to a vineyard, which already limits the types of sprays she can use, Burrier says that she took some acres out of high-oleic this year and planted them to corn in order to kill the weeds once and for all. She expects those acres to be in high oleic next year.
She grew up to 500 acres of high-oleic soybeans a year. Burrier says that better seeds from the seed companies are in the pipeline but not available right now.
William Layton, a grower in Vienna, Md., doesn't grow any conventional soybeans, only high oleic — Pioneer’s Plenish. In fact, he’s been growing Plenish soybeans ever since they were first offered by Perdue several years ago.
“It’s not different than growing any other soybean. You’re not giving up the ability to use Roundup; you’re not giving up yield,” Layton says.
But bad news travels fast, though, and one year of a bad experience can leave a bad taste in a farmer’s mouth.
Cory Atkins of Seaford, Del., who grows 800 acres of corn, soybeans and vegetables, says he has no interest in growing high-oleic soybeans. The weed pressures are too much, he says, and there are limited places to take a finished crop.
“For me, weed pressure is a bigger deal than what they’re going to give you,” he says. “There are newer genetics with a lot better weed control out there. Most people have grown them, one and done, that’s it.”
More acres needed
Gary Cordier, senior vice president of global grain and international commodities for Perdue, says the company has been marketing high-oleic beans for seven years.
High-oleic beans were supposed to make up for the lost share of the soybean market when people grew sour on trans fats in the late 2000s. But the ramp up to high oleic has been slower than expected, he says, as testing and labeling have made it difficult for food companies to get high oleic into their products.
That has since changed.
“We certainly have seen a real shift in demand,” he says. “We believe it’s an awesome opportunity for the farmer, especially for farmers in the East. We need more acres; we needed more acres than we did last year.”
For Perdue to be a viable supplier for the market, Cordier says that production needs to increase 30% next year, with many more acres of high-oleic beans growing.
Food companies are Perdue’s biggest customer, he says, but they’ve also done some limited shipments of high-oleic beans to Japan and South Korea.
About 200 farmers grow Plenish soybeans on contract for Perdue, with a lot of those growers 100% high oleic.
Layton says that weed problems make growers think that the high-oleic seed is a problem and is impossible to grow successfully. His experience says otherwise.
“My experience is when I grow them against conventional beans, they've come out yielding just as well for me. They’ve had those problems but so have conventional beans," he says.
Burrier says that her issues are more logistical than anything, and that she’s still bullish on high oleic.
“It’s a logistics thing. If we could have something here on the western side, we could cut loose,” she says. “The seed is accessible; the programs are really good; and if they are not under high weed-control pressure, go for it. We need to plant it.”