Guest Commentary

Opportunities Knock For Soybeans

Ethanol is garnering a lot of attention these days. As a result, corn acres have jumped. But that doesna€™t mean it is the only crop with good things happening. Soybeans continue to have strong demand and strong pricing, which results in big

The market for all renewable fuels is growing, a plus for corn and soybeans. Ethanol is not direct competition to soy biodiesel, so there is more than enough room for all renewable fuels. Demand for soy biodiesel continues to climb with 75 million gallons sold in 2005 and an estimated 225 million gallons sold in 2006. More than 300 million gallons of biodiesel are expected to be used in 2007. With petroleum prices continuing to increase, options like biodiesel and ethanol look more attractive.

But biodiesel is just one of the many successes for soybeans. Soybeans are popular across the world; global consumption of soybeans has grown nearly 106% since 1990. Total U.S. soybean exports have more than doubled from 598 million bushels to 1.2 billion bushels in 2006. About 40% of U.S. soybeans are exported.

What is the biggest export market for soybeans? China. In fact, China used to be a net exporter of soybeans, but thanks to checkoff marketing efforts it now buys more U.S. soybeans than any other country. In fact, this marketing year alone China has purchased 410 million bushels of soybeans, and more purchases are anticipated down the line. Whata€™s driving this demand in China? A big part of it is thanks to aquaculture, or, more simply, fish farming. The Chinese aquaculture industry accounts for approximately 150 million bushels of soybeans a year.

Big demand. While biodiesel and export markets get much of our attention, most soybean oil goes to the edible oil market. Many in the food industry are eliminating trans fats from foods, and low-linolenic soybean oil is an excellent means of achieving this objective. The number of low-linolenic soybean acres continues to climb. Nearly 1.75 million acres are expected to be planted, resulting in 27 million bushels and 285 million pounds of low-linolenic oil.

Another area driving soybean demand is animal agriculture. Animal agriculture is our No. 2 customer, consuming nearly all of the U.S. soybean meal used in this country. The demand for meat worldwide is expected to increase, which means more demand for U.S. soybean meal as a protein source for livestock and poultry.

Soybeans are one of the more versatile crops, which makes them ideal for a variety of industrial uses. Soybeans can be found in everything from inks and paints to plastics and construction items.

All of these factors drive demand for soybeans. Exports continue to increase, new traits are coming to satisfy the edible oil market and biodiesel continues to be a big demand driver. The soybean checkoff is working hard to keep our soybeans safe by investing in research and safeguards for soybean rust, as well as other yield-robbing diseases and pests.

As a farmer, I absolutely believe that soybeans are still a bankable crop. The soybean yield trendline continues to move up. Soybeans have an excellent history and a bright future. Every spring I cana€™t wait to get the soybeans in the ground.

Soybeans complement crop rotations and work well in rotation with corn, wheat, cotton and rice. Soybeans are beneficial to the soil, agronomically speaking. In addition, soybeans can be planted later than other crops, so timeliness can be a factora€”especially when weather delays planting.

I think ita€™s great to have several options in agriculture. As a farmer, that is what helps the food system come together as smoothly as it does in this country. In addition, many soybean farmers also raise other crops like corn. Good farm management means many farmers will grow soybeans or corn, depending on what is best for their situation. So, as a rule, whata€™s good for corn farmers tends to be good for soybean farmers, as well.

Eric Niemann is a soybean farmer from Nortonville, Kan., and chairman of the United Soybean Board.