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Northern Growers Battle Premiums

August 9, 2012
By: Ed Clark, Top Producer Business and Issues Editor
p30 Northern Growers Battle Premiums chart
The greener the map, the lower the levels of crude protein, based on the 2006–2010 average. Interestingly, northern soybeans were higher in crude protein in 2011, due to the bizarre weather that year.  

Soybean research favors amino acid tests

In recent years, the golden, small grains that were once a defining feature of the Dakota prairies have been replaced with soybeans. Northern producers such as Scott Gauslow are part of soybeans’ renaissance there.

There’s a hitch in soybean pricing that farmers don’t like, however. "The crude protein deduction for our soybeans varies, but it’s high," says Gauslow, who farms in Colfax, N.D. He and other producers in the Upper Midwest are not happy about it and have turned their focus to changing the system. New research, which is ongoing, shows northern soybeans are actually higher in essential amino acids compared with soybeans grown farther south.

Big Protein Deduction. From 2004 to the present, North Dakota and western Minnesota growers were paid 41¢ per bushel less on average for their beans that go via rail to Pacific Northwest ports and on to Asia than growers farther south and east whose beans go via barge through the Gulf, says Bill Wilson, North Dakota State University economist. "It’s all due to lower crude protein deductions," he adds.

Producers in North Dakota, South Dakota and Minnesota, and their advocates, are out to prove that their beans are just as good when it comes to protein as those grown in the heart of the Corn Belt and Dixie. "We’re not trying to say our beans are better, but they are just as good as southern beans," Gauslow says.

Feeding trials show that northern beans are higher in essential amino acids than southern beans with more crude protein, and northern soybeans perform just as well in feeding research. The efforts of northern producers and soybean experts have created a bit of a firestorm in soybean country. The U.S. Soybean Export Council declined to comment on the protein content in different parts of the country, saying it represents all growers.

A key champion of north-ern beans is Seth Naeve, a University of Minnesota agrono-mist who has been studying the protein value of U.S. beans nationwide. His interest in the issue started about seven years ago, when Japanese buyers told him they only wanted to buy soybeans raised below I-80, which runs through central Iowa and the heart of the Corn Belt.

"The protein of northern beans is of high value," Naeve says. "The protein in our beans is enriched with lysine and other essential amino acids. The bottom line: Beans grown in the far north are not as bad as what buyers think. Northern beans are unfairly discounted."

Naeve is now turning his attention to studying the amino acid protein of soybeans grown in Brazil, Argentina and elsewhere, hoping to make the case that U.S. soybeans overall are higher in essential amino acids than South American beans.

To deliver a market pitch on the value of northern beans, Naeve, along with farmers and soybean officials from Minnesota, North Dakota and South Dakota, traveled to Asia in March to make their case to nutritionists and feed company CEOs in China, Thailand and the Philippines.

Artificial Substitute. In Gauslow’s view, the issue is really not a U.S. North versus South one, even though some have suggested it as such, but between U.S. beans and Indian companies, among others, who supply synthetic amino acids to feed companies in Asia. Research on northern beans shows that amino acid additives are not necessary, he says.

"Amino acids are more important than crude protein for livestock rations," says Keith Schrader, a corn and soybean producer in Nerstrand, Minn. "We’re not trying to get a premium for our beans, just to level the playing field," he adds. One crucial part of the mission to Asia was to have nutritionists in the room, since their recommendations filter back to what feed companies produce.

In Schrader’s view, the present test used to determine soybean protein levels is antiquated—it was developed in the 1800s. Newer technology, using NIR (near infrared) spectroscopy, measures amino acids, sugar and fiber in depth. Not all buyers have such a machine, but he thinks they should.

"Anytime you can measure something more accurately and use more relevant data, it makes sense to do so," says North Dakota’s Wilson.

The response among the Asian nutritionists the trade mission group met with was mostly positive, Schrader says. "If they [the nutritionists] can get the right amino acid profile from soybeans, they’d rather stop using synthetic amino acids," he adds.

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FEATURED IN: Top Producer - Summer 2012
RELATED TOPICS: Soybeans, Brazil, Research, Top Producer

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