17 minute read
Demand
DEMAND DRIVERS
Opportunities abound for soybean oil
BY AARON PUTZE, APR
What was once a backseat driver in creating soybean demand and profitability now has two hands firmly on the wheel.
Soybean oil demand is booming, a trend that’s expected to have staying power.
“We’ve come a long way in a short time in terms of building markets for soy-based energy,” says Grant Kimberley, a farmer from Maxwell and Iowa Soybean Association’s (ISA) senior director of market development. “Whether for fuel or as protein for livestock and people, demand is growing, and there’s reason to be optimistic as we look to the next two to three years.”
Demand drivers for soy abound, benefiting soybean and livestock farmers and the environment.
Whole soybean sales to China and other key buyers are on the uptick. Soybean crush is running strong, thanks to improvements in the global economy and a rebuilding of pig herds in south Asia after being decimated by African Swine Fever.
Stepped-up efforts to curb carbon emissions domestically are also fueling demand for cleaner energy alternatives, including biodiesel and renewable diesel.
More conversations about carbon and climate are timely topics for the biodiesel industry to be involved in, says Donnell Rehagen, CEO of the National Biodiesel Board (NBB).
Winning formula
“Renewable diesel, biodiesel and sustainable aviation fuel are making headlines,” he says. “All drive growth for oil stocks, and that’s a winning formula for soybean farmers.”
The proof is in the numbers. Kimberley says biodiesel demand accounts for 13% of the net market value of soybeans, or $1.69 per bushel, when cash prices hit $13.
More demand resulting from higher biodiesel blends, renewable diesel and new uses will only bolster these numbers.
Kimberley, who also serves as Iowa Biodiesel Board’s (IBB) executive director, says biodiesel blends up to B20 can be used in any diesel engine, and some users can even go up to 100%. B20 burns cleaner than petroleum-based diesel fuel and significantly reduces particulate and carbon emissions.
“Many of the old concerns about using biodiesel no longer apply,” he says. “It’s a better product today than 20 years ago, as are the engines it powers. Experience also goes a long way in knowing how to use it.”
Representatives of the biofuels industry, including Kimberley and Rehagen, gathered in Missouri in August to pinpoint obstacles and opportunities for biomass-based diesel like biodiesel and renewable diesel. All agree the glass is half full for generating more demand and profits for soybean growers.
They acknowledge the rise of renewable diesel and the concerns some have about its impact on future biodiesel demand and competition for feedstocks. But Rehagen is quick to add that much of the angst is misplaced.
“While renewable diesel and biodiesel require different production processes, both use the same feedstocks. For soybean oil and values, growth in renewable diesel will be a positive driver for soybean usage and prices,” he says.
While the NBB advances the entrance of soybeans into renewable diesel markets, they’re also involved in conversations about electrification of passenger vehicles and public transportation fleets.
Electrification struggles
David Cobb, NBB’s director of federal affairs, says calls for full-on electrification of the nation’s over-theroad fleets are premature.
According to Cobb, credible studies demonstrating the feasibility of rapidly expanding the number of electric vehicles are lacking. In California, home to some the nation’s most progressive carbon reduction policies, just 2% of over-the-road passenger vehicles are electric powered.
“It’s going to be a long road to large-scale electric vehicle usage,” Cobb says. “In the meantime, let’s talk about options and opportunities to decarbonize today. The answer is cleaner-better-now biodiesel and renewable diesel.”
Like renewable diesel, sustainable aviation fuel will drive oil demand growth. Just one domestic producer of sustainable aviation fuel is operating, but that’s likely to change as more airlines commit to reducing carbon emissions. Sustainable aviation fuel will most likely rely on soybean oil. Farmers, flyers and the environment will all be beneficiaries, he adds.
“Airplanes can’t be powered by electricity,” Rehagen says.
Federal and state legislation prompted by growing public interest in reducing the nation’s carbon footprint are also powering demand for energy made with soy.
Legislation seeking to boost renewable fuel production and usage in Iowa will likely be discussed again when legislators return to Des Moines in January.
Cobb says biofuels interests are also gaining traction in infrastructure packages being debated by Congress. Among them is a $1 billion program to increase the number of school buses powered by biodiesel and electricity.
NBB, IBB, ISA and the American Soybean Association are also advocating for a Biofuel Infrastructure and Agricultural Product Market Expansion Act and three-year biodiesel tax credit extension (the latter through Dec. 31, 2025). Both measures are garnering increased Congressional support.
Rocketing demand
Biodiesel and renewable diesel markets accounted for almost 2 billion gallons of demand in 2013. Last year, those totals rocketed to nearly 3 billion.
Demand is up 4.9% in 2021, exceeding 2020’s growth of 4.1%.
“The growth last year occurred despite a nearly 8% decrease in U.S. diesel consumption,” Kimberley says.
Every conversation about demand has an impact at the farm gate, a reminder that soybean farmers are indeed involved in a national and international business.
Demand for soybean oil increases the amount of soybeans crushed. More crush produces additional inventories of soybean meal, an efficient and readily available protein supplement for animal, poultry and fish feed. Livestock producers are the ultimate beneficiary of this formula.
“Clearly, it’s an exciting time for feedstocks,” says Mac Marshall, United Soybean Board vice president of market intelligence. “It’s a point we make often and one that was envisioned 20-30 years ago when discussing how to find markets for the oil.
“But we can’t rest on our laurels,” he’s quick to add. “We must be vigilant about expanding domestic and global markets for soybean meal. If we don’t, we risk creating bottlenecks in the system, adversely affecting soybean crush.”
Foresight proven
Rehagen says the world of opportunity involving soy proves the wisdom, foresight and investment soybean farmers have made in the fuel industry over the past three decades.
“There’s a lot of momentum because soybean farmers stepped up and took a seat at the table long before most realized the potential of the oilseed. They took the wheel by making a financial commitment to play a key role in home-grown, renewable fuel. It’s an investment that’s yielding a bountiful harvest.”
Contact Aaron Putze at aputze@iasoybeans.com.
ISA farmer-members enjoyed an evening of socializing at 99 Bottles Winery and Vineyard near Garner.
GATHERING PLACE
Social interaction, education and policy centered around eight ISA district meetings
BY KRISS NELSON
The Iowa Soybean Association’s (ISA) 2021 district meetings have wrapped up, and it was a whirlwind summer for ISA’s producer services team, staff and board members as they hosted eight meetings throughout the state.
Sponsored by FMC, the events offered a variety of socializing and educational opportunities – something different from previous years.
ISA’s Producer Services Coordinators Bre Wagner, Carrie Kelly and Whitley Frieden were excited to be back in person this year.
“It’s been great to see so many members come out and join us for our district meetings,” says Wagner. “With meeting activities ranging from a boat tour to a baseball game, hearing from Bill Northey to touring a fish farm, there were all kinds of options for folks to try something new this summer.
After a year of no meetings due to COVID-19, it was great to see people and have the chance to catch up in person.”
Mike and Barbara Henning, farmermembers from Waterloo, say they enjoyed the opportunity to learn more about ISA’s efforts and catch a baseball game.
“I appreciated the brief updates from staff members and the one-onone discussions,” Mike says. “I really appreciate ISA’s research studies and reporting, especially as they relate to environmental issues. Information on emerging production traits was also of interest. It is nice to get to know who I can call on for questions in the future.”
David Rossman attended the district meeting properly titled “Shake the Lake” as the group set sail on Lake Okoboji.
It wasn’t your typical setting for the district meeting, but Rossman says he enjoyed the change. Getting together with other soybean producers as well as state and national soybean industry representatives was a unique opportunity.
American Soybean Association (ASA) Director Brian Kemp and United Soybean Board (USB) Director Tom Oswald spoke
to the group, providing national checkoff updates, while District 1 Directors Chuck White and Brent Swart, and Stephanie Essick, director at large and ASA member, spoke on behalf of ISA.
“Each of the board members gave a little talk, and although I have known all of them personally for quite a while, I was really impressed with the information they presented,” Rossman says.
Perry Black from Barnum attended two district meetings this year, taking the opportunities to attend the roundtable with Bill Northey, former USDA Undersecretary, and tour Eagle’s Catch tilapia farm in Ellsworth.
Black says he appreciates the opportunities given to attend ISA district meetings.
“The Iowa Soybean Association is out there, staying engaged with producers and keeping us in the know for what is going on. It always gives me a chance to talk to people that can carry questions that I have also back to their meetings,” he says.
Following a year of delayed and cancelled events, farmer members were eager to engage, says Michael Dolch, ISA public affairs director.
Dulch educated the groups about trade, biofuels, taxes and infrastructure since the issues are top of mind for soybean farmers.
“We continue to share the concerns and real-life examples they have raised with our state and federal policymakers to let them know how concerned farmers are about various legislative proposals and what they could potentially be forced to pay as input costs chase higher crop prices,” he says.
Dolch says farmer members are happy that improvements are being considered to physical infrastructures, such as roads, bridges, locks and dams, but are approaching each proposal with cautious optimism.
“They don’t want infrastructure upgrades to happen at the expense of stepped-up basis being eliminated or other devastating tax changes,” he says.
Regardless of policy or issues facing farmers today, Dolch says the farmermembers all brought a positive vibe to the meetings.
“There was a great turnout, which goes to show they have missed the engagement,” he says. “The fellowship and camaraderie were a highlight throughout the meeting series.”
Contact Kriss Nelson at knelson@iasoybeans.com.
Whitley Frieden, ISA producer services coordinator, addresses a group of farmer-members during a district meeting held near Gardner at 99 Bottles Winery and Vineyard.
— Brent Renner, at-large ISA district director
— Scot Bailey, District 7 ISA director
— Perry Black, farmer from Barnum
CONSERVATION CONNECTIONS
ISA’s new conservation agronomists assist farmers and ag retailers with conservation efforts
BY KRISS NELSON
The Iowa Soybean Association (ISA) is reaching out to more farmers and landowners through a conservation agronomist network launched in August 2020. Its goal: to expand conservation efforts in the state through partnerships and expertise.
There are four conservation agronomists at ISA, with two having relationships with ag retailers that are members of the Agriculture’s Clean Water Alliance (ACWA).
“We have a long history working with ACWA, and we have explored a number of different ways to engage sales agronomists more in conservation delivery,” says ISA Senior Field Services Program Manager Heath Ellison. “We see an opportunity to use the sales agronomy team to reach farmers we don’t normally reach and to assist sales agronomists with potential conservation programs for their clients.”
Ellison says the team is tasked with three primary goals:
1Deliver conservation
opportunities to the farmer by providing technical knowledge and connecting them with financial assistance, such as cost share programs.
2Build the sales
agronomist relationship by utilizing their network and relationships with farmers to promote agronomic and conservation discussions.
3Be the in-house
technical expert the sales agronomist and farmer rely on.
Conservation agronomists are currently funded through grants.
An additional goal, Ellison says, is for this effort to demonstrate the value of a conservation agronomist in the ag retail system.
“We have a vision of every ag retailer in Iowa having a conservationist agronomy team member on staff,” he says.
“ISA’s conservation agronomists have a great opportunity to demonstrate the value in having the positions within the ag retail system.”
Dustin Brucker
Dustin Brucker is located at ISA’s office in Ankeny, and is the one conservation agronomist without a specific ag retail partnership.
He works with farmers statewide, although his emphasis is working within the Raccoon River Watershed and supporting others on the team.
Brucker says he helps farmers understand which practices could have the most impact given their local conditions and operational goals.
Another large part of Brucker’s position is helping build awareness of the financial opportunities available in Iowa for farmers to help preserve their land.
“I am here to guide farmers and landowners to Iowa’s financial opportunities and help them navigate the financial process,” he says.
Rosie Roberts
Rosie Roberts is the newest Conservation Agronomist. She is partnering with Cooperative Farmers Elevator (CFE) at its Rock Valley location.
“I serve as a technical resource to all their agronomy support staff and farmers to help implement new conservation practices and be a little more environmentally conscious and focus on how profitability comes into play with those conservation practices,” she says.
Roberts, who is from central Illinois, has been meeting with CFE agronomists and farmers familiarizing herself with the different farming practices in northwest Iowa.
Ryan Johnson
Ryan Johnson is officed at Ag Partners LLC’s Calumet location. This location situates him between two targeted areas in northwest Iowa, the Floyd River and Headwaters of the North Raccoon watersheds.
“There is a lot of excitement about conservation right now. With the carbon credit buzz, that’s an exciting thing,” he says. “We can make a difference by showing farmers they can have conservation on their farms and be profitable at the same time. We are trying to walk them through the process and be as helpful as we can.”
Joseph Wuebker
Joseph Wuebker leads the Iowa Department of Agriculture and Land Stewardship (IDALS)-funded ACWA Farm to River Partnership project. He also works with sales agronomists from Landus Cooperative, NEW Cooperative and Nutrien Ag Solutions.
“These sales agronomists are smart. They are good at what they do, and to be in a position where they feel comfortable getting information from us is a big thing. We are a trusted partner and advisor to farmers,” he says.
Jeff Schleisman is one of NEW Cooperative’s agronomy sales specialists who is working with Wuebker.
“There is always something new with cover crops. It is a topic of conversation, especially in our neck of the woods with the Racoon River Watershed,” Schleisman says.
Once that conversation happens, Schleisman connects Wuebker with the producer.
“The beauty in that is, instead of me having to take on one more thing in the ag retail industry to manage, he takes that relief off me,” says Schleisman. “Joe is here to walk us through the rest of the process and do a heck of a lot better job than I can.”
With the partnership, New Cooperative is able to have a conservation agronomist in its trade area to build relationships with our local agronomists and farmers to make conservation practices easier to adopt and execute, says Dan Dix, NEW Cooperative general manager.
“We can work together to promote conservation practices and find potential cover crop uses.”
Wuebker says there is a three-year project goal in his area to raise 7,000 acres of cover crops a year and to implement 20 edge-of-field practices.
Wuebker is also helping with area water monitoring.
“I compile data so we can see what is actually going on out there,” he says.
Ellison says it has been a fascinating year watching these different methods within the conservation agronomist program develop. There are plans to expand the network.
“By having this field-based expertise, we are influencing the adoption of the practices we want to see grow, practices that are important in achieving the goals of the Iowa Nutrient Reduction Strategy,” he says. “We believe that engaging the ag retail system in this way has the potential to make significant impact on conservation adoption and Iowa’s water quality goals.”
Contact Kriss Nelson at knelson@iasoybeans.com.
The Last Word
Editor’s Note by Ann Clinton aclinton@iasoybeans.com
Estate Auction Thrills
“Is he speaking a foreign language?”
My 7-year-old nephew, Daniel, was standing beside me recently at an estate sale, listening to the auctioneer call out a choice of boxes organized on a flatbed trailer. We had combed through the offerings before the sale started, and Daniel was laserfocused on a plastic tote full of balls he’d seen down the line.
I explained to Daniel that the rhythmic chant of the caller wasn’t foreign, but it was definitely unique. I said the auctioneer had to go to a special school to learn the impressive skill of creating interest and urgency. My nephew was spellbound.
He took my bid card out of my pocket and held on to it for dear life. I can only imagine what he was thinking, but I assume he felt like he was clutching the key to the universe in his hands. Or, at least, that’s how a piece of paper with a number written in sharpie makes me feel.
By the time the crowd shuffled closer to Daniel’s treasures, he’d learned how a subtle head nod would seal the fate to his happiness. He was poised and ready when it was go time. There were a lot of items around the tote he wanted, and the bid was for choice. When the current call went over his allotted budget, he had to chance fate and let it go. But the winner didn’t pick the tote my nephew wanted, and so the process started over again. When Daniel won the bid and snatched up his treasures, I knew the child would be hooked on auctions for life.
I should interject here and say that I would have paid whatever it took to get Daniel that tote. However, it wasn’t my first time assessing an auction crowd, and I was pretty sure it wasn’t the athletic equipment our opponent was after! I’ve also learned over the years that playing it too safe won’t necessarily work out for you in the end. I have some estate auction regrets. But, I also have some wins. Let’s face it, it’s a “bid now or lose out” world we are living in right now.
I don’t know if Daniel will remember his first estate auction, but I will. It’s always fun introducing people you love to experiences that bring you joy. And it’s even more fun when you “win the bid” of whatever adventure you’re on.
What’s your auction tale? Tell me about your most satisfying win or heartbreaking pass. If I’ve learned anything about life over the years, it’s that the best memories are never about the stuff and always about the story.
Stay well, my friends.
My nephew Daniel’s first estate auction was an exciting adventure.
Editor’s Note: This issue of the Iowa Soybean Review marks the beginning of a new start. The magazine will now be published on a monthly schedule instead of eight times a year. You’ll be hearing from us more frequently and I’d like to know what you’d like to read more about. Email me at aclinton@ iasoybeans.com and let me know you’re thoughts.
