Iowa Soybean Review, Summer 2019

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

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FUTURE OF SOY: Summer 2019

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

Summer 2019 | Vol. 31, No. 8

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 | Bethany Baratta 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.

11 Future Focused

Farmers are ready to take advantage of new opportunities.

18 Soybeans Hit the

Road New use paving the way for improved soybean oil demand.

20 Recovery Underway Southwest Iowa farmers forge ahead after flooding.

22 Tour de Iowa

Agriculture ISA showcasing the “AG” in RAGBRAI.

On the Cover: Brent Swart, Iowa Soybean Association director and farmer from Spencer, believes it will be important to maintain good farmer leadership in agricultural associations in order to ensure a successful future.

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.

SUMMER 2019 | IASOYBEANS.COM | 3

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

Moving Forward

A

fter nearly 30 years working for Iowa’s soybean farmers, I have had a front-row seat to a lot of changes in agriculture. I have seen our industry grow, watched soybean prices rise and fall, survived years of drought and flooding, witnessed new technologies emerge, watched as consumers became more engaged in how food is produced, observed multiple Farm Bills get passed and implemented, seen trade agreements negotiated and broken, and traveled to China countless times as they became the largest consumer of soybeans in the world.

Even with all this history, I can honestly say I've never seen anything quite like what we have experienced in the last 12 months. From last fall’s harvest challenges to this spring’s never-ending rainfall, this has been a period that we will be talking about for years. Beyond the weather challenges, we have been whipsawed by disruptions and potential disruptions to exports to China, Mexico, Canada and a host of other markets. Just when we think things

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might be getting better, something always seems to happen to cause another downward spiral.

Through all of this, the Iowa Soybean Association has continued to take a long-term view of these challenges and to do our best to keep moving forward to find new markets for Iowa’s soybeans. We also continue to work alongside farmers as they seek to reduce costs in a time of limited profits. These are tough times, but as always, farmers remain focused on the future.

I think that one of the most tangible (and hopefully most likely) positive developments on the horizon would be the approval of the U.S. – Mexico – Canada Agreement (USMCA). This revised NAFTA agreement would allow U.S. agriculture to continue to see significant trade growth in two of our most important markets.

Since the enactment of NAFTA, U.S. soybean exports have quadrupled to Mexico and doubled to Canada. Mexico is the numbertwo buyer of U.S. soybean meal, soy oil and whole soybeans. Canada

is the number-four buyer of U.S. soybean meal and ranks 7th in soybean oil. Overall, Canada and Mexico account for 29 percent of all U.S. ag exports with Canada being the largest overall market.

USMCA, as drafted, has relatively little direct impact on soybean exports to either country as it would maintain the zero tariffs in place for soybeans and soy products. But it would ensure that we continue to have access to both markets and make improvements to biotechnology enforcement chapters, improve transparency and create a rapid response mechanism to address trade challenges as they arise. It also has several components that would be beneficial to our livestock and dairy producers.

I encourage you to take the time to make sure that Iowa’s entire congressional delegation understands the importance of the new agreement as Iowa’s farmers continue to work on moving forward. We will indeed see better days in the future but having trade disruptions resolved is critically important.

unitedsoybean.org

RESEARCHING A BETTER BEAN

Whether you’re dealing with drought, flood, heat or other climate-related stress, the soy checkoff is working behind the scenes to diversify U.S. soybean genetics and increase stress tolerance.

We’re looking inside the bean, beyond the bushel and around the world to keep preference for U.S. soy strong. And it’s helping make a valuable impact for soybean farmers like you.

See more ways the soy checkoff is maximizing profit opportunities for soybean farmers at unitedsoybean.org

Brought to you by the soy checkoff. ©2018 United Soybean Board. Our Soy Checkoff and the Our Soy Checkoff mark are trademarks of United Soybean Board. All other trademarks are property of their respective owners.

Michael Dolch Director of Public Affairs, Iowa Soybean Association MDolch@iasoybeans.com

Decoding Soybean Policy IFLM. RFIP. BFTC. USMCA. BTC. RFS. SRE. Seven acronyms.

Twenty-six letters.

During this prolonged period of unprecedented rainfall, trade headwinds, program complexity and market turmoil – a time when the only certainty is uncertainty – these acronyms/letters represent and harness the potential of agriculture and soybean policy.

Passed by the Iowa House and Senate and signed by Iowa Governor Kim Reynolds, the Ag & Natural Resources Appropriations bill provided funds continuing the Integrated Farm and Livestock Management (IFLM) Demonstration Program. Set forth as a key initiative

by ISA membership, this was a big legislative win during the 2019 session. IFLM funding is leveraged to link land use management decisions and inputs with natural resources considerations. The legislature’s ongoing support plays a critical role in furthering the mission of ISA’s On-Farm Research team.

ISA extends a special "thank you" to State Senator Tom Shipley of Adams County and Representative Norlin Mommsen of Clinton County for negotiating a responsible, farmerfriendly ag appropriations bill.

The legislature fully funded the

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Renewable Fuels Infrastructure Program (RFIP) through the appropriations process. RFIP increases consumer access to renewable fuels by providing retailers cost-share dollars to install flex fuel pumps or other infrastructure for biodiesel, E15 and E85. Lawmakers approved a measure to update and expand the Beginning Farmer Tax Credit (BFTC) Program. The ISA-backed bill, signed into law May 21, expands the program to increase participation and provide opportunity for beginning farmers to lease ground.

Downshifting into a slower gear, let’s bring federal policy into focus for a moment. As I write, the House Ways and Means Committee is preparing to mark up legislation which would extend expired tax incentives through 2020, including the biodiesel tax credit (or BTC). The proposal, coming on the heels of a National Biodiesel Board meeting in which ISA participated, would not only provide biodiesel producers much-needed certainty, but also incentivize investment and growth in domestic production capacity.

Let’s not leave the Renewable Fuels Standard (RFS) on the sidelines. We applaud Senators Charles Grassley and Joni Ernst, as well as Iowa’s House delegation, for ongoing

efforts to reign in EPA’s waiver – small refinery exemption (SRE) – authority. These waivers have reduced biodiesel volume obligations under the RFS by more than 360 million gallons, nearly all of Iowa’s production capacity.

The clock is ticking for ratification of the U.S.-MexicoCanada Agreement (USMCA). Last month, we welcomed news that President Trump had reached a deal to lift Section 232 metal tariffs, removing a major roadblock to passage. Earlier this month, ISA joined nearly 1,000 agricultural and food associations on a letter urging Congress to act and swiftly ratify the trade agreement. The modernized pact builds on the success of NAFTA, which has quadrupled soybean exports to Mexico and doubled those to Canada since going into effect.

These are only a handful of the many legislative and regulatory issues we’re tackling alongside our farmer members. This year, two ISA members have testified before the U.S. Congress, bringing a voice to issues like the BTC and catastrophic floods affecting farmers across the Midwest. ISA will continue to work with regulators and elected officials to decode and simplify policy, and to realize the potential our industry has to offer.

UNDERSTANDING

USB & ASA PRESENTED BY THE

Here to Serve: Trade wars. Unprecedented flooding. Low market prices. Burdensome global supplies. Fact: growing soybeans isn’t for the faint of heart. But it’s the difficult times that prove the worth of national soybean organizations. Hear specifics from United Soybean Board CEO Polly Ruhland and American Soybean Association CEO Ryan Findlay how they’re collaborating and responding to the needs of farmers while creating opportunities for the industry’s continued growth.

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Field Day Demonstrates Saturated Buffer Installation

D

oing whatever they can to keep soil in place and improving water quality is a top priority for landowner Ken Fawcett and his nephew Kent Stuart.

“Our family is always looking for different ideas to help conserve soil and water,” says Stuart. “The saturated buffer idea came along, and I thought it was a great fit. I wouldn’t say the possibilities are endless because there are places where these won’t work, but there are a lot of situations where a saturated buffer will work.” The Fawcett family hosted a field day in June to demonstrate the installation of a saturated buffer on one of their farms near West Branch.

A saturated buffer consists of a field tile line that has been diverted from emptying directly into a waterbody, but rather to another perforated tile running parallel to the stream. Tile water exits into the buffer between the field and stream, saturating the soil in the buffer area. This allows excess nitrate to be taken up by the natural vegetation before entering the water.

your

“In this location, there are two tile lines that drain about 80 acres,” says Stuart. “We tied the two lines together above the control structure, so now all the water goes through the structure and into the saturated line. When we go to farm it, we’ll pull the boards out from the control structure a couple weeks ahead of time. The water will drain down, so we’ll be able to farm it.”

The Iowa Land Improvement Contractors Association (LICA) used the installation of a tile line for creation of a saturated buffer as an educational opportunity to see how these structures were put in.

The Fawcett family has long been involved with conservation. The farm, established in 1851, has been no-tilled since the 1970s while cover crops have been used for eight years. Grassed waterways, riparian buffers and areas of

pollinator habitat are also in place.

To get the project going, Stuart talked with his friend and contractor Bruce Barnhart through LICA and Eric Brown with EB Drainage, who had previously done tile installations on the Fawcett farms. They got Stuart in touch with the Iowa Agriculture Water Alliance (IAWA) and Agri Drain Corporation, who then connected him with Ecosystems Services Exchange (ESE), the designers for the buffer.

IAWA and LICA hosted the event.

Other field day partners included Iowa Learning Farms, the Iowa Department of Agriculture and Land Stewardship (IDALS), Agri Drain, ESE, Iowa Soybean Association, Iowa Pork Producers Association, Iowa Corn and The Nature Conservancy in Iowa.

Contact Carol Brown at cbrown@iasoybeans.com.

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unitedsoybean.org

INVESTING IN NEW MARKETS FOR U.S. SOY

From promoting the profitability of using high-quality soybean meal in India to training animal producers on nutrition in Colombia, the soy checkoff is working behind the scenes to develop more market opportunities for U.S. soy. We’re looking inside the bean, beyond the bushel and around the world to keep preference for U.S. soy strong. And it’s helping make a valuable impact for soybean farmers like you.

See more ways the soy checkoff is maximizing profit opportunities for soybean farmers at unitedsoybean.org

Brought to you by the soy checkoff. ©2018 United Soybean Board. Our Soy Checkoff and the Our Soy Checkoff mark are trademarks of United Soybean Board. All other trademarks are property of their respective owners.

10 | SUMMER 2019 | IASOYBEANS.COM

Brent Renner, Klemme

FUTURE F OC U S E D

FARMERS ARE READY TO TAKE ADVANTAGE OF NEW OPPORTUNITIES

BY BETHANY BARATTA

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INVESTING CHECKOFF DOLLARS

April Hemmes, Hampton

We asked some Iowa soybean farmers to think about the future of the Iowa Soybean Association (ISA) and soybean production in the state.

Meet our farmers: Brent Renner, ISA director in Klemme: soybeans, corn, alfalfa and cattle.

Brent Swart, ISA director in Spencer: soybeans, corn and cover crops; field agronomist for Pioneer.

April Hemmes, ISA director in Hampton: corn, soybeans and hay; United Soybean Board member.

Dean Sponheim, soybeans and corn in Nora Springs; runs a custom strip-till operation and cover crop seed business.

Robb Ewoldt, ISA director in Davenport: soybeans, corn and alfalfa; also has a trucking operation, raises cow-calf pairs and custom finishes hogs.

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1. WHAT IS THE ISA BOARD DOING NOW TO PREPARE FOR THE NEXT 55 YEARS? HEMMES: It continues to work with staff to look toward the future through long-range strategic planning efforts in listening to other farmers about their vision of what ISA should look like.

This includes putting money away for a “rainy day” to be able to continue projects that have been started.

Perhaps most important, forming the District Advisory Council encourages engagement and leadership opportunities in ISA. I like that there are many young farmers involved because they truly are the future of this organization.

EWOLDT: Building relationships with our elected officials and our customers is important in communicating our goals as farmers. That will continue to be vital as the public is multiple generations removed from the farm.

We’re always working on trade and developing markets, just as they did in the first 55 years of this organization.

INVESTING CHECKOFF DOLLARS

2. WHAT CHALLENGES DO YOU PREDICT IOWA SOYBEAN GROWERS WILL SEE IN THE FUTURE AND HOW WILL ISA BE A PART OF THE SOLUTIONS? HEMMES: Farmers face many challenges now, and they will become even more prominent in the future. Trade, attacks on livestock production, and farming with technology will continue to be a challenge. But the cost of farming is huge! Getting beginning producers started in soybean production is almost impossible if you don’t have an “in” with

a farming operation. Too many young people are not coming back to the farm. Helping those not on the farm understand why and how we produce soybeans will continue to be an opportunity for Iowa’s soybean farmers. The Iowa Food & Family Project, spearheaded by the ISA, is just one example of how we are reaching out to connect farmers with others.

EWOLDT: Profitability. In the short term, market access because of what’s happened with China. It’s a big challenge to develop markets and more uses for soybeans. Regulation and trying to get our own country to understand what we’re doing so we’re not regulated to death. ISA research in crop production will help us understand ways to be more profitable on our farm.

3. HOW WILL RESEARCH BE A PART OF A SUSTAINABLE FUTURE FOR SOYBEAN GROWERS? SWART: Research is key to helping develop production practices and find those solutions that continue to make soybeans profitable in Iowa. Continuing research efforts through ISA’s On-Farm Network® and partnerships with Iowa State University and others helps answer growers’ questions about production and management tools to be more profitable on our acres. It also helps determine what products hold the most value to our operations.

SPONHEIM: We can produce a product that farmers can make

money on, but research can help us determine how we can have a smaller carbon footprint.

As farmers, we’re working on adding cover crops to acres, but we really want to know what we’re getting out of it in terms of water quality, soil health and nutrient reclamation. How do you quantify how much good we’re doing with soil health and water quality by using cover crops in a cropping system? That’s where ISA is coming in. ISA’s environmental programs and water monitoring have been really good, and we need to continue that groundlevel approach.

Brent Swart, Spencer

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4. WHAT WILL SOYBEAN PRODUCTION LOOK LIKE IN THE FUTURE? RENNER: It’s pretty amazing how much farming has changed in less than 20 years with GPS and autonomous tractors. The soybean itself may look different in the future as end users adjust their preferences to soybeans with higher protein levels or more oleic content. Whether it’s production practices or the product itself, we need to be on the forefront of new finds and opportunities. Then we need to get the information to our growers and allow them to adapt and take advantage of the many different changing markets.

SWART: As a grower, I make decisions to get the highest yield possible in the most profitable manner. But I wonder if, in the future, we’ll still be paid based on yields? Or will our export partners be asking for different metrics, such as protein or oil content of the seed itself to base market prices? Research

Dean Sponheim, Nora Springs

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will continue to look at how soybeans can best be used in aquaculture, cattle and hog production.

SPONHEIM: As much as it’s changed in my short career of 40 years, I don’t know. We’ve gone from adding beans as a second or third crop and not a vital crop on our farm, to soybeans being 50 percent of our business. It’s a big deal. I can see more of us growing soybeans specific to what our customers want. We could be taking crops in and out without being in the tractor and combine, but we still have to produce a product our consumers want.

HEMMES: I always smile when I’m asked this question. My grandfather lived to be 101 and started farming with horses and lived long enough to see an autosteer tractor! Imagine what the future holds for farming and my generation. I think it will

definitely have a lot more technology, both mechanical and plant breeding. I have often said we can have designer beans for any market. Soybeans are so versatile in their usage, so there will always be a place for them in the everchanging world of agriculture. The key to all of this is keeping technology affordable for all types of production.

EWOLDT: Maybe soybean production in the future will be more component-based. Maybe we’ll understand soybeans a little more and figure out how to get a little more protein in our product. In 20, 30, 40 years, will it be an oil-driven market? Maybe. Through partnerships with Iowa State University, the Iowa Soybean Research Center and others, ISA will be making sure we get the information out to producers so they understand the research and potential opportunities for growing and selling a different kind of soybean.

INVESTING CHECKOFF DOLLARS

Robb Ewoldt, Davenport

5. What’s the future of U.S. soybean exports?

What countries could be major players?

HEMMES: U.S. soybeans will always be the best quality and most sustainable source of protein for the world. China is still the biggest market in the world, and I see that continuing. The U.S. Soybean Export Council (USSEC) has done a phenomenal job developing markets in countries with fast-growing populations that could benefit from protein found in U.S. soy. Nearterm, I see Southeast Asia, India and Vietnam becoming big players. We also can’t ignore Africa.

EWOLDT: We’re already starting to see a little bit of life after China — soybean prices have softened and it’s bringing some customers back.

Long term, I see Egypt, northern Africa, Southeast Asia, Vietnam and the Philippines as major markets. But anywhere we’re not, let’s try to sell beans.

6. HOW WILL ISA BE DIFFERENT — OR THE SAME — IN THE NEXT 10, 20 YEARS? RENNER: My hope is that ISA looks much the same in its structure. A focus on newer products — whether that’s soybeans with a higher protein level or a different amino acid makeup — could cause a shift to take advantage of expanding markets. The organization will still be looking at every opportunity to grow farming operations in a responsible way and take advantage of new and expanding markets.

SWART: The thing I hope that will be the same is the good farmer leadership we’ve had for the last 55 years. As farmers, we can all be proud of our strong organization and its leadership. My hope is that we can continue the soybean checkoff, so we can continue to find

solutions to the challenges that farmers face. Farmers in Iowa and nationally need a strong voice for them.

SPONHEIM: The main goals will remain the same: looking out for the producer as well as the consumer. No. 1 is the producer, to keep them in business and remain profitable. We’ll continue to work with customers to produce something they want to purchase. ISA is going to have to be flexible and change according to the wants and needs of producers and consumers, but the organization has been way ahead of the curve for a long time. I hope it continues to be proactive.

Contact Bethany Baratta at bbaratta@iasoybeans.com.

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Two women shade themselves from the heat of the sun while walking along the main port in Yangon, Myanmar.

PROSPECTING IN MAYNAMAR MARKET POTENTIAL EXPLORED IN SOUTHEAST ASIA

BY JOSEPH L. MURPHY

D

uring the California Gold Rush, prospectors sifted, rinsed and repeated in hopes of discovering gold. In business today, prospecting is the art of identifying potential customers.

A group of Midwest soybean associations are hoping that a recent prospecting trade mission in Southeast Asia will help them strike gold when it comes to building demand for U.S. soy.

Representatives from the Iowa Soybean Association (ISA), Kansas Soybean Commission and Nebraska Soybean Board, with the help of Mishek Incorporated, hope to add Myanmar and Malaysia to a list of emerging countries that could help whittle down abundant U.S. soybean supplies.

“We’re prospectors right now,” Peter Mishek, a consultant with the ISA, says. “We are digging and gathering information. We’re like gold prospectors.

It is like landing on the moon. It is

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uncharted territory, and we have to figure out what is going on to build a market profile.”

The Myanmar livestock feed industry is poised for expansion, but experts say U.S. soy will need to establish customer preference first to fully capitalize on the market.

A three-day trade mission to Myanmar in May revealed an untapped market that, combined with other southeast markets, could drive demand in a supply heavy U.S. soybean market.

By some estimates, Myanmar's feed industry could experience double-digit growth for the next five to seven years.

For U.S. soybean meal to be part of that growth, soy representatives say an understanding of infrastructure and logistics in Myanmar will be key. U.S. representatives will also need to educate owners of feed mills about the quality of U.S. soy.

“If we aren't here someone else will be,” Mishek says after visiting Crystal Diamond Livestock Company's feed mill south of Yangon, Myanmar.

Crystal Diamond is an integrated business native to Myanmar specializing in feed, poultry, eggs, duck and swine.

The company has experienced growth in its feed industry. Members of ISA, Nebraska Soybean Board and Kansas Soybean Commission told the company they want to be the preferred supplier of soybean meal for their operations.

The company has two feed mills in Myanmar – one in Mandalay and another in Yangon. Crystal Diamond's Mandalay facility produces 86,000 metric tons (MT) of feed per year. The feed is bagged and transported by the company to farms.

The Yangon location produces 240,000 MT of feed per year. The company utilizes modern facilities that have large commodity bulk storage bays and

INVESTING CHECKOFF DOLLARS

hydraulic assisted truck unloading.

Hla Hla Thein, owner of Greenfield International Company and vice chairman of Myanmar Livestock Feed Association, was one of four Myanmar feed mill representatives who attended a meeting with the U.S. trade team while in Myanmar. She owns a 60,000 layer farm and dairy that produces about 600 gallons of milk per day at a farm near Yangon. She says she would like to purchase soybean meal for her farm but logistics can be problematic.

“We would like to buy our soybean meal directly from the U.S., still we can't buy directly from the U.S. because the problem is logistics and payment,” Thein says.

Sunjin, a Korean-based company with holdings in Vietnam, Thailand and China, has been operating in Myanmar for seven years. Byung(Ha)Bruce Lee, CEO and part owner, believes Sunjin will expand in upcoming years.

“The livestock market is growing but still very small,” he says. “We (Myanmar) have broiler stock of one million, but if you go to Indonesia, they have 30 million. It's a big difference.”

Lee also compared Myanmar to Thailand because both countries have similar populations of 53 million people. Currently, Myanmar produces 3 million metric tons (MMT) feed annually and Thailand produces almost 20 MMT of feed. Sunjin imports 500,000 MT of soybean meal annually from the U.S and South America, according to Lee. “We hope someday that feed production may reach 10 MMT,” Lee said. “That is why I came here, because of the opportunity.”

Total animal feed demand in Myanmar increased 13-15 percent from 2016 to 2018 due to the rapid growth of the livestock sector. The USDA forecasts aggregate animal feed demand will increase to 4 MMT in 2020. The growth of the industry, which attracted Sunjin to Myanmar, is now attracting larger companies.

“The big companies, the big players will eventually integrate, and the market here is going to shift very fast,” he says. “There is no big

investment from the U.S. yet because there are still sanctions in place.”

In 2017, the U.S. Treasury Department issued economic sanctions on Burmese security forces and also indicated Myanmar, formerly known as Burma, was guilty of human rights abuses. But Mishek and others believe the sanctions will be lifted soon.

As trade tensions escalate between China and the U.S., countries in Southeast Asia are becoming valuable pieces in a trade puzzle that doesn't include China.

The U.S. Soybean Export Council (USSEC) has held multiple workshops in the area to educate farmers and feed companies about the advantages of U.S. soy.

Since the tariff war began last year, USSEC has been conducting a global tour, called Experience Today's U.S. Soy Advantage, to expand markets around the world. The meetings are a part of USSEC's efforts to maintain and further build relationships with U.S. exporters and stakeholders in markets around the world.

“This is an industry that thrives on a clear and transparent market,” Timothy Loh, USSEC regional director for Southeast Asia, says in reference to damage being caused by the U.S.China trade war. “When uncertainty creeps into the market, we see restraint. That uncertainty doesn't lend itself well to the type of work we want to do. We want to sell, and the U.S has plenty of beans to sell. I hope this process comes to an end soon.”

Brazil has experienced a monetary windfall by being the preferred supplier of soybeans to China. But Mishek said all is not rosy for Brazil.

He believes they will have difficulties exporting their crop in upcoming years due to the scourge of African Swine Fever on the Chinese pork industry.

“We have a year head start over South American competitors to establish these markets,” Mishek says. “We need to work to establish these relationships and make deals.”

MYANMAR'S FEED INDUSTRY COULD EXPERIENCE DOUBLE-DIGIT GROWTH FOR THE NEXT FIVE TO SEVEN YEARS.

State soybean representatives visit Sunjin in Yangon, Myanmar.

Contact Joseph L. Murphy at jmurphy@iasoybeans.com.

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SOYBEANS

ROAD HIT THE

NEW U S E PAV IN G THE WAY F OR I M PR OVE D SOY BE A N OI L DE M A N D

BY LAUREN HOUSKA

B

eep beep — a new use for soybean oil is coming through!

Iowa State University (ISU) researchers are closing in on the commercialization of a new product that could help increase demand for soybean oil — and soon. This bio-based polymer can replace the petroleum-based polymers currently used as the binding agent in asphalt.

“Soybeans are highly dependent on international markets,” says Rolland Schnell, an Iowa Soybean Association (ISA) district director. “Any time we can use our product domestically, it gives farmers a little more certainty.”

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The Newton soybean farmer has served on ISA's board of directors for eight years. He was serving when ISA and the United Soybean Board each invested $125,000 in checkoff funds in bio-polymer research at ISU several years ago.

To date, more than $13 million in private, state and federal funds have been leveraged to bring this technology to market.

“Like the hard-fought growth of the biodiesel industry over the years, soybeans need a real boost from something right now,” Schnell says. “I can really see this new use

as being that next big, high-volume use to really give us that boost.”

It’s more important than ever to make investments to improve demand for U.S. soybean oil, Schnell says, as excess supplies continue to dampen soybean prices.

A biodiesel study shows a 12.9-cent increase in the price of soybean oil per pound, which equates to a 74-cent per bushel increase in soybean prices. It also equates to a $25-per-ton decrease in the cost of soybean meal, which is advantageous for Iowa’s livestock farmers, Schnell says.

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Soybean oil shines ISU Chemical and Biological Engineering Professor Eric Cochran and the team of experts working on this project expect demand for soybean oil to soar once commercial sales take off.

Cochran, the project lead, says there are about 1.6 billion pounds of oil used in the polymer binders annually from three market segments combined — polymer-modified pavements, pavement rejuvenation and road maintenance products.

Given the durability and environmental advantages over more expensive petroleum-based polymers, he says it’s not unrealistic that hundreds of thousands of tons of soybean oil could be utilized annually.

“We’re competing against petroleum-based polymers that cost between $2-$4 per pound and whose key ingredient, butadiene, is largely imported from Asia,” Cochran says. “We’re offering a domestically produced soy-based alternative that performs as well or better and will cost about $1 per pound.”

Testing the tech After years of research-scale development and testing at ISU’s Bio-Polymer Processing Facility at the BioCentury Research Farm, the product entered the testing phase in November at the National Center for Asphalt Technology (NCAT) Test Track.

A 1.7-mile oval in Opelika, Alabama, the track is comprised of 46 main test sections sponsored on threeyear cycles. The track is circled by a fleet of heavily loaded trucks resulting in 10-million-equivalent single-axle loads of traffic. The performance of each test section is closely monitored over two years.

Participating in NCAT are 22 state departments of transportation — including the Iowa Department of Transportation — as well as 20 national companies. If tests go well, it could launch a broader reach and market for the product, Cochran says.

Researchers discuss recent findings of their soy-based asphalt at the ISU BioCentury Research Farm near Boone.

“Commercial sales come after the testing and regulatory hurdles have been addressed,” he says. “If the NCAT demo goes well, you’ve essentially got 22 states that aren’t worried about allowing your product to be used, plus you could have companies that could be interested in buying the product. It’s good public relations if things go well.”

Next steps “We have taken what we learned from plant operations and identified bottlenecks and processing steps that would add costs and figured out how to eliminate those things,” Cochran says.

He says the next steps are to scale up and sell, which is what they are working toward this year. Potential manufacturers of the product want to see if there is real demand for this product before they commit to largescale production. Potential customers want to see how well the product works before buying. This all requires real-world demonstrations.

“This summer, we will be working on paving demonstrations across several states,” says Cochran. “Local demo projects get other state agencies on board and familiarize potential

customers, like regional contractors and terminal suppliers, with the benefits of the product.”

The first project will be in Cedar Rapids in July. They will also soon have projects in Tennessee, Minnesota, Alabama, Wisconsin, Nebraska and Kansas.

This progress is encouraging, Schnell says.

“It’s taken longer to get this product off the ground than we originally hoped, which can be frustrating as farmers are searching for new revenue opportunities,” Schnell notes. “But it seems that the stars have really started to align for this checkoff investment to start paying off.”

He believes ISA should continue to support the development and promotion of this new opportunity.

“We have supported the development of the biofuel industry for years, which has paid off,” Schnell says. “We need that same energy when it comes to new use projects like this one.”

Contact Lauren Houska at lhouska@iasoybeans.com.

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RECOVERY UNDERWAY S O U T H W E ST I OWA FA R M E R S F O R G E A H E A D A F T E R F LO O D I N G

BY BETHANY BARATTA

N

early four months after floodwaters inundated Michael Stenzel’s shop and last year’s crop sitting in grain bins, major questions regarding the future of the farm loom.

“I don’t know what we’re going to do,” Stenzel says, stepping around piles of rotting soybeans once destined for a premium seed market.

Michael farms with his dad, Mike, an Iowa Soybean Association (ISA) member. They were able to plant 1,000 acres of ground that was unscathed by the floodwaters. It remains to be seen, however, what happens to the 3,200 acres under water and the 140,000 bushels of corn and 50,000 bushels of soybeans, which had been stored in grain bins when the Missouri River burst its banks, inundating Hamburg.

A recent visit to the family’s shop and grain storage location revealed piles of steel separated from piles of grain. The

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Stenzels had separated the two in hopes of salvaging something. The shop had been cleared out before the floodwaters hit but was now further stripped as they pondered their next steps. Rebuild?

Move the shop or grain storage to higher ground? Those decisions haven't yet been made. Many others also have decisions to make — about their grain and the future of farming in southwest Iowa.

Fixing the levees One of the first steps in flood recovery is fixing the levees, says Iowa Secretary of Agriculture Mike Naig.

“Everything starts with repairing those levees. Whether you’re talking about land recovery and restoration, getting a crop in this year — or even next year — or an agribusiness getting back up and running, it all starts with having confidence that you’re protected from the river,” Naig says.

The U.S. Army Corps of Engineers identified 110 individual breaches in the Missouri River Basin. About half of those were in Iowa, Nebraska and northwest Missouri, says Bret Budd, chief of the Omaha Systems Restoration Team for the U.S. Army Corps’ Omaha District.

“The damage on the Missouri River levee is really pretty immense,” Budd says. “We’ve got the actual breaches, and we’ve got a lot of areas that have loss of critical sections. Basically, one-third of the levee section is gone.”

On a visit to the Benton/Washington levee, part of a 42-mile stretch that runs just south of Thurman to the Missouri state line, a construction crew was using a system of large excavation equipment, tile and pipes to filter out sand from water.

This dredging allowed the contracted team to use the sand to help build up the levee.

But weeks later, a heavy rain event caused the water level to rise again,

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essentially washing out the work that had already been done. That’s been the tricky part of the recovery effort, Budd says, dealing with a damaged levee with water still flowing into the Missouri River Basin and unpredictable weather.

Stopping the water is the first step to recovery, says Sidney farmer and ISA Director Jeff Jorgenson.

“When we shut off the spigot, things will change,” Jorgenson says. About 25 percent of his acres were located in the flooded area. He was able to move stored grain to higher ground before floodwaters reached his bins.

Decisions on fixing the levees will be made on a case-by-case basis, Budd says.

“There are huge holes we’re trying to fill to stop the water from passing through the breach of the levee. We’ll take a look at each breach and determine if it makes sense to build a levee section behind where the breach was or if it makes more sense to repair the breach where it’s located,” Budd says.

Those decisions will be made when the water recedes, and the Corps is able to inspect the levee.

Damage ‘astronomical’ The river crested at 30.1 feet at Nebraska City, nearly two feet above the record set in 2011.

Pat Sheldon, president of the Benton/ Washington Levee District, the group that oversees maintenance for the levee, says it’ll take an estimated $8 to $10 billion to repair all 100-plus breaches caused by the flooding in Iowa, Nebraska and Missouri.

That estimate doesn’t include damages to county roads, railroads or private property.

“The damage from this flood is going to be astronomical. Getting this back to pre-flood conditions could be a two- to three-year process,” Sheldon says.

The Benton/Washington levee breach, one of four main breaches, affected some of Sheldon’s acres seven miles away near Percival. It remains to be seen, however, how much damage and debris it left in his fields. Like Jorgenson’s acres, Sheldon’s were still under water.

“It will take thousands of dollars to get farms back into production because of the erosion and the channels of water running through them,” Jorgenson says.

Coordinated approach Farmers in Fremont County say there’s a more comprehensive, coordinated approach to flood and disaster relief compared to the most recent flooding event in 2011. Largely, they say, because the 2019 flooding covered a much larger area.

Iowa Gov. Kim Reynolds appointed a flood recovery advisory board that includes famers and various representatives presenting ideas on recovery efforts as they relate to finance, economic development, workforce and housing, agriculture, river management, and infrastructure and public health.

Jorgenson and Stenzel serve on Naig’s agriculture working group; Sheldon is a member of the river management and infrastructure working group.

“We’ve really broken our (ag working group) work down into three areas: land recovery, issues surrounding damaged grain and grain bins, and business continuity for farmers,” Naig says. Much of the direction for the working group comes from farmers who are acutely aware of the situation, he says.

“They know these issues very well, so we’re hoping to give them a voice in this process and address their concerns.

But mostly, we want to use the solutions they bring to the table,” Naig says.

There’s been a multi-state approach to flood recovery with governors in Kansas, Nebraska, Missouri and Iowa talking about new approaches to prevent flood damage. This includes discussion about river management, infrastructure connectivity and funding between the states.

agricultural losses due to natural disasters, rural watershed recovery, for repairs to damaged farm land and for towns affected by natural disasters.

Naig says the federal funding will address the needs of Iowa farmers who suffered “staggering” losses during the spring flooding.

Long road to recovery The federal disaster aid package could provide more direction for Stenzel, a fourth-generation farmer, as he thinks about the future of his family’s farm.

Before President Donald Trump signed the disaster relief and recovery bill, Stenzel figured his options were both drastic and limited.

“I’ve got to decide here within the next six months what I’m going to do,” he says. “My dad’s 72, he can’t start over. So, maybe Dad slows down, and I pick up a few acres and get rid of some of our highrisk ground. Maybe I quit completely and sell out, but I don’t know what I would do for a job. The last scenario is to start over and start rebuilding.”

The farm is his lifeline, he says.

“This is all we got. This is my life.

What else am I going to do?”

Contact Bethany Baratta at bbaratta@iasoybeans.com.

Help on the way The U.S. Iowa Department of Agriculture and Land Stewardship (IDALS) estimates that 1.9 million bushels of corn and 482,000 bushels of soybeans were lost in Fremont, Mills and Pottawattamie counties as a result of the March flooding.

The grain was valued at $10.9 million, according to IDALS. An estimated 418 grain bins were damaged, valued at $11.6 million, IDALS says.

The House and Senate passed a $19.1 billion federal disaster aid bill June 3. The federal disaster aid package includes funding to cover producers’

Flood water from the Missouri River covers the north and south lanes of Interstate 29 near Percival.

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INVESTING CHECKOFF DOLLARS

TOUR DE IOWA AGRICULTURE ISA SHOWCASI N G T H E “AG ” I N RAG BRA I

BY LAUREN HOUSKA

W

hether it’s fuel or food, the Iowa Soybean Association (ISA) is celebrating the “ag” in RAGBRAI® this year. The one thing everyone sees along the route is agriculture, through soybean and corn fields, pig and poultry barns, cattle lots and more!

RAGBRAI, or the Register’s Annual Great Bicycle Ride Across Iowa, is the nation’s largest and best-known bicycle ride. While Iowa may not have beaches or mountains to see, the beautiful countryside and Iowa hospitality has made the event immensely popular amongst cyclists, attracting riders from all 50 states and many countries. Officials are

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expecting more than 35,000 riders this year.

Every year since 1973, bicyclists have started at the western side of the state and pedaled across Iowa to the Mississippi River over a seven-day period. Towns along the route make riders feel welcome when RAGBRAI rolls through town and ISA and Iowa soybean farmers are no exception!

Building on past success ISA Director Robb Ewoldt was excited about the success of the unique, out-of-the box marketing opportunity RAGBRAI provided ISA last year. His family also hosted an

“open farm day” on their farm outside of Davenport on the Sunday after RAGBRAI — many riders stuck around to attend the event.

“I thought it was a wonderful way for ISA to reach out to farmers and non-farmers across the state by riding and wearing the ISA jerseys,” Ewoldt says. “These riders were seeing soybean fields across Iowa for seven days. Having them out to our farm was a great way to continue to engage with them and showcase the importance of Iowa agriculture.”

Even in Iowa, there's is a tremendous portion of the population with no personal connection to

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agriculture. It is one of the reasons why ISA joined with other ag groups and retailers to launch the Iowa Food & Family Project in 2011.

David Ausberger, a Jefferson soybean farmer and ISA member, says RAGBRAI is an opportunity to put a personal touch on food and farming in Iowa.

“In the past, everyone had a personal connection to agriculture — an uncle they might bale hay for or a neighbor they might do chores for. But that’s no longer the case. Any chance we have to explain what we do and how we do it is another chance to foster understanding and trust.”

Ausberger, passionate about continuous improvement of his operation and protecting Iowa’s land, water and air, says RAGBRAI is a unique opportunity to immerse riders in agriculture while they are in the midst of it that week.

“When the audience is on a bike, rather than traveling 60 miles per hour down the highway, it provides an opportunity to see real-world examples of conservation practices, farming equipment and more — it also gives the information a little more time to soak in.”

Fueling riders ISA is a Premier Friend of RAGBRAI this year. Presented

by ISA, an “AG OASIS” will give riders a chance to hop off their bikes when there is a long stretch between towns to hydrate and rest.

Riders will have the opportunity to learn about agriculture in our great state and taste some Iowagrown treats.

The AG OASIS will open on Day Three of the ride and be located at Howell’s Greenhouse and Pumpkin Patch, between Winterset and Cumming. RAGBRAI is expecting up to 40,000 riders this day alone. The Iowa Pork Producers Association (IPPA) and the Iowa Cattlemen’s Association have joined as sponsors.

Fueling transportation Equipment haulers and buses that transport the bikes and equipment will be powered by Iowa biodiesel, a renewable fuel made from soybean oil and other feed stocks.

Iowa biodiesel producers made about 365 million gallons at 11 biodiesel plants throughout the state in 2018, according to the National Biodiesel Board, making Iowa the leading biodiesel-producing state. An ABF Economics study of biodiesel production levels shows Iowa biodiesel supported about 4,700 fulltime equivalent jobs in the state in 2018 and adds $568 million of Gross Domestic Product annually.

Economic research shows soybean, corn and livestock farmers all benefit from biodiesel production.

The clean-burning fuel helped soybean farmers realize an average of $36 per acre in additional value from 2007 to 2015. At the same time, it helped lower the cost of soybean meal for livestock producers by $21- $42 per metric ton.

Fueling the future ISA is also taking the opportunity to help bring agriculture to Iowa’s youth through sponsorship of RAGBRAI’s Dream Team. The Dream Team assists youth in developing a healthy spirit, mind and body by developing a productive, positive approach to life’s challenges through preparation for and participation in RAGBRAI. ISA and the Dream Team will connect throughout the summer on rides and events.

The Dream Team rode from Des Moines to Jefferson for a campout and then back to Des Moines June 1-2 as part of its training. ISA and IPPA sponsored a cookout and several farmers attended and engaged with the youth on the agricultural sights they see riding through the Iowa countryside and why agriculture is important to Iowa and the world.

A UNIQUE OPPORTUNITY TO IMMERSE RIDERS IN AGRICULTURE WHILE IN THE MIDST OF IT.

The Dream Team after a practice ride to Jefferson.

Contact Lauren Houska at lhouska@iasoybeans.com.

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Nick Hermanson of Story City has been utilizing drainage water recycling on his farms for several years.

TIMING IS EVERYTHING OPPORTUNITIES FOR BETTER WATER MANAGEMENT EMERGE

BY CAROL BROWN

I

owa is blessed with good soils and generally adequate rainfall for growing quality crops. However, rain doesn’t always fall at the right times nor in the right amounts — too much when it’s not needed and not enough when the crops could use more.

But what if water could be saved for use during the drier periods? That is the goal of drainage water recycling, an emerging practice where subsurface drainage water is captured in the spring and stored for supplemental irrigation in the summer.

Drainage water recycling has the

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potential for multiple win–wins. It’s one of the few edge-of-field practices that have both crop production and downstream water quality benefits.

Most edge-of-field practices target either nitrogen or phosphorus reductions, but drainage water recycling reduces the loss of both nutrients. If done on a large-enough scale, drainage water recycling could also reduce downstream flooding as well as water quality concerns.

Researchers with the Transforming Drainage Project are studying drainage water recycling as part of a

five-year, eight-state project funded by the United States Department of Agriculture (USDA). Chris Hay, senior environmental scientist at the Iowa Soybean Association (ISA), is a collaborator on the project.

“Drainage water recycling has shown promise for boosting soybean and corn yields at sites in Missouri and Ohio, which have been in operation the longest,” says Hay. “But more locations and more data are needed to fully assess the feasibility, including impacts on downstream water quality and the economics of these systems.”

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Drainage water recycling in Iowa ISA is working with Agricultural and Biosystems Engineering professor Matt Helmers and his research group at Iowa State University (ISU) to better understand the potential of drainage water recycling in the state. Modeling from various Iowa locations has shown that most growing seasons could benefit from supplemental irrigation to maximize yield. Charles Hurburgh, landowner and fellow ISU professor, agrees.

“We usually have a mini-drought in the summer, and last year was a prime example,” says Hurburgh, whose farmland is in Calhoun County. “I’m convinced we left 30- to 40-bushels in the field because we didn’t have rainfall at the right time.

The presence of additional water would have had a big benefit.”

Two new drainage water recycling research projects are underway at five sites in Iowa, all of which will be monitored for crop production and water quality benefits.

One project oversees two sites near Story City, which were installed in 2014 and 2015. One site captures subsurface drainage water in a small reservoir from a field and reapplies it when needed to the same field using

sub-irrigation, where water is pumped back through the drainage lines.

The other site captures subsurface drainage and surface runoff in a reservoir that can be supplemented with water pumped from a creek for a center pivot irrigation system in the adjoining field.

Another project with the Iowa Department of Agriculture and Land Stewardship (IDALS) will construct systems at two locations in Calhoun County and one in Webster County.

One site will be on Hurburgh’s land near Rockwell City. A storage reservoir will be installed on a low area of the farm. He and his tenant (through a crop share lease) agreed to remove this area from production, which only produces a viable crop two years out of five.

“Why pay for the inputs if I’m going to end up with only a fair crop?” he says. “It’s better used this way, I think.”

The site is designed for water to be pumped from a drainage district main into the reservoir and used to irrigate an adjacent, better-drained field.

The other sites near Lake City and Dayton will each be configured differently to serve as other examples of employing drainage water recycling.

Before drainage water recycling is widely adopted in Iowa, more examples and data are necessary. These systems require a large capital investment for installation, but it has promise for real returns on the investment.

Positive for revenue “This practice has potential for actual revenue by increasing crop yields,” says Hurburgh. “That’s the way we’re going to get the nutrient problem solved, by making something economically feasible out of the problem.”

The Natural Resources Conservation Service (NRCS) has cost share options available for these systems by combining several conservation practice standards. Transforming Drainage project members and the NRCS are formulating how drainage water recycling could be funded as a single practice. ISA and partner organizations are also exploring innovative financing solutions where multiple beneficiaries could pay for conservation practices, including drainage water recycling.

Contact Carol Brown at cbrown@iasoybeans.com.

Drainage recycling utilizes ponds that hold water during the spring and early summer. The water is then applied to crop land during optimal times.

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IOWA'S SOYBEANS FEED THE STATE'S LIVESTOCK More than 116 million bushels of soybeans are fed annually to more than 22 million hogs and pigs in the state.

On average, each hog eats about 138.5 pounds of meal crushed from 2.9 bushels of soybeans.

Hog production statewide utilizes, on average, 2.8 million tons of soybean meal annually.

Raising pigs in Iowa is good for the Iowa soybean farmer. That's just one reason the Iowa Soybean Association is a proud, founding member of the Coalition to Support Iowa's Farmers.

To find out how the Coalition can help you at no cost, visit SupportFarmers.com 1.800.932.2436

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

Optimism in the Unknown

T

he Iowa Soybean Association’s (ISA) board of directors has been in the office recently for meetings, discussing and approving projects, and setting funding priorities for the 2020 fiscal year. The budgeting process hasn’t exactly been an enjoyable exercise due to reductions in overall soybean sales projections.

However, I am always impressed by the thoughtfulness of the farmers who are investing your checkoff dollars.

Elected to represent you, the 22 farmer member volunteers who comprise the ISA board have to make tough decisions.

Entrusted to “move the needle” in the competitiveness of the Iowa and U.S. soybean industries, the directors carefully consider the greater good of all who grow soybeans for a living.

They are also asked to predict the future, analyze the markets and forecast the weather while making judgment calls on project areas, which are all arguably pretty darn important.

In addition, telling the soybean industry's story can be as equally challenging. Over the past six months, ISA's communications department has

helped facilitate more than 330 media requests from news outlets all over the world.

Sitting in on a discussion during the Information and Education (I&E) committee meeting, United Soybean Board Director Tom Oswald mused on a topic regarding media interviews.

“The wrong word not said is very important,” says Oswald.

“It’s like a war not fought.”

Oswald wasn’t even trying to be quote-worthy, but his words struck me, nonetheless.

Being careful of what shouldn’t be said is just as important as being thoughtful with what you want to say. I think we all know this, but I’m not sure we all know how important it is to approach conversations with intentionality. It can quite literally be the difference between progress and war.

Your Iowa soybean farmerdirectors are often asked to speak to media on local, national and international platforms. Even if you are well-versed on a topic, this is not an easy assignment.

But time and time again, I see our farmers stepping up to the plate and speaking from the heart on topics that are often politically

fueled or personally difficult.

Tough conversations are even more difficult when placed in front of a camera.

Just as the words we use are extremely important, so is the mindset we choose to embrace as we move forward into the next phase of “business.”

This issue of the Iowa Soybean Review is focused on the future of the Iowa Soybean Association.

We asked several of our directors why the organization is valuable and what role it will play in the years ahead. Amid trade wars, floods and low prices, it would have been easy to focus on the challenges ahead, but they chose optimism in the unknown.

To bring this full circle, I think it’s important to thank the farmers out there making the hard decisions on your farms. We see you. Thank you for telling your stories, even if it’s to each other over coffee. And thank you for choosing words that propel our industry forward. But most importantly, thank you for getting up each morning to do what you do. It takes all of you in your own way to make the future of agriculture worth the hard work being done today.

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