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U.S. demand for non-GMO soybeans continues to grow
By MATTHEW D. ERNST
Missouri Correspondent

ST. LOUIS, Mo. — Domestic demand for non-GMO soybeans appears steady to rising, and some buyers said growers contemplating shifting corn acres to beans still have time to consider identity preserved (IP) non-GMO production for the U.S. market.

“The demand for non-GMO soybeans seems to be growing,” said LaVerne Klecker, general manager of grain procurement at SunOpta Foods, Hope, Minn. “Demand for food grade beans has picked up quite a bit over the last year,” he said. SunOpta is a major North American buyer of food grade organic and non-GMO soybeans to manufacture the company’s own brand and private label products such as soy milk.

Since the 1990s, conventional non-GMO soybean production in the U.S. has focused on production for export, especially to Japan. Scott Miller, specialty grains commercial manager at Cargill, Inc., said, “Higher prices/premiums and a struggling economy have put a ceiling on export demand, but our export customers are loyal and believe in the value of our non-GMO supply chain.”

But domestic demand seems to growing for both food and feed grade non-GMO beans, said some buyers. “We are seeing an increased demand for (non-GMO) soybean meal in the last six to nine months, and that appears to be driven by the poultry industry, both layers and broilers,” said Darwin Rader, sales manager at Zeeland Farm Services in Zeeland, Mich. 

Some feed demand for non-GMO beans is also coming from hog and dairy farmers, said buyers. Demand for non-GMO feed beans will be more price-sensitive. “Feed is only going to handle so much for a premium,” said SunOpta’s LaVerne Klecker. 

University reports and published figures from across the Farm World region indicate non-GMO soybean premiums to growers can range from $0.80 to $3 per bushel. Higher premiums are paid for food-grade soybeans based on characteristics like hilum color and protein content. For instance, Zeeland Farm Services in Michigan listed premiums last week of $1.50 premium per bushel for regular non-GMO soybeans and $1.75 for certain low linoleic varieties.
Non-GMO soybean buyers said that continual variety improvement is key to meeting domestic demand. In Ohio, where some 15 percent of soybean acres are planted in non-GMO varieties, the Ohio Agricultural Research and Development Center (OARDC) runs a non-GMO soybean breeding program. The program’s most recent release, ‘Summit,’ offers Ohio growers a high-yielding, mid group II bean.

“There’s a trade-off between protein content and soybean yield,” said Leah McHale, an assistant professor at The Ohio State University involved in the OARDC breeding program. “High protein levels are desirable for tofu-making, as the higher protein affects the texture of the tofu curd.” McHale said the non-GMO soybean breeding program run by the Ohio Agricultural Research and Development Center will soon release additional non-GMO lines focused on high yield and disease resistance.

Production costs for non-GMO beans are similar to GMO varieties, said regional buyers, especially as Midwestern growers adjust for glyphosate resistance. 

Planning for specialty crops can be more time-intensive, and additional management is required from non-GMO harvesters, said Tyler Uden, merchandiser at Clarkson Grain Company, Inc., in Cerro Gordo, Ill.

“Farmers have to make sure that bins, planters, auger wagons, semis and combines are cleaned out properly as they go from GMO to non-GM fields,” said Uden. “It’s not a difficult process, but it does need to happen to avoid contamination,” he said. Producers delivering non-GMO beans for export at terminals handling both GMO and non-GMO grain may have to deliver on certain days designated for non-GMO delivery.

Uden notes that keeping non-GMO grain conditioned can be important. Some non-GMO quality specifications will be more stringent than the typical local market. Paying attention to contracts for IP crops is also important, he said. “Some contracts are written by bushels and some are by acreage, which is important as both have perceived benefits and downsides,” he said.

So what about the availability of those contracts? Larger exporters usually write non-GMO program contracts the season prior to delivery. “We are in price discovery mode for the 2014-15 crop,” said Cargill’s Scott Miller. “We need the farmer’s input into the premiums needed to plant non-GMO products,” he said. Many larger soybean exporters take a similar approach for their non-GMO programs. 

But there is still time for growing non-GMO varieties for possible premiums from companies supplying domestic markets. Late last week, some regional companies were open to buying new crop non-GMO beans. “Our needs are mostly covered but we will still take on some additional production,” said Tyler Uden, of Clarkson Grain in Illinois.

Don Armstrong, at the Ohio Seed Improvement Assoc., said it is not too late for producers to acquire non-GMO seed. “People can contact any of the certified seed producers listed in our annual directory at www.ohseed.org for pricing and availability,” he said. He said Ohio-based companies handling contract production of non-GMO beans also likely still have seed available.

That was the case for at least one non-GMO buyer north of Ohio, in Zeeland, Mich., where growers still have plenty of time to get corn in the ground. “Corn growers here may be more influenced to switch over to beans because of input costs, like fertilizer,” said Dan Bailey, Seed Sales Manager at Zeeland Farm Services. Bailey is ready if growers in his region decide to try non-GMO soybeans instead of corn. “We have extra (non-GMO) soybean seed set aside right now for people that may switch,” he said.
5/9/2013