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Soybean value-added processing takes first steps

With the expansion of soybean production in Manitoba, the hope was that soybean
processing would really take off. While a few processors have emerged, the industry
is still in its development stages.

Jordan Mills runs a soybean processing plant at Jordan Siding.

"The expansion of the soybean processing industry has flattened off,"
says Bruce Brolley, pulse business development specialist with Manitoba Agriculture,
Food and Rural Initiatives at Carman. "There are a few processors, and
a bit of on-farm roasting from livestock feeding, but currently most growers
are just shipping soybeans to the US."

Manitoba exported soybeans, valued at $13.64 million in 2002, to 20 countries,
such as the US, Iran, Finland and Belgium, up from $1.57 million in 1999. One
area of the market that is seeing processing activity is the non-GMO market.
The majority of Manitoba's soybean exports go to the non-GMO crush markets in
Europe and Japan, with a smaller amount exported to the non-GMO tofu and miso
markets. Asia accounts for 95 percent of the world consumption of food-grade
soybeans. Generally, these soybeans have been processed and cleaned to export
standards.

One company that is taking processing to the next step is Horizon Agro at Morris,
Manitoba. Horizon Agro buys, cleans, packages and exports soybeans on behalf
of Ontario based Thompsons. Much of that export goes to Japan and southeast
Asia, where the soybeans are processed into soymilk and other soy beverages.
That market is satisfied mostly by the variety OAC Prudence, a food-grade soybean
with a good sugar complex, large seed and high protein content.

Soymeal is marketed to livestock feeders.

Soybean crushing at Jordan Siding, south of Carman, takes processing further.
The plant started up in 2003, and extracts oil from soybeans for use in several
industries. Both the oil and the soybean meal are used in the livestock feed
industries, with feed processors like HiTech and Landmark purchasing the products
for feed rations. Some oil is also sent across the border to the US biodiesel
industry. Operations manager, Jakob Toews says that he is hopeful that some
of the soybean oil will eventually make it into a Manitoba based biodiesel plant.

At the Jordan Mills plant, cleaned soybeans are first moved into a surge bin
where they are heated to 38 degrees C. From there, they are moved to rollers
where the soybeans are cracked to remove the hulls. The presence of hulls in
the oil extraction phase causes lower yield because the hulls absorb oil.

Extruders further separate the oil from the meal and a final press separates
the last of the oil from the meal. The oil is sent to a centrifuge to further
separate solids and impurities from the liquid. The separated solids are added
back into the meal to produce the final cake, which is used as high protein
livestock feed.

Jordan Mills employs five workers and processes 140 to 150 tons of soybeans
per day and about 15,000 tons per month. The Jordan Mills plant produces a high-fat
meal and oil. The location for the plant was chosen because of the proximity
to soybean production and the large livestock industry in the area.

"We would like to see new varieties with higher oil content. The margin
is in the oil, we just break even on the meal, so we would like to see breeders
working on increasing oil content," explains Toews.

Jordan Mills has a list of soybean varieties that they purchase. Growers who
are interested in selling to Jordan Mills should contact the company to ensure
they have a marketable product.

Another company, BBF Enterprises in Letellier, Manitoba, roasts soybeans for
hog and dairy feed. When roasted, soybeans can be used as a complete replacement
for soybean meal, as a source of dietary protein and supplemental amino acids.
Some farmers also have their own on-farm roasters for their own use.

At Winkler, Sunny Day Products is a human food company that processes, packages
and sells a variety of nuts such as peanuts, sunflower seeds, pumpkin seeds
and soy nuts. Sunny Day started out processing sunflower seeds in 1955 as Reimer
Seeds, but was not known as Sunny Day Products until 1996. Its products are
marketed under the Sunny Day brand name from British Columbia to Ontario, as
well as into the US.

Sunny Day roasts soybeans and packages them in 113 gram bags or 25 pound bulk
bags. Retail price on 24 x 113 gram bags is $21.50. That is about $3.58 per
pound, illustrating the value in value-added processing.

As a human food, information from Sunny Day indicates, "Soy protein has
attracted quite a bit of attention recently, due to its ability to lower LDL
('bad' cholesterol) levels. Indeed, the US Food and Drug Administration recently
approved the cholesterol-lowering health claim for soy, indicating that daily
consumption of 25 grams of soy protein (6.5 grams of soy protein per serving)
may lower LDL cholesterol in those who have high cholesterol and who follow
a low fat diet."

Whether soybean processing really takes off in Manitoba, or remains a niche
market will likely depend as much on the success of soybean growers as it will
on risk-taking of value added processors. While soybean acres were 363,788 in
2006, Brolley expects acres in 2007 to be closer to 250,000. This acreage should
be stable due to farmers' desire for an annual pulse crop in the rotation within
the Red River Valley. Acres will fluctuate depending on the profit potential
from canola, as both crops will compete with each other for acres. The wild
card for soybean acres and processing, though, is biodiesel, which could change
everything.