Michigan Partnership in IP Soybean Market Helps Growers Earn More From Their Acres
By DF Seeds | August 16, 2022
Growing soybeans in Michigan is unlike anywhere else in the states, thanks to the unique microclimate created by the surrounding Great Lakes. That microclimate has also created a unique market opportunity.
Michigan’s environment allows growers to produce a better quality soybean for the identity-preserved (IP) food-grade soybean market, primarily in Asia. Used in products like tofu, these markets want high-protein, clear-hilum, non-GMO soybeans.
In partnering with Michigan Agricultural Commodities (MAC), a DF Seeds dealer and IP soybean processor, we’re able to help soybean growers increase their profits and tap into this market by growing a high-yielding, high-quality IP soybean crop.
5 Reasons Why Michigan Farmers Should Consider IP Soybeans
1. Strong Yields Paired with Premium Pricing
The No. 1 reason growers enter this market is because of the premiums. Chuck Kunisch, Safety Director along with oversight working with MAC’s IP Program, says it gives many farmers an opportunity to increase their income with the acreage they have.
While IP soybean premiums are decided annually based on the market, right now growers are earning a $2 premium over conventional soybeans. And thanks to the quality of DF Seeds, their growers aren’t seeing yield drags, so they’re truly earning an additional $2 per bushel compared to what they’d earn from a conventional crop or by planting soybeans with a herbicide resistance trait.
2. Seed Proven for Michigan and IP Market
The reason soybean growers are able to achieve high yields is because of the seeds they’re growing, and it’s why MAC sells DF Seeds for those looking to enter the IP market.
“DF Seeds is a Michigan-based company, so their seeds are grown and tested in Michigan,” says Adam Geers, MAC branch manager and vice president of grain operations. “That’s why they’re a great fit for our customer base vs. some of the larger seed companies that aren’t based in Michigan.”
In fact, MAC is exclusively bringing DF Seeds into a relationship they have with Michigan State University (MSU) to introduce a new variety to the IP market.
About 3 years ago, MAC began talking with MSU about developing a high-yielding, high-protein — around 40-42% — clear-hilum, non-GMO soybean, for the IP soybean market. They’ve now identified a variety and have asked DF Seeds to produce the seed for MAC to exclusively sell.
“DF Seeds is certainly key in bringing that new variety, which is only several hundred pounds of seed, and expanding it and processing it, so we can put it on farms in the coming year,” Adam says.
3. Opportunity for Organic Transition
MAC IP soybean representative Kaylyn Land also points out that IP soybeans are a great fit for growers who are transitioning to organic. The USDA requires acres to have at least 3 years where no prohibited inputs or seed was used before they can be certified organic, also known as the transition period.
Because this time period requires growing crops organically without being sold to organic markets, it can be fiscally challenging for farmers. But since IP soybeans are non-GMO, they can be raised on those acres in transition and earn a premium, helping growers to protect their profits.
4. Premiums Still Possible if IP Soybeans Don’t Make Grade
One of the risks of entering a specialty market is that if the crop doesn’t meet spec, it can be rejected, and growers lose their premium.
Fortunately, if an IP soybean crop doesn’t meet the quality necessary for the market, MAC can find another specialty market for them to be sold into. Adam says they essentially have a three-tier program. While IP soybeans earn the highest premium, if they don’t make the grade, they can be sold into a non-GMO program at a lower premium. Below that, they also have a crusher soybean premium.
“They always have a place to take their beans,” he says. “They will never have to go through our facility and have them rejected for one thing or another. We will find another market for them and serve that customer.”
5. Market Demand is Growing
Finally, MAC is confident that the market for IP soybeans is only going to continue to grow.
“As far as our interest from our customers overseas, at this point there’s always room for growth in the program,” Kaylyn says. “We’re always looking for new customers. We always have available acres.”
And Chuck adds that, thanks to Michigan’s microclimate, the demand for IP soybeans specifically from Michigan isn’t going anywhere.
“We can produce a bean better than anybody else, and other areas of the country can’t take that production from us because they can’t take the Great Lakes,” he says. “So I see a long-term future, and a very bright future, for continuing to grow food-grade soybeans in Michigan because that market around the world and domestically is expanding.”
How to Enter the IP Soybean Market and Succeed
Becoming an IP soybean grower starts with buying IP soybean seed and securing a contract with an IP soybean processor. MAC starts IP soybean contracting for the next growing season during harvest of the current season.
IP soybeans do require a higher level of management. They need to be harvested no higher than 14% moisture, because they have to ship no higher than 14%, and they can’t be dried like conventional beans.
“If we ran IP soybeans through a dryer at the same heat that we dry conventionals, we would destroy most or all of the germ,” Chuck explains. “Our buyers are looking for a bean that they consider to be a living organism, where the germ hasn’t been damaged.”
He adds that growers may not be able to harvest as early in the morning or late in the evening when there’s dew, because dirt can stain the soybeans, which would prevent them from selling to the IP market. Growers also have to be mindful of weeds and ensure they don’t have any green weeds in their crop during harvest.
“You can’t skip any steps,” Chuck says. “They aren’t hard steps, but you can’t skip them.”
Growers that already have specialty crop experience, particularly with dry beans or sugar beets, tend to be a good fit for IP soybeans because they can adopt the extra level of management.
Kaylyn, who handles the contracting of IP soybeans and oversees the quality of every IP customer’s fields, says the biggest part of succeeding with this crop is having patience and ideally having a mentor — a neighbor or friend who has grown IP soybeans — that can help guide you.
“It’s just taking a little bit more time to do a few more things to get that premium,” she says.
Michigan Partnership Helps Michigan Farmers Succeed
Just as MAC sees a strong future in the Michigan IP soybean market, they’re also confident in their relationship with DF Seeds. The two have been working together for 14 years and see that partnership only growing stronger.
“There’s people that come and go, depending on what the market is doing. But MAC and DF Seeds both have the same goals and passion towards this industry,” Kaylyn says. “We’re in it for the long haul. We’re not here because we’re making money one year and the next year the market’s not as great. We’re here as a consistent player, and DF Seeds is as well. Because of that we can be forward thinking of ideas that continue to improve our programs.”
Chuck agrees. He personally worked with John Diehl, the founder of DF Seeds, and believes the reason both companies have succeeded in working together is because they share the same mentality.
“We both want to make money for our companies, make them successful, but also each other and our growers and end users. They’re all part of this and we all have to work together to make it work,” he says. “We’ve been in it for a long time, and we want to be in it for a lot longer and increase the business.”