04 Sep Soybean’s Value Proposition
Dan Davidson, Agronomist PhD, CPAg, CCA
What are you really harvesting and selling when growing soybeans?
When planting commercial soybeans (not seed beans), you may expect the elevator or processing plant to buy the 60-lb bushels of grain that you harvest. However, what you are really selling isn’t a bushel of grain, but pounds of oil, meal and hulls.
Processors buy bushels of soybeans either directly from growers or elevators. What they are most interested in is how much oil and meal can be extracted (for the lowest possible cost), how much value that meal and oil contains, and what their customers want. In the case of meal for animal feed, it must contain high protein and a good compliment of amino acids.
What’s in a soybean seed
A bushel of soybeans can be described by physical and intrinsic characteristics. Physical characteristics include grade factors, damage, discoloration, foreign matter, moisture and odor. Intrinsic characteristics, determined by analytical tests, include protein, oil, amino acids, fatty acids and specialty oils. When processed, a 60-lb bushel of soybeans contains around 11 pounds of oil, 47 pounds of soybean meal and one or two pounds of hulls.
The ideal soybean variety has 19% oil and 35% protein – the amount of crude protein it takes to make a high-protein 48% meal. Oil and protein below those levels cause processors to widen the basis and discount the price they are willing to pay for beans. Today’s soybean meal typically specs out at 47.5% protein or less.
Protein trend line
Protein levels in commercial soybean varieties have been trending downwards over the last couple decades as yields have increased. Oil levels, however, have been relatively stable. Seed protein levels can range anywhere from 32% – 36%. Levels in the Northwest Corn Belt – including the Dakotas, Northwest Iowa, Western Minnesota and Northeast Nebraska – often measure in the low 30’s. The central Corn Belt states will record protein levels between 34% – 35% while in the East, Southeast and Delta, we see levels of 35% – 36%. In years of stress, crude protein is high. In ideal “racehorse” years with high yields, crude protein is lower. The decline is concerning because it places U.S. soybeans at a disadvantage compared to South American soybeans.
The two charts below depict U.S. average protein and oil content from 1986 – 2017. It is calculated using the average protein content of the states sampled in the USSEC quality survey, weighted by state production.
Amino acids matter
While crude protein appears to be low and declining over time, it doesn’t truly reflect the maximum economic value of meal based on amino acid composition. Research supported by the soybean checkoff demonstrates that today’s top-value varieties can reduce swine finishing costs as much as $3/head compared to the lowest-value varieties. The savings on broilers can be as much as $0.07 per bird.
The composite feed value of the key amino acids is becoming the new quality measure. The feed value measure – expressed in $/ton – was developed by HY+Q in conjunction with swine and poultry nutritionists who formulate feed rations based on seven essential amino acids, not levels of protein in the meal. And while there are still soybean varieties that rate poorly in crude protein and amino acid levels, there are varieties that rate high and provide more value to the meal.
Comparing the value of amino acids in soybeans submitted by Illinois farmers in 2017 illustrates the opportunity to improve end-user value. Soybean meal from the top 10% of samples would be worth $324.39/ton based on their superior amino acid profiles. That’s $13.06/ton more than the value of the remaining 90 percent of samples. This improvement comes from selecting better genetics.
Value Differences in Illinois Soybeans (2017)
|Top 10%||Bottom 90%||Difference|
|Composite Meal Value ($/ton)||$324.39||$311.34||$13.06|
What growers can do
Unfortunately, growers don’t have many options when it comes to producing soybeans with higher crude protein or exceptional nutritional value. Ask your seed dealer for varieties that either have high crude protein levels (35% or more) and exceptional nutritional value without sacrificing yield or oil content. There are varieties like this available and if you begin asking for them, seed companies will begin selecting for and identifying them in their seed catalogs.
There are no known management practices that lead to consistently higher nutritional value for soybeans. However, current checkoff-supported research is evaluating the impacts of a range of management practices on nutritional value and may discover techniques that deliver success on a consistent and profitable basis. Stay tuned in for research updates as progress is made in this arena.
Fortalis® is an essential crop input
Your soybean yields can also benefit from Fortalis®, an advanced crop enhancement foliar spray that works by mobilizing calcium already existing within plant tissues, resulting in higher pod retention. When applied as a tank mix, Fortalis® with a fungicide or insecticide contributes to better plant health and higher yield potential. It’s an essential crop input that you need to get the most out of your crop.
Dan Davidson is a PhD agronomist, part-time farmer and soybean expert from Nebraska who consults with soybean checkoff and industry on crop production, marketing, and product development projects.