Iowa Soybean Review, October 2018 by Iowa Soybean Association

Iowa Soybean Association, 1255 SW Prairie Trail Parkway, Ankeny, Iowa 50023

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President Lindsay Greiner, Keota | At Large President Elect Tim Bardole, Rippey | At Large Treasurer Robb Ewoldt, Blue Grass | D6

October 2018 | Vol. 31, No. 1

Secretary Dave Walton, Wilton | D6 Executive Committee Randy Miller, Lacona | D8 Board of Directors Brent Swart, Spencer | D1 Chuck White, Spencer | D1 April Hemmes, Hampton | D2 Casey Schlichting, Clear Lake | D2 Rick Juchems, Plainfield | D3 Suzanne Shirbroun, Farmersburg | D3 LaVerne Arndt, Sac City | D4 Jeff Frank, Auburn | D4 Rolland Schnell, Newton | D5 Morey Hill, Madrid | D5 Bill Shipley, Nodaway | D7 Jeff Jorgenson, Sidney | D7 Warren Bachman, Osceola | D8 Pat Swanson, Ottumwa | D9 Tom Adam, Harper | D9 Brent Renner, Klemme | At Large Stephanie Essick, Dickens | At Large American Soybean Association Board of Directors Morey Hill, Madrid Wayne Fredericks, Osage Brian Kemp, Sibley John Heisdorffer, Keota Dean Coleman, Humboldt United Soybean Board of Directors Delbert Christensen, Audubon Larry Marek, Riverside Tom Oswald, Cleghorn April Hemmes, Hampton Staff Credits Editor | Ann Clinton Communications Director | Aaron Putze, APR Senior Creative Manager | Ashton Boles Photographer | Joseph L. Murphy Staff Writer | Matthew Wilde Staff Writer | Carol Brown Staff Writer | Lauren Houska Staff Writer | Katie Johnson Sales Director | David Larson Iowa Soybean Review is published eight times a year by: Iowa Soybean Association 1255 SW Prairie Trail Parkway, Ankeny, Iowa 50023 (515) 251-8640 | iasoybeans.com E-mail: aclinton@iasoybeans.com For advertising information in the Iowa Soybean Review, please contact Larson Ent. LLC (515) 440-2810 or Dave@LarsonentLLC.com. Comments and statewide news articles should be sent to the above address. Advertising space reservations must be made by the first day of the month preceding publication. In consideration of the acceptance of the advertisement, the agency and the advertiser must, in respect of the contents of the advertisement, indemnify and save the publisher harmless against any expense arising from claims or actions against the publisher because of the publication of the content of the advertisement.

16 Just What the Doctor Ordered

USSEC implements prescriptive marketing plan to increase soy exports, consumption.

20 We're No. 1 for Now

Brazil will likely overtake the U.S. as the top soybean producer and improving transportation infrastructure will help move the crop more efficiently.

22 Demand in Europe

Economics drive U.S. soybean sales.

28 Integrating Water Management One Water

approach inspires regional action.

On the Cover: The days of China being a huge purchaser of U.S. soybeans are over ... at least for the foreseeable future. That truth has impacted Iowa's farmers financially but has not dimmed their vision for more diversified markets moving forward. Turn to page 16 to learn more about potential and emerging markets for soybeans.

OCTOBER 2018 | IASOYBEANS.COM | 3

Kirk Leeds Chief Executive Officer, Iowa Soybean Association kleeds@iasoybeans.com, Twitter@kirkleeds

“Houston, we have a problem”

his quote was made popular in the 1995 movie “Apollo 13” by Tom Hanks as he was portraying Mission Commander Jim Lovell from the actual mission in April 1970. Although not an exact quote of Cmdr. Lovell, the line has been used countless times to express concerns about a surprising or troubling event. This quote came to mind when I saw the chart below that shows the projected ending stocks for U.S. soybeans for the 2018/2019 marketing year. With projections approaching 850 million bushels in carry-over, we certainly have a problem.

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The reasons for this large carryover are clear: • We are wrapping up what most people expect will be a record U.S. soybean crop of 4.7 billion bushels and this follows very large U.S. crops in 2016 and 2017; • We have seen record production in Brazil the last two years, with an even larger crop projected in 2019. With some normal rainfall, Argentina also should produce a larger crop in 2019; • The trade dispute between the U.S. and China has caused a dramatic reduction in the shipments of U.S. soybeans to China. The chances of resolving these issues in the shortterm are not good. Given lower

soybean prices for U.S. soybeans and the willingness of Chinese buyers to pay a premium for Brazilian soybeans to avoid the 25 percent tariff on our soybeans, we have been able to sell more soybeans to other customers around the world. However, these increases will not replace all the lost sales to China. So, we know we have a problem, but what are we going to do to address the problem? This issue of the Iowa Soybean Review focuses on new and expanded efforts to sell more Iowa and U.S. soybeans to places outside of China. In the pages that follow, you will read about recent trade missions to Europe and Egypt. We also have a story about efforts by the U.S. Soybean Export Council (USSEC) to capture markets normally served by Brazilian soybean farmers and observations by USSEC CEO Jim Sutter. Just as important, the farmerdirectors of the Iowa Soybean Association will continue to partner with the American Soybean Association to impress upon President Donald Trump and the administration how damaging the ongoing trade war with China is to Iowa’s soybean farmers. Our message about the need for “trade, not aid” must be amplified until these issues are addressed. Farmers are patriotic and understand there are real issues in how China treats U.S. businesses and its lack of respect for intellectual property. However, I am not sure soybean farmers should be asked to shoulder this much of the load in pressing for these changes.

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Ed Anderson Senior Director of Research, Iowa Soybean Association eanderson@iasoybeans.com

Maintaining a big-picture view of soybean supply and demand

ow soybean prices, a trade war with China, and the need to develop new soybean markets for current surplus production are top of mind for Iowa’s soybean farmers. Even a research guy with little understanding of economics knows the importance of our reputation with China and other trade partners. Current low soybean prices and high carryout numbers are bad for soybean farmers and have short-and long-term ripple effects on the ag economy. At the Iowa Soybean Association (ISA), our farmer board members and staff care about the present and future success of Iowa’s soybean farmers and the health and vitality of the broader soybean and ag industries. We’re all in this together. Your ISA Research Team is dedicated to making sure our research and outreach projects and programs are aligned with broader organizational objectives to increase

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the productivity, profitability, sustainability and the competitiveness of Iowa’s soybean farmers. We align with other ISA-led efforts to maintain and build strong domestic and foreign markets. Examples include growing highyielding and high-quality soybeans through research, breeding and onfarm analyses of genetics, cropping systems, soil types and climatic conditions. We also provide onfarm and conservation data and technical information about soil health, nutrient management and water quality. This information drives sustainability and informs decisionmakers for the most meaningful policy and regulation to ensure a safe and healthy environment and food supply while maintaining farmers’ freedom to operate. Innovating and applying precision and digital agriculture tools to help farmers with predictive models

also enables farmers to improve their operations. Finally, we seek to identify and develop new uses for soybeans and soybean products to meet today’s demand and new opportunities in emerging or niche markets. Like Iowa’s soybean farmers, our research team knows the short-term challenges and issues we face are real and require our attention. At the same time, we will work with our farmer leaders and all soybean farmers to maintain a big-picture and long-term view of the soybean industry, which includes a sustained commitment to basic and applied research to create more demand for the highest yielding, highest quality, safest and most reliable supply of soybeans. We applaud farmers’ vision and commitment to more than 50 years of investment in soybean research, and we commit to making good use of your continued investment.

PROFITABILITY PRIORITIES Soybean leaders talk trade, transportation and sustainability

he Iowa Soybean Association’s (ISA) capped off a tour of nine district meetings this summer with the Farmer Forum and District 1 meeting. Soybean leaders answered questions from ISA members about the future of the soybean industry Sept. 13 at the Clay County Fair.

Q: What long-term factors do you consider when making decisions about where to invest resources?

“

The future is not about growing a whole lot more beans that someone else can grow the same or similarly. We have to think about where we can capture value because just growing beans can happen anywhere in the world. “Farmers are not alone on the food chain — we’re part of a much bigger system and we have to think about that. We can’t fund projects that don’t deliver something of value to multiple points on that chain. When we are thinking about how we can better sell our products, we have to ask ourselves: Can I do things on my farm a little differently, be a little more sustainable or tell a better story about the way I farm?

”

“

— Tom Oswald

Farmer leaders from the majority of soybeangrowing states got together to talk about this at the Five Billion Bushels Soybean Forum in Chicago. What are we going to do with a 5-billion-bushel soybean crop in the future? We’re not far off from that. “I think we are at a place where our state and national boards are working together better than ever, but we really need to start thinking out of the box. Consumer demand is going to be changing. What millennials want is going to be different than consumers in the past. “Another topic that came up repeatedly as a priority was our transportation system. Improvements are needed and we can’t fall behind other countries and lose that competitive edge.

”

— Stephanie Essick ISA Treasurer, Exec. Committee At Large and Dickens soybean farmer

Untied Soybean Board Director and Cleghorn soybean farmer

“

Farmers will harvest a 4.7 billion-bushel soybean crop this year, so talking about 5 billion bushels now isn’t all that visionary. It comes down to the question: How do we take the limited amount of resources we have some influence over to profitably sell soybeans? While we’re working diligently to develop new and existing markets, ultimately, we have to fix the trade relationship with China.

”

— Kirk Leeds,

ISA CEO

Iowa soybean farmers elected to state, national leadership posts By Katie Johnson

owa soybean farmers were elected to state and national leadership positions at the September meeting of the Iowa Soybean Association (ISA) board of directors. Those tapped to serve as ISA officers were: Tim Bardole, Rippey – president-elect; Robb Ewoldt, Davenport – treasurer; Dave Walton, Wilton – secretary; and Randy Miller, Lacona – executive committee. Lindsay Greiner of Keota accepted the gavel as president and welcomed the newly elected state soybean leaders to their key posts. ISA directors also re-elected Wayne Fredericks of Osage and Dean Coleman of Humboldt as directors of the American Soybean Association.

your

“These are challenging times for the industry, but farmers are resilient,” Greiner said. “The long-term outlook for domestic and global soybean consumption remains positive. “I look forward to working with

our executive committee and all directors to represent the needs of farmers and our industry while effectively managing the hard-earned investment farmers make courtesy of the soybean checkoff.”

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W E A R E U. S. S O Y B E A N F A R M E R S

SUSTAINABILITY NEVER GOES OUT OF SEASON C U S T O M E R S P R E F E R U . S . S O Y B E C A U S E I T ’ S S U S TA I N A B L E . But as demands for sustainability continue rising, meeting those demands remains a journey of continuous improvement. Which sustainable practices do you do now? Which ones could you adopt to improve your sustainable footprint? Show your commitment to sustainability with a free truck magnet available at unitedsoybean.org/sustainability

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CULTIVATING CONSUMER CONFIDENCE An Iowa farmer walks into a California coffee shop…

hat might seem like the opening line of a joke is merely a description of how one soybean farmer and her husband spent a few mornings during their San Francisco vacation — striking up conversations with Starbucks customers. Pat Swanson, an Iowa Soybean Association (ISA) director and sixthgeneration soybean farmer from Ottumwa, has always been passionate about bridging the gap between farmers and consumers. She believes it is important for all farmers to tell their story to combat misinformation and foster consumer trust, especially at a time when every consumer counts. “We understand consumers are getting further and further away from being raised on farms,” Swanson says. “Once they find out you’re a farmer, they have lots of questions.”

Swanson and her husband Don also strike up conversations in grocery stores to help shoppers overcome confusion about various food labels and claims. “When I talk to consumers, I let them know I am a mom too,” says Swanson, explaining how she finds common ground. Before Swanson was an ISA director, she was one of the first Iowa Food & Family Project ambassadors. She enjoys talking to consumers about where their food comes from and what farmers are doing to keep it safe and affordable. Their family has been farming for more than 150 years, a fact she loves to share. She explains how, in order to pass on the farm to another six generations, it is extremely important for their family to protect the land and water.

Pat Swanson, farmer from Ottumwa

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One of the most important things she wants consumers to understand is how much science, technology and effort farmers put into sustainably raising soybeans. “We try to take all the science we know and do the best we can with it,” says Swanson. Pat and Don embrace GPS and other precision ag technologies to help them use less chemicals and improve water quality. But she recognizes that, as much as farmers want it to, science doesn’t always win the day — emotion plays a big part. “A lot of farms are family farms,” says Swanson. “I think what really connects with them is talking about what we’re doing to take care of our family — just like we want to take care of theirs.”

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THE LEADER BOARD Time for a U.S. soy industry rally as world competitors step up their game By Aaron Putze, APR

merica’s leadership as the world’s most reliable producer and seller of high-quality soybeans is stymied by political turmoil and under siege by savvy competitors. Without a rally, America’s soybean farmers risk becoming a residual supplier of the world’s most popular oilseed. This call to action by industry strategists and business futurists struck a chord with the more than 70 state and national soybean farmer leaders and staff gathered earlier this fall in Chicago for a Five Billion Bushels Soybean Forum. “The headline for me is that we’ll soon be the world’s second-largest soybean producer,” said Iowa Soybean Association (ISA) director Tim Bardole. It’s a new reality that U.S. farmers must plan for, the farmer from Rippey added, given significant production gains made by South America that will

soon enable it to supplant America as the world’s most prolific soybean supplier. “It raises a host of new challenges and consequences that must be taken seriously, and the sooner the better.” Forum attendees – including 11 ISA representatives – identified, discussed and prioritized challenges and opportunities that come with producing a larger domestic soybean crop. This input is being shared with state and national soybean organizations for further discussion, prioritization and action. The industry introspection is well timed. The U.S. Department of Agriculture estimates that U.S. soybean farmers will harvest a record 4.7 billion bushels with a carryout of more than 800 million. Oilseed analyst Thomas Mielke, one of three industry experts presenting at the forum, is bullish on the long-term

global growth in soybean demand. Drivers include population increases and economic gains in many developing countries. But his enthusiasm is tempered by the ongoing U.S.China trade dispute, production and infrastructure improvements in South America and buyer concerns about the quality of U.S. soybeans. Mielke, who serves as executive director of the German-based, oilseed research company ISTA, said U.S. soybeans are exported and sold at discounts of $10-50 per ton compared to those sourced from Brazil. Much of the price reduction – and lost income potential for U.S. farmers – was due to elevated amounts of foreign material found in soybeans originating from the U.S. including weed seed, corn and sand. The limitation for U.S. No. 2 soybeans is two percent while foreign competitors allow for 1 percent. [ Continued on page 14 ]

Tim Bardole, ISA board director

OCTOBER OCTOBER 2018 2018 || IASOYBEANS.COM | 13

[ Continued from page 13 ]

“I can't understand why the U.S. has not changed its export standards of two percent mixed rate with no oil or protein guarantee,” Mielke said. “America could do that 20 years ago because you were at the top. You cannot do that today because your product is inferior. “If the market gives you a discount, and if the market is right, then there’s something wrong with U.S. soybeans,” he added. “This is very serious. You are doing a poor job. You should reduce this discount. Make sure your soybeans are regarded as the same quality as others. Then you can move forward. If you do this, you would gain at today’s price $5 billion. That’s quite good.” Mielke urged soybean industry leaders to insist that if a higher price is wanted, a higher quality soybean must be produced for export. The industry must also demand maximum admixture levels be reduced, guarantee oil and protein content and reward farmers who grow better and more valuable soybeans sustainably.” Dr. James Fry, chairman of LMC International, agreed that focusing on

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soybean quality should not happen absent of improving air, soil and water quality. Environmental pressures on agriculture have increased considerably in recent years and that’s not about to change, he said. Palm oil output has been most affected by the move toward greater sustainability as trees age. Replacing them is increasingly expensive and difficult and can take 5-8 years. Lost time is lost revenue. Add to that pressure from non-government organizations – or NGOs – about sustainability and you have slowing growth in palm-producing areas. “Palm will not be able to keep up with world oil demand growth after the new trees reach maturity in the early 2020s,” Fry predicted. This has important implications for other oil crops, he said. As the growth of palm oil production begins to wane, demand for other oilseeds will grow, presenting an opportunity for soy. “World demand for vegetable oils has grown faster than demand for meal for the past 20 years, thanks to the surge

in biodiesel consumption,” Fry said. “Is this likely to continue? How should local producers respond? These are the questions you should be asking.” This also brings back to the fore the challenge of developing high oil beans without sacrificing meal quality and content. “This should probably be moved back up the list of research priorities in soybean breeding,” said Fry. A focus on research and the ability to differentiate between being competitive vs. efficient is critical if the U.S. soybean industry is to regain its foothold, added Kevin Van Trump, the last of three keynote speakers. The CEO of Farm Direction didn’t mix words. “Being efficient can lead to being bankrupt,” Van Trump said. “When the market deems you’re oversupplied as a commoditized business, it will seek, find and destroy the highest-cost producer. “Focus instead on being competitive.” Aaron Putze can be contacted at aputze@iasoybeans.com.

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CREATING A FUTURE WORTH GROWING

From the first sale of U.S. soy to China to the release of the first soybean oil-based tire, the soy checkoff has been behind the scenes, growing new opportunities and customers for the soybeans you produce. We’re looking inside the bean, beyond the bushel and around the world to keep preference for U.S. soy strong. And for U.S. soybean farmers like you, the impact is invaluable. See more ways the soy checkoff brings value to farmers at unitedsoybean.org

OCTOBER 2018 | IASOYBEANS.COM | 15

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JUST WHAT THE DOCTOR ORDERED USSEC implements prescriptive marketing plan to increase soy exports, consumption By Matthew Wilde

oybean farmers are hurting due to Chinese tariffs. Industry leaders hope they have a cure, or at the very least, a remedy to help mitigate the pain. A $12-billion market evaporated when China slapped a 25 percent duty on U.S. soybeans in July. Prices plummeted more than $2 per bushel as the trade war between the two nations simmered and eventually boiled over. Much of the loss could eventually be made up if a new multiyear marketing strategy implemented recently by the U.S. Soybean Export Council (USSEC) and industry partners works as planned. The initiative prioritizes markets, identifies impactful programs and targets soybean checkoff expenditures to increase demand and preference for U.S. soy worldwide. An emphasis of the strategy is to increase soybean consumption in countries where its low, but growth opportunities abound. By closing existing gaps in per capita consumption by 50 percent, increased sales would provide an additional $10 billion of annual revenue for soybean farmers, according to research funded by the United Soybean Board (USB). “We’ve developed strategies or prescriptions for what we’re going to do in each of the priority markets,” says Jim Sutter, USSEC CEO. “The initiative wasn’t tariff driven, but I think it can help reduce losses from the trade war.

“For anyone who said, ‘Why care about other markets, just focus on China,’ this is a stark reminder of what we’ve been talking about for some time and the need to diversify from one huge market,” he adds. “It was hard to do when China was buying. Now we’re forced to.” China purchased nearly 1.4 billion bushels of U.S. soybeans during the 2016-17 marketing year, accounting for more than 60 percent of U.S. exports, government data shows. The country bought a little more than 1 billion bushels, or less than 50 percent of total U.S. exports, in the 2017-18 marketing year that ended Aug. 31. It’s unclear how much the world’s largest soybean consumer will buy, if any, of this year’s record crop estimated at nearly 4.7 billion bushels. Some analysts, like John Baize, believe China will purchase 294 million to 394 million bushels of U.S. soybeans during the 2018-19 marketing year despite tariffs adding about $85 per metric ton to the cost. USSEC officials who work with buyers in-country believe 220 million bushels might be it. Others predict China will buy less than 100 million bushels of U.S. beans. In an exclusive interview with the Iowa Soybean Review, a representative of the Yihai Kerry Group, one of China’s largest

private soybean crushers, says his company won’t buy from the U.S. if the trade war continues. “If we keep buying from the U.S. no matter what the tariff will be, we may have political risks and be attacked by consumers,” says Mu Yan Kui, vice chairman of the company, through an interpreter. The USDA projects 2018-19 soybean exports at a little over 2 billion bushels. With China on the sidelines, farmers understand sales to other countries will have to substantially increase to make up the difference. The strategy, commissioned by USB and developed in cooperation with USSEC by the firm Context, will help.

Jim Sutter, USSEC CEO

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INVESTING CHECKOFF DOLLARS

NETHERLANDS 1.939

GERMANY 0.909

9 PAKISTAN | 1.058

1 2 MEXICO 3.193

CHINA 27.281

5 JAPAN 1.781

6 EGYPT 1.714

TAIWAN | 1.351

8 THAILAND 1.187

4 INDONESIA 1.824

Top 10 U.S. Whole Soybean Export Partners In Million Metric Tons - Marketing Year Sept. 1, 2017 - Aug. 31, 2018 (As of June 14, 2018) Source: USDA

“It’s about thinking outside the box to establish new markets and relationships,” says Larry Marek, a USB member and Riverside farmer. “There’s an emphasis on doing everything and anything we can to use or move more U.S. soybeans. Perhaps we can open new markets and opportunities by investing more in Southeast Asia, India and Africa. “I expect this effort to help U.S. soybean farmers,” he continues. “But it’s a long-term effort. Developing relationships takes time and patience.” The strategy’s market opportunity assessment scored 232 soybean markets. Ninety market interviews provided insights into needs and opportunities. Thirty-nine priority markets were identified. Countries were slotted in four market categories: • Immature (no priority markets) — Few, if any, U.S. soybeans purchased in the past. Examples: Ethiopia, Liberia. • Basic or open (14) — Per capita soybean consumption is low, but potential to increase is good due to growing populations and economic activity. Examples: Pakistan, India, Bangladesh.

• Expansion or grow (14) — Markets have expanded rapidly with room to grow. Examples: China and Mexico. • Mature or maintain (11) — Important markets, with limited growth potential, which don’t need much attention. Examples: European Union, Canada, Japan. With input from industry stakeholders, the strategy identifies impactful activities to be carried out in priority markets. It also shows how the soy industry can conduct promotional and marketing work in four focus areas — animal, aquaculture, human and sustainability. “In mature, expansion and basic markets, we need to do different things,” Sutter says. The strategy for basic markets is to introduce world-class technology, like boosting crushing capacity in Pakistan. In expansion markets, the industry works to create a preference for U.S. soy. For mature markets like Europe, work focuses on sustainability and policy issues such as biotechnology to reduce trade barriers. “I’m optimistic that by having a detailed approach and using prescriptive activities in each country, we can best utilize the limited resources we have,”

Sutter says. “We think we’ll get more bang for our buck focusing on expansion and basic markets.” USB, which helps fund USSEC, spent $27 million on international marketing programs this year. Thirteen percent was spent in basic markets. By 2021, the goal is 40 percent. Soybean demand is rapidly growing in countries like Pakistan, Bangladesh and Sri Lanka. Opportunities are outpacing infrastructure in some cases, according to USSEC experts. “We’re taking an aggressive position in these markets to increase consumption and (solve) capacity issues,” says Ed Beaman, USSEC regional director for the Asian subcontinent. “There’s a tremendous amount of soybeanequivalent gaps to be filled.” A goal of the strategy is for the U.S. to fulfill half of the gap in potential per capita soybean consumption, which equates to .6 bushel in a basic market, .5 bushel in an expansion market and .2 bushel in China. There’s no way to completely replace China, but Sutter hopes the U.S. can “come close” as the marketing initiative is implemented. Matthew Wilde can be contacted at mwilde@iasoybeans.com. OCTOBER 2018 | IASOYBEANS.COM | 17

INVESTING CHECKOFF DOLLARS

CREDIT CONCERNS Discipline, communication can help farmers through tight financial times By Lauren Houska

redit conditions at the Federal Reserve’s Seventh District agricultural banks continued to deteriorate in the first half of 2018. Amid low commodity prices due to trade disputes and an already declining farm economy, industry experts say farmers need to be disciplined in their marketing plans and continue to communicate with their ag lenders to help see themselves through the next marketing year. “Tariffs have definitely been a challenge to farm customers trying to market their 2018 crop and in some instances carryover 2017 crop,” says Michelle Klocke, president of Hawarden Peoples Bank. According to the Federal Reserve Bank of Chicago: • Repayment rates for non-real-estate farm loans were lower in the second quarter of 2018 compared with the second quarter of 2017. • Repayment rates have been deteriorating for 19 consecutive quarters. • Fewer funds were available in the second quarter of 2018 compared to a year ago. • Credit tightening was evident in the

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second quarter of 2018, with banks requiring larger amounts of collateral than a year ago. • In the first half of 2018, the amount of farm operating loans issued was higher than historically normal. • In the first half of 2018, the amount of agricultural real estate loans issued was lower than normal. “It is typical for farm operating loans to be at peak during the third and fourth quarters of the year,” says Klocke, who also serves as the current Ag Committee Chair for the Iowa Bankers Association. “Most expenses have been incurred and prior to harvest, there is limited cash flow to paydown operating.” She believes outstanding loan balances to farm customers are higher this year mainly due to less liquidity in operations that didn’t allow producers excess cash to pay ahead on loans or pay down operating lines as fast. However, due to the volatility of grain prices, especially soybeans, early marketing of this year’s crop is paying off, says Klocke. She is curious how much of the current crop has been priceprotected through pre-harvest sales or the use of futures hedges or put options. Steve Johnson, Iowa State

University Extension and Outreach farm management specialist, urges farmers to be disciplined and annually implement a pre-harvest crop marketing plan tied to the farm’s cost of production and cash flow needs. “Leveraging revenue protection crop insurance when futures prices are above the established spring or projected price has worked well the past six years,” he says. “A post-harvest market plan will likely have a much lower futures price objective than last spring and farmers should anticipate a wider soybean basis do to trade uncertainty.” A bright spot for farmers, farmland values for the Seventh District edged up 1 percent from a year earlier. “Farmers with a great deal of equity in farmland will have a better ability to borrow funds from ag lenders,” Johnson says. “Even a farmer that has burned through a great deal of working capital in recent years could still pledge additional farmland collateral.” He says stable farmland values and five years of above average crop yields have slowed the decline in cash rental rates in Iowa. That’s because there’s both a limited supply of farmland for sale and land to rent. Demand exceeds supply and

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capital flows toward the land. “Over the past five years, cash rental rates reflect about 3 percent of the value of the farmland,” Johnson says. “Farmland lenders will term this percent as the capitalization rate and it is expected to remain stable for 2019.” Seventh District bankers also emphasized their concerns — and those of farmers — about the negative impacts to the agricultural sector from recent changes in trade policy. “It is tough for farmers to deal with the trade uncertainty,” Johnson acknowledges. “Many of these issues arose this year from a lack of the U.S. addressing these issues in recent decades as previous administrations chose not to deal with trade imbalances and intellectual property theft.” The new Market Facilitation Program provided through local USDA Farm Service Agency offices will provide potentially $1.65 per bushel for soybeans this fall. This will help overcome a portion of the decline in soybean market prices. However, soybean basis will remain extremely wide due to the lack of exports. Volatility in the markets and varying predictions for crop yields make it difficult to be certain what the last half of 2018 will look like, says Klocke. “If we have another record crop, the bushels will help gross income per acre and we may yield our way out of some trouble,” she says. “But with current soybean prices, a significant number of acres may not cash flow which can weaken repayment ability to farm loans.” Both experts stressed that demonstrating a marketing plan and communicating with ag lenders is always important, especially now. Reviewing cash flows and making

President of People's Bank in Hawarden and Iowa Bankers Association Ag Committee Chair Michelle Klocke says farmers can help themselves through financial issues by planning ahead and communicating with their ag lenders.

accurate projections for the coming year is just as important as completing a financial statement, Klocke says. The financial statement tells farmers where they are at today, while cash flow projections help guide them to where they need to be. “Circumstances can change from what you may have projected to what happens,” Klocke says. “But it is still crucial to put your farm and marketing plans together with your production and financial information and to surround yourself with a good team. These team members likely include your banker, grain market advisor, agronomist, seed specialist, accountant or others.” Johnson says farmers who practice good communication skills and focus on positive relationship management with lenders, landowners and other

industry experts have a much better chance to get the assistance they need. Conversely, farmers who procrastinate in addressing cash flow needs and existing credit obligations run a risk of being cut off credit. He says taking responsibility for the operation without placing blame will be a critical test for farmers come time for farm loan renewals. “The biggest thing producers can do to help themselves is to keep communicating with their ag lender,” Klocke explains. “As obstacles in repayment come up, identifying that with your banker early will help with establishing a plan for your farming operation that is most viable for continuity.” Lauren Houska can be contacted at lhouska@iasoybeans.com.

OCTOBER 2018 | IASOYBEANS.COM | 19

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WE'RE NO. 1 FOR NOW

Brazil will likely overtake the U.S. as the top soybean producer and improving transportation infrastructure will help move the crop more efficiently By Matthew Wilde

he U.S.' reign as the world’s soybean king is about to end. “That ship has sailed … it’s inevitable,” says John Baize, an international oilseed analyst and Iowa Soybean Association (ISA) consultant from Falls Church, Virginia. The U.S. will likely hang on to the production crown for another year or two, Baize and other industry officials contend. But that will change as Brazil increases soybean acres to meet worldwide demand, particularly from China. The nation is shunning U.S. soy as a trade war rages between the two countries. U.S. farmers will harvest nearly 4.7 billion bushels of soybeans from 88.9 million acres this year, according to the September U.S. Department of Agriculture (USDA) Crop Production Report. Iowa’s output is pegged at 590.4 million bushels from 9.84 million acres.

Brazilian farmers are projected to increase soy plantings — which started in September — by 3.2 percent to nearly 89.7 million acres, according to a Reuters poll of analysts. Production is forecast at nearly 4.4 billion bushels. Soybean acres in Brazil’s main producing state of Mato Grosso are expected to jump by 18 million by 2025, according to information provided at the International Oilseed Producers Dialogue, which was held earlier this year in the country. If China’s 25 percent tariff on U.S. soybean imports persists, that timetable will likely be pushed up along with increases nationwide. “It’s clearly a sign to grow production and overtake the U.S. as the largest soybean producer and supplier in the world,” says Jim Sutter, U.S. Soybean Export Council (USSEC) CEO. While noteworthy, neither Sutter nor Baize believes that is major concern

for the U.S. Both say it was bound to eventually happen. “Soybean demand is growing worldwide by about 15 million metric tons (more than 551 million bushels) annually and Brazil has land to expand and we don’t,” Baize contends. “Brazil has its export season and we have ours.”

Alarming trend In the fourth quarter of 2017, USDA data shows it cost $82.09 and $94.05 to ship a metric ton of soybeans from Davenport, Iowa and Sioux Falls, South Dakota, respectively, to Shanghai. It cost $115.01 from North Mato Grosso to Shanghai. The main concern for the U.S. soy industry is Brazil’s capital improvements to reduce shipping costs and surpass the U.S. in that area, according to Baize and Sutter. Foreign capital, particularly from

John Heisdorffer, ASA President

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to the USDA. Baize expects the tariff will reduce that number by more than half or possibly by two-thirds this marketing year. Brazil will pick up most of the slack. To mitigate the loss, USSEC is working to boost sales to other nations. It’s promoting that high-quality U.S. soy is on sale. August soybean bids were about $60 per metric ton (about $1.65 per bushel) cheaper than Brazilian soybeans, which were selling at a premium price due to Chinese demand. “For markets that have historically purchased from multiple origins, they really should be buying the vast majority from us now,” Sutter says. “It’s like buying a Cadillac at a big discount.” Farmers need to continue to pressure the Trump administration and Congress Brazil is slowly improving transportation infrastructure to get soybeans to market efficiently. to invest in transportation infrastructure, says Soy Transportation Coalition (STC) Executive Director Mike Steenhoek. Farm-to-market roads, rail, bridges, While significant challenges still exist China, is pouring into Brazil to help inland waterways and ports are all vital in Brazil to efficiently move crops — an the nation improve its transportation to the future of agriculture. over dependence on trucks, only infrastructure so it can export soybeans Brazil doesn’t need infrastructure more efficiently, experts say. China invested 12 percent of federal, state and local $20.9 billion in Brazil in 2017, according to roads are paved, and many are filled with parity to thrive, Steenhoek adds, just continual improvement. And that’s a Reuters report. Agriculture, logistics and potholes, trucker strikes and far-less use happening. energy commanded most of the cash. of barge and rail than the U.S. — he says “This is a golden opportunity to “We’ve always had significant advantage U.S. farmers shouldn’t believe it will express to policymakers that if they want due to their poor infrastructure, but always be that way. to help agriculture, infrastructure can investments are helping them narrow the “If we don’t improve our roads, bridges help moderate negative consequences gap,” Sutter says. and locks and dams, pretty soon we’ll be of tariffs and help the U.S. retain its American Soybean Association President at a disadvantage,” Heidsorffer says. “And, competitive advantage in shipping soy,” John Heisdorffer has witnessed Brazil’s Brazil has a low-interest loan program for Steenhoek says. infrastructure transformation firsthand. smaller farmers to construct bins. A recent STC The Keota farmer visited the country 15 “That’s why study proved how years ago with fellow ISA farmer-leaders I think they can deepening the lower and staff to learn about the U.S.’ rising become a producer Mississippi River by soybean competitor. He says the roads to take care of 5 feet would increase were awful, there were only a handful of customers yearsoybean revenues in ports and grain terminals to load ships and round. Many people 31 evaluated states on-farm grain bins were rare forcing many don’t think that now, by $461 million. If farmers to sell soybeans right out of the but in the future they Mike Steenhoek, the pending dredging fields. can,” he continues. STC executive director project occurs, larger Heisdorffer saw a different Brazil while “That’s concerning.” ships capable of attending the latest International Oilseed In 2013, University of Illinois carrying 400,000 to 500,000 more bushels Producers Dialogue. He noted: Agriculture Economist Peter could navigate the shipping channel. • New highways and more maintenance Goldsmith estimated soybean storage That would cut transportation costs for on existing ones. was 34 percent under capacity in Mato buyers and make the commodity more • Inland waterways and barges being Grosso, which was aggravated by desirable and valuable. used more to ship grain. increasing production of both soy and ISA supports the project, initially • About a dozen ports with multiple second-crop corn. estimated at $200 million. ship-loading facilities. “It’s something tangible than can • A railway project under construction to Time to act be done to benefit farmers and the China, the world’s largest soybean move grain to the West Coast of South economy,” Steenhoek adds. America. buyer, imported a little more than • Grain bins and legs more common on farms.

1 billion bushels of soybeans from the U.S. the last marketing year, according

Matthew Wilde can be contacted at mwilde@iasoybeans.com. OCTOBER 2018 | IASOYBEANS.COM | 21

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DEMAND IN

EUROPE Economics drive U.S. soybean sales By Matthew Wilde

he U.S. has an opportunity to significantly increase soybean market share in the European Union (EU) but significant challenges exist. Ten Iowa Soybean Association (ISA) board members and Market Development Director Grant Kimberley participated in a two-week EU Learning Opportunities Mission in late July. The group met with government officials, soybean buyers, industry stakeholders and farmers to learn about food needs, build relationships and highlight U.S. sustainability practices. ISA leaders say conditions are ripe for the U.S. to sell more soybeans and soybean meal in the continent. “We didn’t hear specifics, but they (EU officials) did talk about increasing imports from the United States,” says ISA past President Bill Shipley of Nodaway. “We were well received.” Stops included Ireland, the U.K., Denmark, Hungary and Austria.

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An oilseed analyst for Rabobank International predicts the U.S. will likely supplant Brazil as the EU’s No. 1 soy provider. Early indicators are promising. The E.U. released soy import data for July on Aug. 1. U.S. sales to date compared to July 2017 are as follows: • Whole soybeans increased 283 percent to 360,000 metric tons (13.2 million bushels). • U.S. soybean market share in the EU is at 37 percent, up from 9 percent. • Soybean meal is on the rise — 185,000 metric tons were imported in July, a 3,337 percent increase. • The U.S. is now supplying 13 percent of EU soybean meal imports, up from .3 percent. “The European Union can import more soybeans from the U.S. and this is happening,” says EU President Jean-Claude Juncker in a statement. “This is a winwin situation for European and American citizens.”

An EU-U.S. joint statement says they will work together to increase trade, including soybeans and remove tariffs and non-tariff barriers for mutual benefit. While the agreement is good, ISA’s EU delegation says economics are the reason for the recent, and likely future, increase in U.S. soy exports to the 28-nation trading bloc. U.S. soybeans are more affordable due to the U.S.China trade dispute. “We know it’s simply the result of market forces at work,” says Benno van der Laan, an ISA and U.S. Soybean Export Council (USSEC) consultant who accompanied the ISA contingent. Kimberley adds, “It’s always a good thing to see the EU and the U.S. work together on trade. Even though economic factors (are the driving force), there’s a conscious effort to grow soy imports.”

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U.S.-China trade dispute drives EU soy purchases China slapped a 25 percent tariff of U.S. soybeans on July 6. The move was in response to $34 billion in U.S. duties meant to stop the country’s unfair trade practices, namely intellectual property theft and forced technology transfer as a condition of doing business in the country. The soybean levy is now 28 percent, plus a 10 percent value-added tax. As a result, China is gobbling up all the soybeans it can from South America, primarily Brazil. Premiums for Brazilian beans are up, and U.S. soybean prices have plummeted. Reports indicate U.S. soy was $20 per metric ton cheaper than Brazil in late July for August delivery into northern Europe. The affordability and high quality of U.S. soy has opened the door for additional exports to Europe, Kimberley says. A recent drought in Argentina, the world’s largest soybean meal exporter, and northern Europe may keep it open for a while. “For many factors, Europeans are purchasing more U.S. soybeans,” Kimberley continues. “There’s lots of opportunities to capture more market share in the region.”

The Danube River in Hungary is a vital transportation artory for commodities, including soybeans.

“They sourced South American beans in the past and now it makes economic sense to buy from the United States,” says Dave Walton, an ISA board member from Wilton. “The sense we got is trade is always open.” However, challenges do exist. The EU, while it buys genetically modified soybeans, doesn’t embrace the technology. Some countries accept science and proven safety record of biotech crops EU opportunity and others don’t. The regulatory approval The EU is projected to be the world’s process for biotech events is cumbersome second largest soybean buyer in the and slow. 2017-18 marketing year, which ended A European Court of Justice's ruling Aug. 31, at more than 514 million that gene editing should be subject to the bushels. Imports are expected to increase same rules as those governing genetically more than 3.6 million bushels this year, modified organisms is a new issue. according to the U.S. Department of Still, ISA leaders are upbeat that Agriculture. additional European soy purchases can The government projects the EU will mitigate export losses to China. Buyers in be the largest soybean meal importer Hungary made inquiries about purchasing at 19.4 million metric tons, which U.S. soy during meetings with ISA. equates to nearly 900 million bushels Information was provided to USSEC to of soybeans, during the past marketing connect buyers and sellers. year. Almost all of it came from Brazil “The bottom line is there are and Argentina. Meal imports are opportunities here despite the challenges,” expected to remain steady. Kimberley says. “Our industry is well U.S. market share currently stands positioned to address them.” at a little more than 26 percent for Matthew Wilde can be contacted at soybeans and 1.6 percent for meal, mwilde@iasoybeans.com. USSEC data indicates. Left: Iowa Soybean Association board members, staff and consultants meet with agriculture officials in Northern Ireland during a European Union learning opportunities mission in late July.

Top: Iowa soybean farmers check out an organic soybean field in Austria. Bottom: A feedmill warehouse in Ireland, which supplies area livestock farmers. Photo credit: submitted OCTOBER 2018 | IASOYBEANS.COM | 23

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ISA LEADERS EXPLORE

EGYPTIAN MARKETS By Joseph L. Murphy With U.S. soybean exports forecast by the U.S. Department of Agriculture are to be down by 250 million bushels this year, many farmers are looking for new markets that can lessen the sting of the trade war with China. Karey Claghorn, chief operating officer of the Iowa Soybean Association (ISA), and Lindsay Greiner ISA presidentelect, recently traveled to Egypt to explore how the country is using in-pond aquaculture system technology and learn about market possibilities for U.S. soybeans. Claghorn shared information about the trade mission and what it will mean for Iowa soybean farmers.

How did the trade mission come about and what key points were discussed? “One of the big interests in exploring this market was the fact ISA farmer leaders determined they were going to fund a worldwide aquaculture program through the U.S. Soybean Export Council (USSEC). The program introduces technology for the in-pond 24 | OCTOBER 2018 | IASOYBEANS.COM

raceway systems — originally funded for demonstrations in China — to the rest of the world. Egypt was one of those focuses. “China and East Asia have been a focus for years, but I think North Africa is a part of the world that we need to begin learning more about. Their customs, their dietary habits and what’s driving demand are of interest to help us better understand the market. “There are 100 million people living in Egypt. The people are tied to Old World traditions that date back 5,000 years. Seafood and aquaculture are a part of that tradition and the Nile River is the lifeblood of that country. “Tilapia is the No. 1 species of fish produced there. They rank No. 8 in the world in fish production and typically No. 2 in tilapia production. They produce 1.87 mmt of fish currently and they expect to produce 2.2 mmt in the

near future. Up to now, the fish have been raised in traditional farm ponds but the government is investing in in-pond aquaculture and Karey other technologies to Claghorn improve growth rates, nutrition and water quality. The in-pond raceway technology is really important to the area.”

How does a mission like this help the Iowa soybean farmer? “We’ve got to expand markets and continue to look at other parts of the world that we haven’t really paid a lot of attention to in the past. There are good things happening, so it is important for farmer leaders and staff to attend the missions to learn more about these markets. The information is important to help inform the rest of the board when they are making decisions on where to invest farmer dollars to help expand markets.

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“With the trade disputes that are going on around the world, this was kind of eye opening for me. As Americans, we hear a lot in the news about the Middle East. In your mind you have a picture of constant turmoil, war and disputes. But it was surprising to see the patriotism and confidence that good things are coming. The positive outlook for the future, even from attendees from countries like Iraq, was interesting. Egypt is a young country when it comes to the average age. Seventyfive percent of Egyptians are under the age of 25. Only 3 percent are over the age of 65. It is one of the youngest populations in the world.”

How does Egypt fit into the larger picture when it comes to creating demand for U.S. soybeans? “USSEC is an incredible organization with local ties in every country they work with. The local contractors have the trust of aqua farmers and researchers. That helps to bring this technology into practice. “They are working on a tilapia feed ration that is 45 to 47 percent protein. That is perfect for the incorporation of soybean meal. In addition they are working with feed mills to manufacture fish feed with high specs of soybean meal in it. “The Egyptian fish farmers need to see there is value and that their harvest rates increase, or that they can turn their ponds quicker and they will see the results. Those results will translate to the use of more soybean meal coming from Iowa and the U.S. This market won’t replace China but growth in several smaller countries can offset losses we are anticipating due to the tariffs.”

Egypt is the No. 1 growth market for soybeans and Morocco is the No. 2 growth market for soybean meal.

What’s next when it comes to Egypt and the Iowa soybean farmer? “The ISA has supported projects in China for more than 35 years. The success there didn’t take off overnight. The Middle East and North Africa are areas to keep an eye on. Egypt is the No. 1 growth market for soybeans and Morocco is the No. 2 growth market for soybean meal. In 2018, the farm gate value of tilapia in Egypt was $12 billion. They anticipate that in 2028 the value will be $25 billion. We have to be realistic this isn’t China but there are some real opportunities in the future.” Joseph L. Murphy can be contacted at jmurphy@iasoybeans.com.

Iowa Soybean Association President Lindsay Greiner recently toured Egyptian feed mills and an aquaculture farm to learn more about the African market.

“

CHINA AND

EAST ASIA HAVE BEEN A FOCUS

FOR YEARS, BUT I THINK NORTH AFRICA IS A PART OF THE WORLD THAT WE NEED TO BEGIN LEARNING MORE ABOUT.

”

— Karey Claghorn, ISA Chief Operating Officer

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GENOME EDITING USSEC implements prescriptive marketing plan to increase soy exports, consumption By Ed Anderson

umans have manipulated and modified the genetic material of plants and animals for thousands of years to improve yield, health, quality and overall performance. From simple selections to classical breeding to genetic engineering and biotechnology, scientists have constantly strived to increase the speed, precision, accuracy and efficiency of plant and animal improvement. A new set of biotechnology tools has been classified ‘genome editing’ because they enable researchers to make very precise modifications in an organism’s DNA relatively quickly and easily. Genome edits include small genetic insertions and deletions, as well as small or large gene modifications and replacements. The most common techniques in this new class of genome editing tools include: meganucleases, zinc finger nucleases (ZFNs), transcription activator-like effector-based nucleases (TALENs) and clustered regularly interspaced short palindromic repeats (CRISPR/Cas9). All of these rely on special “molecular scissors” called

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nucleases that cut one or both strands of a double-stranded DNA molecule at predetermined locations and allow subsequent modifications. Since the Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) technology has emerged as the most powerful and versatile of these, we will focus on it in this article.

CRISPR in nature Like many biotechnology tools, CRISPR was invented by nature and then discovered and repurposed by scientists. In nature, bacteria use CRISPR-associated nucleic acid and protein as part of a rather elegant defense system against infecting viruses by recognizing and destroying an infecting virus’ genetic material. There are two key features of this defense process. First, the CRISPRrelated bacterial nucleic acid (in this case, RNA) specifically recognizes and attaches to certain virus RNA or DNA sequences. Second, when the CRISPR RNA attaches to the invading virus’ nucleic acid, it ‘guides’ a CRISPR-related protein nuclease

(Cas9 or similar enzyme) that cuts the virus DNA or RNA to block the infection.

CRISPR in biotechnology In biotechnology, scientists learned quite some time ago that naturally occurring gene modifying systems can be manipulated for our benefit. Once scientists studied and learned that the fundamental mechanisms of CRISPR involve nucleic acid sequence-dependent, site-specific recognition and cutting, they purified, characterized and customized the CRISPR components to modify plant and animal genomes in precise fashion (Figure 1). Thus, CRISPR in biotechnology is essentially a tool to recognize and cut DNA at very specific locations for subsequent modification.

Application of CRISPR to crop improvement It is important to understand that successful application of CRISPR for site-specific gene editing and crop improvement is predicated on a thorough understanding of DNA sequences and protein functionality. Scientists can’t make specific gene edits without first knowing gene sequences and functions. This basic research takes years and is funded by checkoff dollars, federal agency grants and company investments. It is accomplished in the private sector and at universities. For soybeans, genome editing targets include genes for yield improvement, yield preservation, quality and other traits; such as decreased flower abortion and increased pod set, improved resistance to multiple insects and diseases, herbicide tolerance, improved amino acid composition and custom protein production, optimized oil profiles and accumulation, enhanced nutritional value through decreases in trysin inhibitors and other antinutritional factors like raffinose and stachyose, drought or flooding tolerance, soil salinity or pH tolerance, and improved nutrient uptake and use.

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Figure 1

CRISPR FUNCTION FOR SITE-SPECIFIC DNA MODIFICATION Cas9 DNA Cas9

5’

Guide RNA (gRNA) DNA

3’ 5’

Cas9 nuclease is guided to a specific site on the target DNAGuide by the specific RNA (gRNA) sequences in the guide RNA (shown in green). After the target DNA has been cut, other cellular processes work to repair the3’damage. Small insertions or deletions (called indels) can be random or specific

“

Genome editing is the latest biotechnology advancement with broad application potential for accelerating crop improvement targets including yield, performance and quality. As some of the earliest adopters of technology, farmers will produce genome-edited crops to help sustainably meet increasing world needs for food, feed, fuel and fiber.

insertion or deletion

gene insertion

insertion or deletion

gene insertion

gene regulation gene regulation

If random, the mutation usually results in silencing or knocking-out (turning off) protein expression from that gene. If specific, the indel mutations may regulate gene expression (gene regulation) for more or less protein. Other specific indel mutations modify genes to produce proteins that have new and better functionality. Finally, if novel genes are provided they may be inserted (gene insertion) into the cut DNA during repair for entirely new beneficial proteins.

Will crops modified by CRISPR be regulated?

”

Second, it is important to know that, in most cases, plants must be stably transformed (using the tools and The short answer to this question is techniques of biotechnology and genetic “it depends”. Here’s why. First, it will be engineering) to get the guide RNA and up to regulatory agencies to determine the Cas9 nuclease into cells for siteif and how CRISPR and similar genome specific gene editing. Those processes editing techniques and edited plants make the plants transgenic and there will be reviewed and regulated. In the will likely be regulatory review required. U.S., regulators have stated that simple For the longer-term, a lot of work is mutations created by CRISPR and other being undertaken to develop systems genome editing techniques may not be that will excise the CRISPR sequences regulated as GMO crops, because natural mutations and those induced by chemicals from the plant genome after the specific modifications have been made. Other and radiation previously have not been scientists are working with novel regulated in crop commercialization. DNA delivery systems, like modified However, the Court of Justice of the plant viruses, to introduce the CRISPR European Union (ECJ) recently decided that “organisms obtained by mutagenesis components without incorporating them into the plant’s genome. are GMOs and are, in principle, subject Finally, if the CRISPR technique is to the obligations laid down by the GMO used to specifically cut the crop plant’s Directive.” If it stands, the ECJ decision genetic material and insert a new gene will deal a major blow to CRISPR and other genome editing technologies, to the that will code for a novel protein, that crops developed by these techniques ,and process and the resulting plants will probably be carefully reviewed and to the companies and universities that regulated as GMO crops. have made these investments.

Ed Anderson

Summary Genome editing technologies like CRISPR are potentially powerful and exciting new biotechnologies that may be used for crop improvement by increasing efficiency, specificity and cost-effectiveness of sitespecific gene modification and gene insertion. In soybeans, there have been some biological challenges to adapting these technologies, but those are being addressed. Farmers should keep in mind that this technology, like all others, also has limitations. For example, gene editing depends on a thorough understanding of the plant’s DNA sequences and their protein functions. In addition, plants must be amenable to several genetic engineering processes, the expression of the CRISPR components and the resulting edited genomic sequences. Finally, review and regulation of CRISPR-derived crops will depend on political and legal perspectives, and the processes and products being commercialized. Ed Anderson can be contacted at eanderson@iasoybeans.com. OCTOBER 2018 | IASOYBEANS.COM | 27

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INTEGRATING WATER MANAGEMENT One Water approach inspires regional action By Carol Brown

here are 1.7 million people in the U.S. who don’t have access to drinking water or flushing toilets. Residents in Flint, Michigan, still struggle with the lead contamination issue and trust in their drinking waters. Environmental leaders agree that is unacceptable and are striving to do something about it. The brainstorm continued at the One Water Summit, a national conference held in Minneapolis. The three-day event held in July brought together city utility and wastewater treatment managers, policymakers, county supervisors, representatives from watershed improvement organizations and the agriculture industry. The Summit goal was to move the One Water approach forward. The U.S. Water Alliance, which hosts the Summit, defines the One Water approach as “evolving our nation’s water management in an integrated, inclusive and sustainable manner.”

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Iowa brought one of the largest of the 51 delegations to the Summit. The delegates felt a different vibe here than at other conferences — one of collaboration rather than separation. Attendees kept agricultural issues at equal priority levels as municipal issues. “Flyover,” a Minnesota Public Radio show, aired live at the Summit. U.S. Water Alliance CEO Radhika Fox remarked during the broadcast, “I think what’s holding us back in the water sector is we have these very old, entrenched ways of thinking: It’s us versus them. It’s farmers versus fish. It’s cities versus agriculture. We’ve got to stop that nonsense, because the reality is that there’s so much at stake.” Roger Wolf and other delegates are taking the momentum from the Summit back to the Midwest to engage more people. Wolf, director of the Iowa Soybean Association’s Environmental Programs and Services, sits on the U.S. Water Alliance board of directors.”

ISA staff sat down with Wolf and asked the following questions:

Why do you think the One Water approach will work? “Having the necessary conversations in Iowa and the Midwest to enact change is a priority. Removing the ag–urban barriers will go a great distance toward the goal of cleaner water for us all. “I believe what we are doing in Iowa to address water quality and flooding is putting the One Water approach into action. There are Iowa cities and agriculture working hand-in-hand on these issues with a ‘together we are better’ attitude. “For the One Water approach to be successful relationships need to be established, investments should be shared so each has some skin in the game, value propositions for all parties are acknowledged and pursued, and we hold each other accountable as implementation occurs.”

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How did the One Water Summit affect your thinking toward Iowa water issues? “I thought the national conversation at the Summit was great. It will definitely broaden awareness for a new and comprehensive approach to our 21st century water challenges. Several of us thought there would be value in convening a regional meeting to move the One Water action agenda forward. “I’m helping the North Central Region Water Network, the Soil and Water Conservation Society and the U.S. Water Alliance to plan the North Central Region One Water Action Forum, set for December 11-13, 2018, in Indianapolis, Indiana.”

What do you hope to achieve at this Action Forum? “Water is a priority strategic management issue facing Midwest farmers and communities. While there is a lot of work occurring now in the region, challenges continue to outpace our efforts. The Action Forum will deepen the One Water conversation, localize lessons learned and will foster action on Midwest issues, such as nutrient loading into the Mississippi River. “We hope the forum will attract similar audiences as those who attended the national Summit. We encourage the Summit attendees to invite others to the regional forum and join in the movement. “I want attendees to be inspired to take the One Water approach to their communities. Integrating the issues of water quality, flooding, recreation, agriculture, city infrastructure, research, technology and policy will be keys to realizing a more sustainable future.”

Roger Wolf, ISA Director of Environmental Programs and Services, is helping to carry the One Water message to Iowans.

How do envision the One Water approach will be accomplished? “People should not be surprised that this work is challenging. The issues are complex. There is uncertainty on cause-and-effect relationships and, for the most part, these new working relationships have to be created and nurtured. There needs to be more voices at the table to learn from one another. “The good news is we have good data. Plans for implementation exist. Technologies and practices are available to drive positive impact. And there is a commitment from leaders to advance collaborative projects together. “Yet, we will need significant financial resources to scale up the use of

conservation practices, some of which are costly. It doesn’t make economic sense to ask farmers to pay for these practices — bioreactors and saturated buffers, for example — while other practices that improve water quality also improve the financial health of the farm, such as nutrient management. “We need to address these challenges together, and the One Water approach provides a space for broad stakeholders to figure it out. Together we will be better.” For more information on the North Central Region One Water Action Forum, visit the website: http:// northcentralwater.org/onewater. Contact Carol Brown at cbrown@iasoybeans.com.

At the launch of the North Raccoon Farm to River Partnership, Diane Ercse, Roger Wolf, Harry Ahrenholtz and Julie Kenney share how watershed improvement projects.

OCTOBER 2018 | IASOYBEANS.COM | 29

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The Last Word Editor’s Notes by Ann Clinton aclinton@iasoybeans.com

May We All

’m a country music fan. But more specifically, I am a lover of lyrics. Music, in my opinion, must make me feel something for it to be good, and beautiful words provoke emotion for me. If the song writer is more of a poet than a musician, then I will play that music on repeat. This year, the band Florida Georgia Line has had a big hit on the charts called, “May We All.” It’s a song that resonates with me. There’s one line that gives me all the feels …

“May we all get to see those fields of green turn gold.” Here we all are in the most magical time of the year. We got to watch the seeds that were planted in the spring turn into a bountiful harvest this fall. Is there anything more fulfilling than to experience and appreciate another season of life? However, things have been really challenging for the soybean industry recently. It’s with mixed emotions that farmers have been harvesting what

will likely be another record-yielding crop. Excitement of great yields are tempered with the reality of terrible soybean prices. As the editorial team for the Iowa Soybean Review discussed story ideas for this magazine, we concluded there was no way we’d be able to communicate all the complexities of a trade war into a single edition. Nor would we even try to pretend we understood all the ways you are being impacted financially and emotionally. However, we also knew it was important to report on the steps being taken to counteract the current situation. During my tenure at the Iowa Soybean Association (ISA), I’ve sat in a committee meeting or two. Over the past 20 years, I’ve listened as ISA directors discussed issues ranging from diseases and pests to weather and storage concerns. There’s always something, right? There might have been a “perfect” year thrown into the

mix, but the farmers I know never planned for it. They have always planned for the tough times. The forethought of ISA’s farmerdirectors is reflected in the stories you read in this issue. You knew it was important to invest in emerging markets for your soybeans. Trade missions to Egypt, Europe and Mexico had been planned long before China pulled out as the No.1 purchaser of U.S. soybeans. Market potential and diversified applications for soybeans have been studied and backup plans are now in full-swing. My thoughts and good wishes are with you as you continue to harvest this historic crop. I hope you turn your music on in the combine and sing along with “my song” when it plays.

“May we all do a little bit better than the first time. Learn a little something from the worst times. Get a little stronger from the hurt times.”

OCTOBER 2018 | IASOYBEANS.COM | 31

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