ORGANIC FOOD-GRADE SOYBEANS - UPDATED FOR 2003

Description. Organic farming aims to create a farming system that is sustainable through practices that avoid or largely exclude the use of synthetically compounded fertilizers and pesticides. To the maximum extent feasible, organic farming systems rely upon crop rotations, crop residues, animal manure, legumes, green manure, off-farm organic wastes(excluding sewage sludge), mechanical cultivation, mineral-bearing rocks, and aspects of biological pest control to maintain soil productivity, to supply plant nutrients, and to control insects, weeds and other pests. Producers pursuing organic production must not use synthetic fertilizers, pesticides or GMO’s three years prior to becoming certified. In October 2002 the USDA approved national standards for organic certification. There is a cost share program available to offset costs associated with organic certification.
Trends in demand. Organic soybean production occurs on 0.1% of the total U.S. soybean acreage today, with acreage remaining steady to slightly increasing. As of 2003 demand for organic soybeans is lower compared to several years ago because of increased domestic supply and competition from China in the Japanese market. With the tremendous adoption of GMO soybeans, new non-GMO soybean offerings from seed companies are limited for use in this market. Contracts for organic soybeans are usually set in place before planting. Prices paid for organic food-grade soybeans are dependent on protein level, ranging from $11-18 per bushel in 2003 compared to $8- $22 per bushel in 1998. Soy milk and tofu have been the top selling products made with organic soybeans. However, there is greater interest for soy based food products domestically, so future demand for soy slurry and extruded soy flour demand will be increasing. Currently 50 percent of the production is exported compared to 86 percent in 2000. In the next few years new nutritional traits are expected to be released which may positively change the demand for organic food-grade soybeans.

RECOMMENDED PRODUCTION MANAGEMENT PRACTICES

• Seed Selection. The contractor generally specifies several non-GMO soybean varieties for use. Select the variety that matches your particular geographical latitude. Also consider personal management or cultural practices.
• Site Selection. The crop rotation pattern will designate which fields go into soybean production.
• Crop Rotation.Organic systems generally require a five-crop rotation of corn, soybeans, cereal, legume green manure, and a fifth crop that is varied from year to year.
• Isolation. Isolation from non-organic soybeans is necessary. Allow for one fence-row width or 8-10 border rows around field. These border rows should be harvested separately and sold as non-organic soybeans.
• Seedbed Preparation. Organic production requires good seed-soil contact and moderate soil moisture for almost 100% germination and emergence. Generally, two trips with a conventional tillage tool will kill the second growth of weeds and produce an adequate seedbed.
• Plant Population.Quality yields for large-seeded, tofu/clear hilum soybeans are generally achieved with planting rates that result in 7 to 8 plants in 30-inch rows (140,000 to 150,000 plants per acre) or 200,000 plants per acre for drilled. Note: Over-population can decrease bean size and quality.
• Planting Date. Plant organic soybeans mid-to-late May, after soils have warmed sufficiently and second flushes of weeds have been mechanically destroyed.
• Fertility. Nonsynthetic processes are required to maintain balanced soil nutrients and fertility. Cover crops are the strategy most frequently used along with applications of regular mined potash, rock phosphate, or lime as needed. Compost and animal by-products are also used. Nitrogen requirements are met with legumes and animal wastes.
• Insect and Disease Management. Crop rotations are used to control insects, disease and nematodes. Bacillus thuringiensis (Bt), when applied externally (i.e., not incorporated into the crop genome) is also a self-limiting, organically approved, non-chemical alternative for insect control. Maintenance of beneficial insect and vertebrate habitats are other management strategies.
• Weed Control. Effective weed control for 30-inch row soybeans is usually provided by the following management practices: mechanically till soybeans with rotary hoe within three days after planting, again at plant emergence, and once again five days after plant emergence. Immediately start first cultivation after third pass with rotary hoe and cultivate two more times before plant canopy is formed. Solid-seeded soybeans in 7 to 8-inch rows provide quicker canopy for enhanced weed control and eliminate problems with dirty beans at harvest due to ridges. Solid-seeded soybeans should be mechanically harrowed on the 3^rd or 4^th day after planting and rotary hoed on the 7^th or 8^th day.

Harvest and Post-Harvest Management
Quality is of particular importance in the organic market place so representative grain samples are collected and sent to potential buyers throughout the harvest, drying, and storage process. Other than this, management practices are much the same as for non-organic food-grade soybeans.

• Harvesting Tofu/Clear Hilum Soybeans. Standing corn and nightshade weeds must be eliminated from the field before harvest to prevent seed contamination. Green weeds can also cause problems by coating the soybean seed with green stain. Empty augers and make sure combine, truck beds, and wagons are clean and free of foreign material. Adjust combine according to operator's manual to prevent seed damage. Monitor platform height carefully, especially in fields that are planted in 30-inch rows, to avoid picking up soil which can lead to dirty beans and contamination problems.
• Drying Strategies. Field drying to 13-14% moisture is recommended. Level off bins to provide uniform grain temperature. To eliminate moisture, migration, insect and mold growth, start fan at bin filling and run for six weeks until grain mass is at 35-40°F. Aeration reduces moisture and keeps soybeans in excellent condition. Monitor temperature through the winter and aerate in early spring to equalize at this same temperature (35-40°F) for long-term storage.
• Soybean Handling and Cleaning. Handle organic grain with belt conveyors when possible. If the situation doesn't allow for conveyors, use large augers without sharp edges and try not to handle grain any more than necessary. Remove moldy grain and vacuum bins thoroughly before filling. Keep area around bins well mowed to eliminate insect habitats. After aeration cycle, seal fan inlets to prevent air leaks and keep insects out. Make sure exhaust vents, hatches and eave openings are adequate to allow humid air to vent.

SAMPLE PARTIAL BUDGET ANALYSIS

• Per Acre Variable Cost Comparisons

• Prices:
  Prices range from $11 to $17 per bushel, depending on protein level. Average Premium = $14.00
• Increased Profit Potential Per Acre:
  GMO Soybeans:
  49 Bu/acre x $5.25 = $257.25
  $257.25 - $96.00 = $161.25 per acre GMO Soybeans

  Organic Food-Grade, Clear Hilum Soybeans for Tofu or Soymilk:
  35 Bu/acre x $14.00 = $490.00
  $490.00 - $104.00 = $386.00 per acre for Organic Food-Grade Soybeans
  
  Added Value - $224.75 per acre

• Trucking Costs: Semi - $2.00 per loaded mile (Contractors often bear the trucking cost).
  

ADDED VALUE CALCULATOR

ADDITIONAL WEBSITES

Sources:

• Department of Agricultural and Consumer Economics, University of Illinois. Farm Income and Production Cost Summary from Illinois Farm Business Records 1997.
• Experienced Grower Interviews, January - February 1999.
• Fairview Farms. The 1997 Fairview Farms Crop Harvest and Storage Guide.
• Illinois Stewardship Alliance. Progress Report on the Farming Systems Comparison Project: Yields, Economics and Water Quality.
• South Dakota State University. Agronomic, Economic, and Ecological Relationships in Alternative (Organic), Conventional, and Reduced-till Farming Systems.

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Rita Frerichs compiled the information contained in this fact sheet through interviews with experienced producers and from private sector company representatives. This information has not been validated through research carried out by University of Illinois scientists, but this fact sheet has been prepared under the technical supervision of Emerson D. Nafziger and Dale Lattz, College of Agricultural, Consumer and Environmental Sciences, University of Illinois at Urbana-Champaign. This work has been carried out as part of a project to Improve Farm Incomes and Rural Communities through Specialty Farm Products funded by the Illinois Council on Food and Agricultural Research (C-FAR)under the Special Research Initiative (SRI) on Rural Community Development.

For more information on other project activities and outputs, contact Burton E. Swanson, Department of Agricultural and Consumer Economics, 332 Mumford Hall, 1301 West Gregory Drive, Urbana, IL. Tel: (217) 244-6978; Fax: (217) 333-5835; or by e-mail: swansonb@uiuc.edu.

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Please note: This analysis is only an example of how to evaluate the economics for growing organic soybeans. Producers should use their own cost and yield estimates, plus any premiums quoted by participating elevators in calculating estimated returns for their own situation.
This is the average premium for 3 firms contacted about organic soybean marketing, with a range of $11 to $17 per bushel.