IP soybean market heats up
By Treena Hein
The identity preserved (IP) soybean industry in Canada is well situated in terms of reputation and product demand, but is experiencing short-term challenges as well.
High premium and high yield top factors in convincing growers to ‘go IP’.
The identity preserved (IP) soybean industry in Canada is well situated in terms of reputation and product demand, but is experiencing short-term challenges as well. “Canada‘s soybean growers and related industry stakeholders have been successful in proving to global customers our commitment to producing and supplying a high quality, segregated product,” says Jim Gowland, chair of the Canadian Soybean Council.
Brad Chandler and Troy Snobelen agree. “Japanese and European food markets want a traceable, clean and stable non-GMO, high quality food market that Canada is known for,” says Chandler, food products group manager at Thompsons Limited in Blenheim, Ont. “They’ve had many food scares and they perceive Canada is the top in terms of reliability.” Snobelen, president of Snobelen Farms near Goderich Ont., says, “Canadian soybeans have a reputation for better colour and quality, better protein and protein consistency. We also have good freight logistics to Asia from Vancouver, and to Europe from Halifax and Montreal.”
Canada’s reputation for quality and reliability means soybeans from this country are in demand in a growing market, says Gowland. The ample global supply of food grade beans since the late 1990s has declined, due to the growth of GM acreage in the US and South America. Non-GM supply for world markets is now coming from a smaller area, with Canada being a strong player, despite only producing less than two percent of the world’s total soybean production. “Numerous countries are firm in their demand for non-GM and are looking for a consistent supplier,” notes Gowland.
Another factor responsible for increasing demand rising slightly is the expansion of the global middle class, who want and are willing to pay for higher quality food. Two people join the middle class every three seconds. Chandler says “We can’t meet the demands of customers.” Snobelen concurs, adding, “Supply is tight for food-grade soybeans.”
All this means Canada’s IP growers are seeing the opportunity for higher premiums, says Gowland. If that occurs, and high-yielding non-GM varieties are available, buyers and Canadian exporters are hoping more growers will be convinced to “go IP.”
The years since 2003 have seen GM soybean yields catch up with non-GM yields, says David Hendrick, president of Hendrick Seeds in Inkerman, Ont. “With the large interest in GM,” he observes, “international seed companies have been more focussed on that, and now GM and conventional yields are fairly close.”
Chandler adds “We still have good non-GM varieties available to producers, but we’re going down a road where there will be less non-GM varieties developed.”
Horst Bohner, soybean specialist with the Ontario Ministry of Agriculture, Food and Rural Affairs, says “Some of the IP varieties are great for yield, others not so much. Securing high-yielding varieties is a legitimate concern, but we still have lots of good conventional varieties. Growers need to check variety performance trials, and choose the right variety for the right soil type. A premium right off the bat looks enticing, but you have to make sure your variety is a winner.”
Gowland adds “It is true some IP varieties have lower yields, but lower yields are offset by higher premiums for specialty soybeans that are associated with desirable trait for processing such as high protein.”
Hendrick considers the need for high-yielding non-GM varieties critical. “If we’re going to continue to compete, you need to offer good genetics to the farmers, and the only way to do that is through research.”
That is why when Hendrick’s Japanese buyers several years ago requested the company undertake research into this, Hendrick took action. “We have instituted a small research program,” he says. “Our buyers are acutely aware of what we’re doing, and are collaborating with us. The earlier they test the lines we’re looking at, the faster we know we’re on the right track. Our research theme is food is medicine. With a good yielding disease-resistant variety, we would like to introduce healthy traits, adding to the existing benefits of the soybean, such as natural fibre, protein and oils.” Recruiting IP growersBohner says the key to getting more producers to grow IP soybeans is to provide adequate returns for the extra effort and risk. “If the premium is high enough, producers will grow IP beans,” he says, “but there are extra hassles involved. For some growers, it’s too much work for the money. Another concern is that premiums can be lost due to lower quality seed. Cold weather, lack of moisture, insects or disease, can reduce seed quality. Certainly the buyers do the best they can, but if the beans don’t meet their quality standards, they can’t take them. That means the beans go to the crusher and no premiums are paid.
”Chandler says “As the premiums rise, hopefully we’re able to present a better risk vs. profit scenario to growers.”
Snobelen is actively working to add producers to the IP pool, with one staff member completely dedicated to this task. “Growing IP isn’t for everyone,” he says, “but in addition to talking about the premium, we try to promote the value of being in a closed-loop system, which simplifies things for the farmer."