By Barb Baylor Anderson
Progressive Farmer Contributor
What better way to know what soybeans your customers need than to also be one of those customers? Mike Beard, a soybean and hog farmer from Frankfort, Ind., knows firsthand what higher protein content in the soybeans he raises means for his pigs' performance.
"Hogs and chickens perform best with high-protein soybean meal," he said, noting he uses 48%. "We know with higher protein, we have better-performing animals. They grow faster and gain more weight per pound of feed," he added.
Beard, who is a United Soybean Board (USB) director and member of USB's Meal Action Team, farms in west-central Indiana. He plants about 1,000 acres of corn and 800 acres of soybeans each year, and finishes 35,000 head of hogs. Beard also has a custom manure application business.
Even though he doesn't mix and feed his own soybean meal, Beard tries to plant soybeans that most closely match the nutrition needs of his animals by selecting high-protein, high-yielding varieties. Because 97% of U.S. soybean meal is fed domestically, he said it's important to have the best quality feed possible to meet the market demands of his top customer.
"When protein and oil composition information is available from seed companies, we look for the highest protein levels we can find for our area. We generally choose three or four varieties," he said. "But the information is not always available. We need the seed industry to supply more composition data, especially as we see varieties with even higher protein levels come to market."
Beard said the checkoff-financed Soybean Quality Toolbox (www.growsoybeanvalue.com) also can guide farmers to varieties that produce high-protein levels with good yield potential. The site contains test plot data, soybean types and maturities, and estimated processed values.
PAY FOR VALUE
While Beard knows the value of high protein in animal feed, the majority of U.S. soybean farmers don't pocket that value in the price they're paid by first purchasers.
"When I market hogs, I see all of the premiums and discounts that go into determining the price per pound I receive," Beard explains. "Soybean prices are not as transparent as we would like. Not many processors give the price breakdown for soybeans. But we are affected by the protein and oil levels in the soybeans we sell even though it is not spelled out for us," he adds.
"If an end user finds out a processor has lower protein meal, that buyer will discount it. Those discounts trickle back to farmers in lower prices over time," confirms Randy Mitchell, vice president of technical services for Perdue Farms, in Salisbury, Md. Mitchell oversees the company's nutrition program as well as its live research program for chickens and turkeys.
He notes the farm's feed industry standard has been 48% protein. U.S. meal, on average, is typically closer to 47%, depending on location. "There is substantial value if protein can be increased to 48 or 49%, or as high as possible," he said. "That's because higher protein levels also mean higher amino acid levels. The ratio of amino acids is consistent in soybean meal."
At the same time, though, he cautions that pushing meal over 50% protein, for example, would be a double-edged sword for demand. "If you have 50% protein soybean meal, feeders will be able to use less in their rations and cut back," he said.
Mitchell refers to properly processed soybean meal as the "gold standard" for poultry diets.
From a protein quality standpoint, soybean meal is an excellent, balanced source of almost all amino acids, with the exception of methionine. "Soybean meal has biological value for poultry," he said.
According to a recent Iowa State University study that compared soybean meal from different origins, U.S. soybean meal had the highest content of five essential amino acids that are highly digestible for poultry and swine. Those amino acids are cysteine, methionine, threonine, tryptophan and lysine.
But the same study found Brazil produces soybean meal with higher protein levels. Because weather and geography play a role in protein content, Brazil's closer proximity to the equator results in higher protein levels than those in the U.S. Continuing to improve the protein content in U.S. soybeans may be critical to keeping the country's soybean meal competitive in a global soybean market.
"Don't overlook the value of soybean meal to livestock in China and other countries," Beard said. "We are in the lead [for market share] and don't want to lose our position on the world stage. U.S. farmers must produce a superior quality product so we can claim higher value and cement market share."
Livestock producers are always looking for the best, most consistent protein they can buy, confirms Don Camden, vice president and eastern crush regional manager at Cargill, Lafayette, Ind. "We must provide it competitively and more efficiently than other ingredients," he said. "U.S. soybean meal competes with other regions, such as South America, as well as with other types of ingredients. Gaining a competitive advantage in this global market is important."
Mitchell agrees, noting that increased soybean-meal value relative to dried distillers grains (DDGs) would push that feed ingredient away from domestic users into the export market.
"There are other possibilities for greater demand. If you look at nutrient components like energy, soybean meal is not a good source for poultry," he said. "That might be another area to improve through U.S. soybean varieties. It would do wonders for more meal use in poultry diets."
Mitchell said the U.S. soybean industry should be encouraged by end users to ensure the product it produces is what customers need so it maintains a solid revenue stream for soybean meal. At the same time, he said seed companies must enhance and raise awareness for composition.
"Over the next few years, I hope more farmers will ask about the value of protein and oil when they sell their soybeans. Then, if we market higher protein beans, we can bid the price up," Beard explains. "As farmers become more familiar with protein, processors will get recognition for better quality and profit potential. We may get to component pricing, but it is a long time coming."
ASIAN BUYERS LEARN AMINO ACID LESSON
Asian buyers touring Iowa, Kansas, Minnesota, Nebraska, North Dakota and South Dakota this past fall got a look into the value of amino acid availability in soybean meal.
Peter Mishek, organizer of the tour and president of Mishek Inc., an export consulting company, said the tour helped buying teams better understand the quality characteristics of this year's U.S. soybean crop and how amino acid profiles are affected by weather during the growing season.
Soybean samples collected on the tour indicate the 2014 crop is good quality, he adds, but has slightly lower crude protein and oil content than last year. Samples (at 12% moisture) in 2014 averaged 34.9% crude protein and 19.1% oil compared to 35% protein and 19.5% oil in 2013.
"The content of essential amino acids in the soybean will eventually be the true measurement for soybean quality for a feeder," Mishek said. "Our studies show that soybeans, which are originally a northern crop, tend to generate excess crude protein in warmer, southern latitudes. The components of this additional crude protein tend to dilute the essential amino acids."
Essential amino acids are important to feed formulations. Mishek believes the average percentage of essential amino acids in the protein fraction will be higher across the board this year because nonessential amino acids have not had the heat and growing conditions that dilute them. He calls that good news for animal feed and aquafeed formulators.
However, finding ways to profit from the better amino acid profile in the export market is difficult, said Zhijun Du, president of Chinatex Grains and Oils USA, who has participated in the tour for four years. Crushing companies that buy beans aren't the end users. Crushers have to convince feed mills and livestock companies the improved amino acid profile is worth the premium.
Mishek adds, "These visitors will bring the information to their country, and eventually, people will understand soybean value depends not only on crude protein but also essential amino acids."
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