December 2020 | Iowa Soybean Review

IOWA

SOYBEAN December 2020

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President Jeff Jorgenson, Sidney | D7 President Elect Robb Ewoldt, Davenport | D6 Treasurer Dave Walton, Wilton | D6

December 2020 | Vol. 33, No. 3

Secretary Randy Miller, Lacona | D8 Executive Committee Jeff Frank, Auburn | D4 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 Marty Danzer, Carroll | D4 Tom Vincent, Perry | D5 Morey Hill, Madrid | D5 Warren Bachman, Osceola | D8 Pat Swanson, Ottumwa | D9 Tom Adam, Harper | D9 Brent Renner, Klemme | At Large Steph Essick, Dickens | At Large Lindsay Greiner, Keota | At Large Tim Bardole, Rippey | At Large American Soybean Association Board of Directors Morey Hill, Madrid Wayne Fredericks, Osage Brian Kemp, Sibley John Heisdorffer, Keota Steph Essick, Dickens Dave Walton, Wilton United Soybean Board of Directors Lindsay Greiner, Keota Larry Marek, Riverside Tom Oswald, Cleghorn April Hemmes, Hampton Staff Credits Editor | Ann Clinton Sr. Dir., Information & Education | Aaron Putze, APR Creative Manager | Ashton Boles Photographer | Joseph L. Murphy Writer | Bethany Baratta Writer | Heather Lilienthal Writer | Lauren Houska 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.

12

Model-maker

A farmer dusts off his modeling skills to plan for 2021.

14

2020 Images of Review After an unexpected rough year, the soybean industry is moving forward.

16

Continuity Through COVID-19 ISA is Driven To Deliver through challenging times.

20

New Year, New Enrollment Opportunity After successful pilot, Soil & Water Outcomes Fund ready to grow.

On the Cover: A fresh blanket of snow covers vegetation along a stream in Boone County. After an unexpected, tough year, the scene offers a welcomed sense of calmness.

Wishing you peace this holiday season.

IOWA SOYBEAN REVIEWÂŽ | 3

Executive Insights Kirk Leeds, ISA Chief Executive Off icer kleeds@iasoybeans.com

Farmers: The Heartbeat of the Iowa Soybean Association Funded by farmers. Led by farmers. Driven to deliver results for farmers. That’s the Iowa Soybean Association. Kirk Leeds, ISA CEO, shares his insights about the funding, focus and philosophy of an association that has changed a lot – and yet so little – since its founding in 1964.

How is ISA funded?

Since establishment of the national soybean checkoff in 1991, collections under the program are tied to the net market price of soybeans – or one-half of 1%. Half of that total remittance remains in Iowa; the other funds the National Soybean Board. ISA also acquires non-checkoff funding through our subsidiaries, industry partnerships and Advocate memberships.

How does this checkoff formula impact ISA’s program focus and accountability?

Checkoff collections reflect the increase and decrease in soybean prices. Unlike checkoff programs that are tied to production, the soybean checkoff is based on the commodity’s value. As collections have increased, so have the programs and activities we conduct. Just the opposite is true when soybean prices decline.

This approach keeps farmer board members focused on enhancing the value of soybeans. For staff, it helps us see the industry through the eyes of the farmers we serve. When farmers struggle on the price side, our organization has leaner times. It’s an accountability thing.

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How does ISA establish budget and program priorities?

It starts with 22 farmer directors collectively deciding where they want to invest checkoff and non-checkoff resources. Directors participate in strategic planning to establish broad, big goals. The,n they determine specific strategies and tactics. Staff go to work to bring them a proposed budget with detailed proposals. Directors reject some, accept others and modify most.

Farmers make the decisions about where their money goes and it’s a role they take seriously. I’m proud to be associated with a board that shows up and is prepared to make decisions.

How do directors balance local and global perspectives when making funding decisions?

They come to the table and share what’s going on at their farm. They do this with a deep understanding and appreciation of the broader industry. I work with 22 directors who not only are day-to-day farmers, but also think about global, consumer, ag and geopolitical trends. This enables them to make sound decisions about investing resources. We’re always identifying future board members and leaders who can come to the table ready to contribute to the organization’s strategic direction.

How does ISA measure its effectiveness?

There is no perfect measurement, so we look at several metrics. Some

evaluate a specific tactic and whether it delivered feedback and results.

We also look for indicators of results and progress. We have several organizational goals that individually may not be entirely what we’re all about, but collectively indicate that we’re making progress.

What are they?

We talk about membership growth, leveraging outside dollars and our Net Promoter Score (NPS). If we’re adding more farmers, engaging farmers and having them speak positively about us and are attracting outside investments, then we’re doing what farmers value.

What program priorities have stood the test of time?

Farmers have always wanted a balanced portfolio of investments. This includes high-quality research that lowers the cost of production, produces soybeans in a more sustainable way and improves profitability. They want to build demand, both globally and domestically. I remember when we didn’t sell soybeans to China.

Today, look what’s happened, not just in China, but in growing markets throughout the world, including the Philippines, Thailand, Egypt, Pakistan and Bangladesh.

Farmers also value investing in information and outreach to every soybean farmer who invests in the checkoff. You can have all kinds of programs and activities, but if farmers don’t know about them or aren’t participating in them, the value of those investments and efforts is diminished.

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THANK YOU TO OUR 2020 CORPORATE SPONSORS! Iowa Soybean Association recognizes these industry stakeholders for their involvement and support in 2020. Their investment of time, talent and resources improves the competitiveness of Iowa soybean farmers and strengthens the association. Thank you.

We look forward to continuing our important work in 2021 and beyond.

Presidential Partner

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Agri Drain

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B & G Productions

Landus Cooperative

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Merschman Seeds

Renewable Energy Group Sukup

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Syngenta

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Blue Compass |

John Deere

Steffes Group

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StoneX

Thelen Public Relations

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Bunge

Peoples Company |

Stine Seeds

West Bank

unitedsoybean.org

HELPING YOU DELIVER ON DEMAND

Whether it’s improving soybean meal to outperform the competition or promoting the sustainability of U.S. soy, the soy checkoff has been working behind the scenes to help farmers satisfy their customers’ needs. 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 is maximizing profit opportunities for farmers at unitedsoybean.org

IOWA SOYBEAN REVIEW® | 7

Activate or Validate Your Membership Your investment in the soybean checkoff powers the Iowa Soybean Association. Farmer membership is available to you at no additional cost. We customize your membership to meet your needs, sending you the information and providing the resources you need to make farming decisions that keep you competitive.

Put our expertise and services to work for you — validate your membership today at iasoybeans.com/join.

your

cooperative

soybean processor

www.agp.com

Full-Circle Return RS E RM FA

HERE’S HOW THE SOY CHECKOFF WORKS. The national soy checkoff was created as part of the 1990 Farm Bill. The Act & Order that created the soy checkoff requires that all soybean farmers pay into the soy checkoff at the first point of purchase. These funds are then used for promotion, research and education at both the state and national level.

TO ELEVATORS, PROCES S N A SOR L BE S& L E S

DEA LER S

1/2 of 1% of the total selling price collected per the national soybean act & order

0.5%

Half goes to the state checkoff for investment in areas that are a priority for that state.

PROMOTION

RESEARCH

EDUCATION

Half goes to the national checkoff for investment in USB’s* long-range strategic plan.

ROI TO THE FA RMER by 73 volunteer soybean farmers, the United Soybean Board * Led (USB) invests and leverages soy checkoff dollars to MAXIMIZE PROFIT OPPORTUNITIES for all U.S. soybean farmers.

unitedsoybean.org IOWA SOYBEAN REVIEW® | 9

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

ASGROW.COM

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Bayer is a member of Excellence Through Stewardship® (ETS). Bayer products are commercialized in accordance with ETS Product Launch Stewardship Guidance, and in compliance with Bayer’s Policy for Commercialization of Biotechnology-Derived Plant Products in Commodity Crops.

Commercialized products have been approved for import into key export markets with functioning regulatory systems. Any crop or material produced from this product can only be exported to, or used, processed or sold, in countries where all necessary regulatory approvals have been granted. It is a violation of national and international law to move materials containing biotech traits across boundaries into nations where import is not permitted. Growers should talk to their grain handler or product purchaser to confirm their buying position for this product. Excellence Through Stewardship® is a registered trademark of Excellence Through Stewardship.

XtendiMax® herbicide with VaporGrip® Technology is part of the Roundup Ready® Xtend Crop System, is a restricted use pesticide and must be used with VaporGrip® Xtra Agent (or an equivalent vapor-reducing agent). For approved tank-mix products (including VRAs and DRAs), nozzles and other important label information, visit XtendiMaxApplicationRequirements.com.

ALWAYS READ AND FOLLOW PESTICIDE LABEL DIRECTIONS. XtendiMax® herbicide with VaporGrip® Technology is a restricted use pesticide. Not all products are registered in all states and may be subject to use restrictions. The distribution, sale or use of an unregistered pesticide is a violation of federal and/or state law and is strictly prohibited. Check with your local dealer or representative for the product registration status in your state. For additional product information, call toll-free 1-866-99-BAYER (1-866-992-2937) or visit our website at www.BayerCropScience. us. Bayer Crop Science LP, 800 North Lindbergh Boulevard, St. Louis, MO 63167.

Products with XtendFlex® Technology contain genes that confer tolerance to glyphosate, glufosinate and dicamba. Glyphosate will kill crops that are not tolerant to glyphosate. Glufosinate will kill crops that are not tolerant to glufosinate. Dicamba will kill crops that are not tolerant to dicamba.

Contact your seed brand dealer or refer to the Bayer Technology Use Guide for recommended weed control programs.

Asgrow and the A Design®, Asgrow®, Bayer, Bayer Cross, Roundup Ready® and XtendFlex® are registered trademarks of Bayer Group. LibertyLink® and the Water Droplet Design® is a trademark of BASF Corporation. ©2020 Bayer Group. All Rights Reserved.

IOWA SOYBEAN REVIEW® | 11

MODEL-MAKER A farmer dusts off his modeling skills to plan for 2021

BY BETHANY BARATTA

A

s a 13-year-old 4-H member, Ron Heck drew a plan of what would be his farm.

“Even when I was going to school and not yet living here, I was designing it,” says Heck, a past Iowa Soybean Association (ISA) director near Perry.

Decades later, Heck is back to the drafting table, using his architecture degree to build a model. Not a 4-H project this time, but because Mother Nature forced him to.

The Aug. 10 derecho destroyed 14 grains bins, leaving Heck with limited storage options and a long to-do list.

The priority was making five bins available to store his seed soybeans destined for Merschman Seeds in southeast Iowa.

That meant he needed to fix three bins and sell old-crop corn to the local ethanol plant to clear two additional bins.

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Based on satellite imagery and Storm Prediction Center preliminary storm reports, the Iowa Department of Agriculture and Land Stewardship believes 36 counties in Iowa were hardest hit by the derecho. Within those 36 counties, the storm likely had the greatest impact on 2.5 million acres of soybeans and 3.57 million acres of corn. Additionally, 57 million bushels of commercial grain storage capacity in Iowa were destroyed or seriously damaged.

Similar damage was made to onfarm grain storage capacity.

There are so many questions heading into 2021, including what the start of the planting season looks like with parched soils.

“It takes 20 inches of water to have a good crop,” Heck says.

“Normally, we would have 10 inches in the soil. We’ve got zero in the soil now.

“Next year, we’re starting with nothing there,” he continues. “How do you get 20, 25, 30 inches of rain without disrupting your planting and growing season?”

Drought

A no-till operator for years, Heck was forced to till under some of his derecho-ravaged corn crop.

That created a bit of a mat on the field, leaving Heck to wonder how much of that residue will decompose before planting in 2021.

The derecho further extended the damage to crops that were already stressed by the drought. He estimates a 10% to 20% loss from the drought and another 10% to a total loss from the derecho.

No-till

“It’s supposed to decay faster because we knocked it down in August, but then it forgot to rain,” Heck says. “I can’t help but notice that it’s all still there.”

ISA Conservation Agronomist Heath Ellison says the residue could benefit the dry soils this winter.

“By leaving the residue, you have a snow trap, and you’re going to see increases in soil moisture,” Ellison says. “It might be small, but when you’re talking drought, it doesn’t take a lot to make a difference.”

Farmers who didn’t see drought conditions in 2020 could still benefit from reduced tillage practices, Ellison says.

A recent conservation profitability study of 20 Iowa farmers engaged in conservation practices showed implementation of a reduced- or notill system saved between $10 to $15 per acre. One participant in the study demonstrated a two-thirds reduction in tractor hours and reduced fuel needs from 5 gallons per acre to 1 gallon per acre by switching to no-till.

“Farmers should be considering conservation tillage, strip tillage and no-tillage from a profitability standpoint,” Ellison says. “You’re reducing the number of passes in the field, wear and tear on equipment and the associated cost of your time.

It can be very cost-effective to reduce tillage.”

Profitability Heck had the year penciled out. He was no-tilling and growing seed beans, both of which would

benefit his balance sheet. He was delighted to see the Phase 1 agreement between the U.S. and China progressing, putting an end to the trade war and helping chip away at the 1 billion bushels in U.S. grain stocks. Profitability appeared to be on the upswing.

However, he could not foresee the drought or the derecho, which would pay him not through grain contracts but through insurance checks for lost grain storage and lost yield. This also meant paying higher taxes as some of the money is taxable.

It’s the effect of selling two crops in one tax year, which means paying more taxes at a higher rate this tax year, and then having a greatly reduced revenue and higher expenses next year.

“I’ll have to pay the high taxes twice — this year and next year — and wait for the refund two years out,” he says.

One bright spot this fall was a dollar rally in the corn market during harvest; Heck delivered corn directly from the field and captured the higher prices.

It certainly was a different year for the soybean market, too, says Matt Campbell, a risk management consultant for StoneX Financial, Inc. After two years of a reduction in soybean demand due to reduced hog herds because of the African swine fever and a trade war between the U.S. and China, soybean demand grew in 2020.

“In these last few years, soybean prices hit $8.50 to $10 per bushel, and we felt like that was a high

price,” Campbell says. “But I don’t think $12 soybeans is too farfetched.”

He says a large (but oversold) crop in Brazil will push global buyers to U.S. soybean supplies.

“We’re left to be kind of the only game in town,” Campbell says. That will change as Brazil’s soybeans come onto the market in March, he says.

Campbell says farmers can prepare for 2021 by knowing their break-even prices and setting sales targets above those.

“It’s very hard to outguess any single aspect of this market. For this reason, risk management is of utmost importance,” he says. “It’s important to understand your risk management tools available because all of them can have a fit during all sorts of marketing years.”

An updated model “I designed all of this; this was easy,” Heck says, motioning his arms toward his existing, but stormravaged bin setup.

But he had years to plan and budget for it.

Now, he’ll use pieces of plastic conduit, pipe, cardboard and Scotch tape to model the next setup.

“If there’s a silver lining, it’s that a few years from now we’ll have a nicer grain handling facility,” Heck says.

For Heck and others impacted by the drought and derecho this year, it’s back to the drafting table. Just in time to plan for another year.

Contact Bethany Baratta at bbaratta@iasoybeans.com.

“How do you get 20, 25, 30 inches of rain without disrupting your planting and growing season?”

— Ron Heck, farmer from Perry

IOWA SOYBEAN REVIEW® | 13

A

B

C

2020 IMAGES OF REVIEW

BY JOSEPH L. MURPHY A April Hemmes fills her planter with soybeans during the first day of the 2020 planting season.

B ISA held a trade mission to Bangladesh and Pakistan to explore export opportunities.

C Soybeans emerge from a field in western Iowa.

D Jeff Jorgenson harvests soybeans from a field that was flooded by the Missouri River nine months earlier.

E James Hepp watches as soybeans are

loaded into a trailer at his Rockwell City farm.

F John Hoffman examines soybeans at his home near Waterloo.

G Lowell Garrett, Adel, climbs into his combine during soybean harvest.

Rosemary Seward of New Virginia holds her Sapphire Gem layer chicken at the Warren County Fair.

H

I Grain bins damaged by the Aug. 10 derecho at ADM Grain in Keystone.

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D

E

G

F

H

I

IOWA SOYBEAN REVIEW® | 15

Information & Education ISA provides information tailored to the needs of Iowa soybean farmers, enabling timely

Continuity Through COVID-19 ISA is Driven To Deliver through challenging times

BY LAUREN HOUSKA

It’s easy to start counting the events that made 2020 a year for the history books.

Global pandemic. Drought. Derecho.

Election chaos. The list goes on.

The Iowa Soybean Association (ISA) recognizes the seriousness of these events and the impacts they had (and are still having) on farmers across Iowa.

ISA started the year “Driven To Deliver” results for its members, and through it all, that has remained the goal. ISA continues to bring together farmers, industry experts and partners, communities and a staff that is “Driven To Deliver” results to members in these key checkoff areas:

decision making and offering important news and updates.

As soon as in-person meetings were no longer feasible, ISA staff went to work f inding new ways to keep farmers up to date with the latest news f rom the organization and its partners. ISA conducted a series of “Continuity through COVID-19” webinars in the spring, allowing members the opportunity to ask questions and voice their concerns.

“I was able to tune into the webinar via phone while I was working,” says Lacona ISA member Randy Miller. “I appreciated the short presentations. They allowed for quick hits with valuable information that kept my interest. ISA made it easy for me to jump in and not feel like I was missing information.”

Virtual meeting options continue to be available when needed and are now a well-tested tool that can help ISA staff connect with farmers across the state.

“It is fantastic to have these new digital tools in our arsenal, providing additional ways for ISA to connect with our members,” says ISA Sr. Dir. of Information & Education Aaron Putze.

ISA also launched a new website in September. Farmers can easily activate or validate their membership through the membership tab. News content, research tools and staff contact information are now available at farmers’ f ingertips.

“ISA hasn’t missed a beat in delivering both quick hits of information and indepth stories on topics that matter most to soybean farmers,” says Putze.

Read these stories at www.iasoybeans.com/newsroom.

16 | DECEMBER 2020 | IASOYBEANS.COM

Soybean Demand ISA builds domestic demand, new uses and global exports to strengthen soybean sales.

“Our work growing domestic demand hasn’t stopped,” says ISA Director of Market Development Grant Kimberley. “We’re still supporting important research developing new uses and promoting biodiesel.”

He says ISA continues to collaborate with important demand-boosting partners, including United Soybean Board, Iowa Biodiesel Board and the Soy Aquaculture Alliance.

These collaborations yielded an

Ag Awareness array of new uses like soy-based asphalt, sustainable footwear and environmentally f riendly construction materials.

ISA engages directly with

“There are some exciting things to come next year as we deepen these partnerships and grow relationships with our fellow soybean-growing states,” Kimberley says.

agriculture.

ISA’s work building global demand hasn’t stopped, either. Learn more about ISA’s efforts to build international markets and maintain buyer relationships in the November issue of the Iowa Soybean Review, available at www.iasoybeans.com/magazine.

Soybean Production ISA conducts and shares farmer-focused agronomic and conservation research and results to improve soybean yields, prof itability and sustainability.

The ISA Research Center for Farming Innovation continues to lead research projects with farmers, taking advantage of ISA’s virtual meeting capabilities when necessary.

“Staff has demonstrated continued commitment to serving Iowa’s soybean farmers through our strong work ethic, flexibility and innovation developing, fund and deliver integrated programs for increased farmer prof its and prof itability via improved agronomics, conservation and science-based and data-driven analytics and decision tools,” says ISA Senior Director of Research

Ed Anderson. “We conduct our work in-person on the farm and at other locations and venues when possible and virtually when in-person meetings and work are not prudent.”

Their most popular webinar, “4Rs for Increased Prof itability,” provides information on how to increase prof itability using 4R Nutrient Stewardship. The fourpart series includes information f rom subject-matter experts on market updates, recent advances in nutrient management, new tools for increasing prof itability as well as methods to reduce off-target nutrient losses.

The ISA Research team also utilizes webinars to provide targeted watershed information to four priority watersheds. The information helps farmers understand their farm’s role in the success of watershed planning.

Watch these webinars at www.iasoybeans.com/research.

food-minded Iowans to enhance their trust in modern “This year has been an opportunity to work on flexibility and creativity in our content and program offerings,” says ISA Ag Awareness Manager Kelly Visser. She leads the Iowa Food & Family Project (Iowa FFP). “Instead of completely walking away f rom the in-person events we had scheduled, we bring that content directly to our audiences via their social media feeds.”

This effort kicked off with a virtual learning series, allowing consumers to hop inside a tractor during planting season and tag along on morning livestock chores. Iowa FFP also served up some virtual Iowa State Fair fun through state fair-themed recipes, featuring Iowa commodities and blog stories that dove deeper into the farmers who grow those www.iowafoodandfamily.com.

ISA’s agriculture awareness efforts also include CommonGround Iowa.

The program trains women who are leaders in agriculture to effectively share their stories with other women across the state who want to learn more about food and farming.

“Though we haven’t been able to meet consumers face-to-face, we’ve ramped up what we’re doing on social media” says Corine Rowe, a farmer f rom Dallas Center recently featured on CommonGround Iowa’s newlylaunched Instagram account. “This program has helped me learn new tools and techniques for engaging with consumers about what I do on my farm.”

Learn more about the work ISA does on the behalf of soybean farmers at www.iasoybeans.com/OurWork.

IOWA SOYBEAN REVIEW® | 17

WINDOW OF OPPORTUNITY Jim Knuth, Sr. VP, Farm Credit Services of America

Farmers urged to take advantage of historically low interest rates, rebound in soybean prices

BY AARON PUTZE, APR

E

very adjective to describe 2020 has been used. And used again.

And again.

Little wonder. The year has been unlike any other.

Continued diplomatic unrest with key export markets, relentless attacks on the Renewable Fuel Standard, massive South American soybean production, and price and supply gyrations caused by the pandemic have frayed both nerves

18 | DECEMBER 2020 | IASOYBEANS.COM

and commodity markets.

Then, Mother Nature grabbed the headlines in August when the most destructive and expensive complex of thunderstorms struck the U.S. Without warning, a derecho cut a swath of devastation across one-third of Iowa, shredding and flattening millions of acres of soybeans and corn and destroying millions of bushels of grain storage.

Moderate to severe drought also

took its toll and multiple October snowfalls added a not-so-welcomed wintery flare to fall harvest.

Indeed, 2020 gave even the most battle-tested farmers all they could handle, says Jim Knuth, Sr. VP of Farm Credit Services of America.

“It’s a difficult agricultural year to describe because there’s not another one to compare it to,” he says.

Soybean sales opportunities for farmers were scarce as prices were dogged throughout most of the year by lackluster demand and strong global supplies. Forty percent of farm income, Knuth says, came courtesy of the federal government – a direct result of trade tensions with China and a looming presidential election.

As combines rolled, lower ending stocks and better supply-side forecasts for grains and oilseeds emerged. A rally in soybean prices combined with federal disaster aid will help keep most farmers whole as they close the books on 2020.

“We’ve had a disaster year with weather, but not necessarily financially,” says Knuth. “That said, without government support, it would have been an entirely different story for a lot of farmers.”

But all bets are off for 2021.

“With no election and trade conflicts moderating, it’s reasonable to assume the federal government won’t replicate the financial support next year,” Knuth says.

Therefore, farmers must be

disciplined marketers, capitalizing on price rallies and taking profit opportunities when they arise.

He also advises making the most of record low interest rates by restructuring or refinancing real estate debt – or both.

"Farmers are realizing the power of amortization,” says Knuth.

The length of a loan, he says, makes a big difference, even more than the interest rate. When done in combination, however, farmers can lower the fixed costs of their fixed assets, retain more working capital and better adjust to low-margin scenarios.

“You can’t run a business without cash flow,” says Knuth.

“Revising the terms of loans can help.”

He expects the low-interest rate environment to remain another 2-3 years. Election outcomes, Knuth says, rarely impact the fed’s approach to interest rates.

However, without the financial equalizer of government support in 2021, farmers need to scrutinize their costs of production and drive them as low as possible.

“Reliance on government

payments can’t be part of next year’s business plan,” Knuth says. “This means projected cash flows and business plans need to stand on their own.”

Land values and cash rents are expected to remain strong. Farmland continues to be a sought-after asset to own as its return on investment beats interest rates, which are historically low.”

“We expect the trend of strong interest in owning farm ground will continue,” Knuth adds. “There’s a lot of capital in Iowa. Willing and able buyers are not hard to find.”

With harvest completed, Knuth encourages farmers to act proactively on restructuring loans, debt and amortization.

“Farmers have a window to do something,” he says. “It’s wise not to let this historic opportunity pass you by just because you may add a few years to a loan and think it will cost you money. This is not the time to be penny-wise and pound foolish.”

He also encourages farmers to consider how they will use the current grain commodity pricing opportunities to their advantage.

“We can sell old crop grain and new crop grain at profitable levels.

What a way to end 2020.”

Contact Aaron Putze at aputze@iasoybeans.com.

“We’ve had a disaster year with weather, but not necessarily financially. That said, without government support, it would have been an entirely different story for a lot of farmers.”

— Jim Knuth, Sr. VP, Farm Credit Services of America

IOWA SOYBEAN REVIEW® | 19

New Year, New Enrollment Opportunity After successful pilot program, Soil & Water Outcomes Fund ready to grow

BY HEATHER LILIENTHAL

W

hile the Soil & Water Outcomes Fund will be enrolling new farmers into the program starting next month, Matt Ollendieck already has a year’s worth of experience under his farm’s belt. After participating in the fund’s pilot program in 2020, he’s looking forward to the future.

The Soil & Water Outcomes Fund provides financial incentives to farmers who transition to on-farm conservation practices that yield positive environmental outcomes. These outcomes include carbon sequestration in soil, water quality improvements and more. The program provides new

market opportunities and revenue streams for farmers by aggregating and selling the outcomes to private and public beneficiaries.

The Soil & Water Outcomes Fund is a partnership of AgOutcomes, Inc., a subsidiary of the Iowa Soybean Association, and ReHarvest Partners, a subsidiary of Quantified Ventures.

AgOutcomes leads the agronomic and farmer relations elements of the operation and ReHarvest Partners manages the financial and contractual aspects of the Fund.

Farmers can learn more and enroll at www.theoutcomesfund.com.

Matt Ollendieck, a no-till farmer, planted cover crops of 25 % of his acres last year. He also has a cover crop seed business.

20 | DECEMBER 2020 | IASOYBEANS.COM

Ollendieck farms with his grandfather, father and brother near LaPorte City. About 25% of the no-till operation has been seeded to cover crops. The opportunity presented by the fund closed the gap on the remainder of the farm.

“We decided to make the big step and enroll the rest of the acres in the program, taking us to 100% cover crops on our fields,” says Ollendieck. “For the family, the conservation benefit is key.

“We took the first big step 20 years ago when my dad pushed my grandpa to transition the farm to no-till,” he says. “And being a part of the Soil &

Water Outcomes Fund is rewarding, knowing that entities and municipalities, like Cargill and the City of Cedar Rapids, are supporting our efforts. It’s a unique team approach.”

Adam Kiel, AgOutcomes executive vice president, is looking forward to the program’s expansion. In 2020, just under 10,000 acres were enrolled.

“Participating farmers received payments ranging from $25 to $45 per acre, with an average of $37 per acre,” explains Kiel. “This is possible by stacking together payments for carbon sequestration water quality outcomes from the same acre. Farmers are also given the opportunity to decide what works best for each field, and they often combine or stack practices, such as reducing tillage and fertilizer rates and adding cover crops. The annual payment to farmers is based on the environmental outcomes produced, so the more outcomes produced the higher the revenue opportunity.”

When a farmer enrolls acres into the program, the Soil & Water Outcomes Fund runs models, quantifies the estimated carbon sequestration and water quality benefits, and structures customized payment to that field.

The amount depends on how many environmental outcomes are produced.

“We offer the opportunity for farmers to maximize outcomes per acre and enroll as many acres as they want,” says Kiel. “The payment is structured according to what they produce.”

Kiel said there are several outcomes customers, including Cargill, the cities of Ames and Cedar Rapids, Iowa Department of Agriculture and Land Stewardship and USDA-NRCS. Cargill was the first carbon outcome customer to participate.

“Working with Cargill has been a natural partnership and aligns with

Lance Lillibridge was attracted to the use of private-sector funds attracted him to the Soil and Water Outcomes Fund.

Cargill’s goals of increasing sustainable farming practices,” says Kiel.

Lance Lillibridge farms near Vinton and was already strip- and no-tilling all his acres. He is active in the Middle Cedar Partnership Project, so the pitch from Kiel and Jason Gomes, independent crop advisor, to add new conservation practices through the Fund instead of depending on cost-share was attractive to him.

“I found that the fund lined up with my own ideas and goals for protecting soil health. The structure of using private-sector funds sounded even better,” says Lillibridge. “I understand that assisting with conservation costs makes a difference, but I really like the different nature of this endeavor.”

He laughs and adds, “My first honest reaction was, ‘Finally! Somebody really gets this!’”

Lillibridge added cover crops to 100% of the operation’s acres. He’s also grazing cattle on some of those cover crop acres, which takes the value even further for him.

The return on the investment of

any conservation practice requires commitment, he adds. “Even when I started with tillage changes, I promised myself to stick with it for five years.

I needed to remind myself of that commitment after year one …and two.

But the benefits I now see have been worth it.”

He says the payments are important to the longevity of the conservation efforts on his farm.

“It would be hard not to have this program to continue the work,” he says as he looks to re-enrollment.

“Providing these outcomes is good for my business and allows me to keep investing in my ground. That’s where our investments and returns truly come from. Keeping the soil in good condition is simply good business.”

Ollendieck, like Lillibridge recognizes the importance of continuity and remaining focused on the long-term vision of and commitment to the new practices.

“This can become a competitive market, especially looking at how the carbon market could take off,” he says. “There is more potential for us to capture value with the fund.”

Contact Heather Lilienthal at hlilienthal@iasoybeans.com

IOWA SOYBEAN REVIEW® | 21

ROAD MAP TO INNOVATION ISA research staff, farmers outline path for future work

BY HEATHER LILIENTHAL

D

ecember is the time for the Iowa Soybean Association Research Center for Farming Innovation (RCFI) staff members to wrap up current projects and map out future opportunities.

“It’s an exciting time as we head into 2021, understanding what we learned this year and working closely with our farmer participants,” says Roger Wolf, director of ISA Research Center for Farming Innovation. “We are dedicated to offering them options and also following their lead.”

He says it is why ISA follows a “road map and opportunity zone” mentality.

“We consider projects and map them out,” Wolf says. “Working with farmers, we understand their needs, know who we need to travel with and hit the road.

Farmers need to recognize the return on their investments in the checkoff.

Having data about management practices and economic implications informs us of the opportunity zone and

22 | DECEMBER 2020 | IASOYBEANS.COM

why farmers should engage with us.”

Peter Kyveryga, ISA’s senior research scientist, describes the opportunity zone across four levels.

“We are focused on yield increases from improved practices and management, economic strengthening from increased productivity, improved crop productivity, and clear connections between supply chain and soil and water benefits,” says Kyveryga. “Addressing these levels can lead to stable or higher land prices, new payment opportunities and other long-term benefits for landowners and operators.”

Mapping it out While each quadrant of the state requires a unique approach from the Center’s field service managers, there are common issues in the state, including soil health and erosion control, precision ag, and new tools and techniques.

Overall, the team is seeking additional farmers to be involved and realize the

benefits from active engagement.

Four of the center’s field services program managers offer their perspectives on developing the road maps for research projects in their areas.

Northwest: Scott Nelson Northeast: Teresa Middleton Southwest: Drew Clemmensen Southeast: Anthony Martin Farming starts with the soil and each quadrant’s ISA research road map begins there.

Middleton says her group in northeast Iowa has soil health and precision ag tools at the top of their lists of interest.

“Many of my conversations with farmers are around interest in improving techniques, figuring out how to apply only what is needed and exactly when and where,” she says. “I think we’ll continue to see interest in variable rate and population trials in the coming years.”

She says ISA’s five-year data set of farmers participating in variable rate nitrogen trials is valuable.

“We have solid history and data to work from and help guide our trials moving ahead,” says Middleton.

According to Nelson, herbicide resistant weeds, manure management, soil health and soil erosion are of greatest concern to farmers in northwest Iowa. According to Iowa State University’s Daily Erosion project report, soil erosion estimates range from loss of 5 tons per acre annually in the most northwest corner to 13 tons per acres each year in the southwestern portion.

“These rates of erosion are not sustainable and significantly contribute to declining soil health in the region.

Some farmers fear yield loss in soil health promoting systems, such as cover crops and reduced tillage,” says Nelson. “A key topic for research is to demonstrate and develop innovative practices that address farmers agronomic concerns in these systems.

We made some very interesting discoveries in 2020 and look forward to replicating these results on more farms in 2021.”

In southwest Iowa, Clemmensen said adoption of no-till is strong and there is opportunity to strengthen adoption through cover crop implementation.

“I’d like to see an increase in the number of cover crop/no-cover crop strip trials,” he comments. “It would be a great effort to begin with farmers and build that around the state. That group mentality can move the needle.”

He knows that yield protection is

Scott Nelson Northwest Iowa

important and management changes can lead to yield barriers, but the RCFI has years of results to provide examples of how farmers have worked through those barriers. It often takes commitment to the new strategy and following the map.

Longevity is the best strategy on the soil health journey, adds Clemmensen.

“I’d like to create more long-term trials around this work that starts to incorporate a systems approach versus a “one and done” protocol.”

Just down the road in southeast Iowa, Martin says cover crop adoption has been successful in the areas in and around Washington County.

“We’d like to partner with farmers who currently using those practices to implement more in-depth research projects relating to relay cropping, cover crop termination and manure management,” says Martin.

In addition, he says farmers are seeking ways to improve seed application.

“Farmers wanting to avoid aerial application inconsistency issues are looking at drones. Drone application, like those conducted in 2020, are an area of interest among farmers,” says Martin. “This aligns with their efforts to capitalize on profitability and clearer return on investment, in addition to saving them time and field impacts from unneeded applications.”

The map may include new

Teresa Middleton Northeast Iowa

destinations, but there is a familiar focus: yield.

“We want to be more consistently breaking the 60-bushel per acre barrier,” says Nelson. “I can see great value in distributed networks of farmers, allowing them to discuss ideas and experiences in raising high-yielding soybeans along with replicated strip trials to discover improved management systems for beans.”

COVID-19 has altered the traditional meeting landscape, so novel approaches for farmer engagement will be key.

“We pivoted to put technology to our advantage since many of our usual meetings and field days couldn’t be held, we are using new strategies,” says Martin. “We are committed to keeping our farmer connections strong with virtual tours and meetings.”

Wolf is quick to offer the innovation invitation to all soybean farmers.

“We’re committed to helping farmers capture value. Imagine if it was possible to add $1 billion from innovating our cropping systems and managing our resources differently,” says Wolf. “ISA scientists are analyzing collected data from farms for years and these insights begin to illuminate the value farmers gain from participating with the Center.”

Contact Heather Lilienthal at hlilienthal@iasoybeans.com.

Drew Clemmensen Southwest Iowa

Anthony Martin Southeast Iowa

IOWA SOYBEAN REVIEW® | 23

Harvest of Community Farm community pulls together to complete the harvest

BY BETHANY BARATTA

T

he only thing certain about 2020 was uncertainty.

Markets were erratic, severe weather in some places scorched and pummeled soybean and corn fields.

All of that happened amid a global pandemic. Despite all of this, farmers did what they do best: they showed up. And when tragedy struck the town of Lacona, farmers showed up.

Nearly 50 farmers in south-central Iowa put their harvests on hold this fall to help a family grieving the loss of a husband, father, grandfather and respected farmer.

Clint Bauer, of Lacona, died as a result of a farming accident in October. He was 65 and left behind his wife Janet, sons Brandon and Nathan, and their families.

A farm community mourns “Clint was the kind of guy who didn’t get highly stressed,” says Jory Hunerdosse, who, by happenstance, became the harvest coordinator for the hundreds of soybean and corn acres left to harvest. “He took each day at a time and did the best he could.”

There wasn’t a formal phone call to the farming community inviting them to be a part of Clint’s harvest, says Hunerdosse, who knew Clint since they were teenagers.

“My phone just started ringing.”

Some farmers knew Clint as their mechanic, others as the guy who announced high school softball games.

Some knew of Clint by the farmer wave as they were headed opposite directions

on rural roads.

Fifty farmers provided combines, auger wagons, trucks and expertise to bring in the crops remaining in the south-central Iowa fields. The community took care of Clint’s harvest as if they owned those acres themselves.

“We’re grieving alongside the family and want to undo what happened, but we know we can’t,” says Hunerdosse, an Iowa Soybean Association (ISA) member. “So now, it’s about harvesting the best crop we can and doing our best for this family.”

ISA District 8 Director Randy Miller knew Clint as a farmer and parent watching his kid’s Little League team years ago. When he heard of Clint’s untimely death, he also offered his assistance.

A few of the 50 volunteers that helped with the Bauer harvest.

24 | DECEMBER 2020 | IASOYBEANS.COM

Jory Hunerdosse (right) coordinates harvest activity with Brandon Bauer.

“We all farm and want to rent the next piece of ground, but at the end of the day, it’s not about that,” Miller says. “It’s about supporting this family in their time of need. This is what rural Iowa and small-town community is like.”

Clint’s sons, Brandon and Nathan, were overwhelmed by the support from the community.

“Seeing the people and the massive amount of machinery helping us and not asking for a thing in return is impressive and uplifting,” says Brandon, a lieutenant for the Dubuque Police Department.

“It’s absolutely been amazing what the community has done to support us,” says Nathan, a special education associate for the Southeast Warren Community School District.

Also appreciated are the stories of their father. Some shared stories of their conversations with Clint at the Medora Store with a Diet Mountain Dew and Almond Joy in hand. Others recall phone calls Clint made everyone he knew to sing, “Happy Birthday” on their special day. Many shared stories of gathering in Clint’s shop over a brokendown piece of machinery.

Dream come true “He was my mechanic on speed dial,” Hunerdosse says.

He recalls a visit to Clint’s machine shop while working on a tractor with a hydraulic leak.

“It could have been a relatively

Brandon Bauer harvests with his son Rhett Bauer.

quick fix,” Hunerdosse recalls, “but it wasn’t up to Clint’s standards, so he ended up taking everything apart and overhauling the transmission.”

It was akin to the care Clint took of the farms he rented and farmed.

“His fields were clean, and his farm was mowed and tidy,” Miller says.

Clint worked with landlords to get buffer strips installed around the creeks and terraces on hillier fields. He was a role model to farmers just getting started, often serving as a sounding board to get advice on machinery or farming practices. His love of farming was cultivated in high school while serving as the Future Farmers of America president and working on a nearby farm.

After high school he was awarded a scholarship for diesel mechanic at Lincoln Tech in Des Moines. Later, he married Janet, and they purchased their farm in April 1986.

“It was at this farm where they truly settled roots and his lifelong dream of being a farmer came true,” Brandon says.

With favorable weather this year (98% of the Iowa soybean harvest was completed by Nov. 9) the community finished the harvest faster than Clint had in previous years.

Brandon and Nathan say their father’s harvest was sometimes delayed

Randy Miller covers a wagon before rain showers.

by family events, which were a priority.

“As hard as he worked, he always made sure he was there for his family,” Brandon says.

“He always made the joke that God made headlights on tractors for a reason,” Nathan says.

Underdog Clint would turn a wrench on anything, but he had his favorites: Olivers and Whites (which would later become AgCo).

Nathan says it’s because his dad favored the underdog.

Hunerdosse says his friend’s preference wasn’t the tractor, but the Detroit motors in the equipment.

“If you asked him, they were the most powerful,” Hunerdosse says. They were also one of the loudest, he recalls.

Celebrating Clint Harvesting Clint’s crops, Miller says, was a celebration of the kind of guy — and farmer — Clint was.

A few days this harvest, when the weather and their job schedules aligned, Nathan and Brandon fired up their dad’s favorite machines to help finish a harvest he started.

The 9720 White combine and the 1950 Oliver, with a Detroit diesel, led the way.

Contact Bethany Baratta at bbaratta@iasoybeans.com.

IOWA SOYBEAN REVIEW® | 25

Letters to the Editor A few more stories from readers about their pickups as inspired by the October column.

Dear Ann, It was 1968 when Dad paid $2,800 and drove his new International pickup off the dealer’s lot.

From that day forward, it was known as the “International.”

Dad was a feed salesman, so the pickup pulled two different feed grinders throughout the years and hauled ton after ton of sacked feed to farmsteads. It hauled kids to school, moved kids to college and new homes. It was the pickup used for joy rides when I was in high school. Once, a combine backed into the back of the pickup, and the combine wheel ended up inside the box!

While going down the highway one day, after meeting a semi, the hood flew off and looked like a frisbee flying through the air. We picked it up, hammered out a few dents and with a tarp strap, strapped it on and headed back down the highway. When no other vehicle would start, we could always depend on the International. One had to be careful, however, when driving gravel roads. The dust was as bad on the inside as it was on the outside! One of the International’s last trips was in 2000. It drove my dad to his final resting place. Our son Klint inherited the truck, and it now adorns his yard, near Bedford, Iowa.

Rick Bissell, Corning, Iowa

Dear Ann, Our 2004 Chevrolet truck came to us used from a Ford Dealership. The “Mrs.” nicknamed the truck “Rickety Boom” from a childhood book character, "Rackety Boom."

The truck is white, trimmed in rust and the front bumper is dented, courtesy of an icy patch one winter day. The truck’s bed wears a few caved spots from where eager cows impatiently found their feed buckets.

The interior of this farm truck is unique, to say the least.

Picture a bench seat – the driver’s side is worn through the cloth covering, worn through the foam padding down to the metal frame. The glove box is filled in papers and receipts, possibly dating back to 2010 or longer. Years have passed since the interior has been dusted or the windows washed. The passenger’s sun visor is held in place heavy-duty rubber bands.

However, “There ain’t nothing wrong with the radio!”

One of its classic stories was when our hired man was driving Rickety Boom down the road, and the back glass shattered into hundreds of pieces. That was an experience he doesn’t want to repeat.

With age, it has required more and more trips to the mechanic but always returns to the farm ready for whatever comes its way.

Much like the farmer who owns this truck, it works daily, regardless of the weather and has been a stable part of a longtime farming operation.

— Theresa Voss, Chariton, Iowa

26 | DECEMBER 2020 | IASOYBEANS.COM

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

Oh, What a Year!

T

here is stress attached to the unknown. At least there is for me.

I’ve got a free-spirit, and I love spontaneous adventures, but I’m also the one in the passenger seat holding the road map. It’s important to me to know where I’m going once I’m on my way. But, this year just felt like an outdated atlas. The vision I had at the beginning of 2020 served of no value when things started going off the rails. Like it or not, I’m just along for the ride.

It’s strange to think that we are living during a historical time.

Our story is being written, and we are navigating the best we can without knowing what’s ahead.

Future generations will study and analyze this time, and yet, they will never truly know what it has been like emotionally, financially and spiritually.

As a result, this realization has made me feel more connected to my ancestors. I’ve thought a lot about

what my grandparents experienced during the Great Depression. I’ve empathized with the mothers of the past who worried about their babies getting polio, influenza and other viruses. And I’ve felt admiration for their faithfulness, resilience, ingenuity and pure determination.

It’s part of my nature to find meaning in hardship. If you have to go through something difficult, I believe you’d better embrace the lessons presented to you. And there are always, always, lessons to be learned.

So many of you have experienced true loss this year. Loss of connectivity. Loss of crops and equipment. Loss of income. And most tragically, loss of loved ones. It can be hard to see goodness during these times, but it’s there, hidden in the depths of hope.

In this issue of the Iowa Soybean Review, we took an in-depth look at the year related to agriculture. We’ve attempted to showcase some kindness

amid sadness and some continuity during extreme shifts of normalcy.

It’s been a tough year for our industry, but we want you to know we are virtually walking beside you and working on your behalf.

As we close out 2020, I’ve never been so excited to celebrate and enjoy the holiday season. Christmas has always been magical to me, but this year just feels more meaningful.

Perhaps it’s the renewed appreciation for my family and our good health.

Or maybe it’s merely choosing to focus on joy right now.

Shifting our focus toward new beginnings, I’d love to know what you’re looking forward to this season.

I pray joy comes naturally for you, but if you are working a little harder at it this year, let me know how you’re doing it. I think we could all use some inspiration.

Stay well, my friends. See you next year.

I am incredibly grateful to have heard f rom so many of you about your farm trucks. If others of you have stories, send them in. If you have a comment about a story in the magazine, I want to hear about it. If you have thoughts about farming or agriculture in general, hit me up. It all matters to me.

Ann Clinton

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Aclinton@iasoybeans.com

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515-251-8640

IOWA SOYBEAN REVIEW® | 27

AT THE HEART OF IT. EVERY FARMER HAS THEIR REASON FOR WHY THEY DO WHAT THEY DO. FOR ME, IT’S FAITH, FAMILY, AND FARMING. I CARE ABOUT HONORING GOD AND FULFILLING HIS PURPOSE IN MY LIFE, IN MY FAMILY, AND IN THE BUSINESS OF FARMING AND AGRICULTURE.

SCOTT BECK, PRESIDENT