Non-GMO soybeans offer a strong niche market for Midwest producers

VOLGA, S.D. & ELKTON, S.D. — Chris Diedrich, a farmer from Elkton, in eastern South Dakota, started growing non-GMO soybeans in 2019. “We were looking for a way to add value to the crops we already grew. This was the best option for the best value and not changing how we operate too much,” Diedrich said. ADVERTISEMENT Non-GMO soybeans make up 4% to 5% of overall soybean production in the United States. Roughly 2 million acres is for the food sector and just under 2 million is for livestock feed, said Will McNair, worldwide director for oil and soy food programs for the U.S. Soybean Export Council. South Dakota Soybean Processors have around 200 farmers, mostly from South Dakota, who grow non-GMO soybeans. They accept scheduled loads of those soybeans at their Miller and Volga locations. Non-GMO soybeans were first introduced in the 1990s. When that happened, many food manufactures decided to incorporate them into food production. SB&B Foods, in Casselton, North Dakota, started selling non-GMO soybeans into that market. They contract soybeans from across the upper Midwest. “It created a really niche market opportunity for our business. Today we sell non-GMO soybeans or organic soybeans, depending on what the food manufacturer is looking for, to many different markets around the world for many different food uses,” said Scott Sinner, vice president of supply chain at SB&B Foods. Non-GMO soybeans receive a premium at the elevator. At South Dakota Soybean Processors, that is $2.50 per bushel. “Our non-GMO program is kind of a way for producers to add a little extra cash in their pockets with the volatile markets,” said Mallory Drake, commodities merchandiser with South Dakota Soybean Processors. ADVERTISEMENT “It’s been significant when you can make $2 to $3 more in basis gains. That’s significant to your bottom line,” Diedrich said. “When you have years where the farm economy isn’t looking the greatest, it’s an opportunity for the local farmers to be able to take advantage of potentially bolstering their bottom line a little bit on their soybean production,” Sinner said. Demand for non-GMO soybeans across the world continues to increase. Sinner said increasing consumer income in other countries means more consumers looking to purchase higher quality foods. “You start seeing these different markets around the world asking for non-GMO and organic products, so we are able to supply,” Sinner said. “They are certainly still asking for GMO products too … but for our company in general, it has been a very good niche for us to give some opportunity and some value back to the farmers of this region.” Asian markets are the highest importers of non-GMO soybeans from the United States, with Japan accounting for 56% of all U.S. non-GMO food-grade soybean exports, according to the U.S. Soybean Export Council. The second largest market is South Korea, which imports 14%. There has also been some soy food growth in what McNair calls "nontraditional markets:" Europe and the United States. “They’re not huge markets,” McNair said. “You probably don’t see a whole lot of consumption of soy foods in the U.S., but you probably do see far more than you saw five years ago, 10 years ago and certainly 20 years ago.” ADVERTISEMENT Non-GMO soybeans are not just for human consumption. They can also be used for non-GMO livestock feed. The majority of the non-GMO feed market is domestic. However, the demand for that has gone down for most livestock, aside from the dairy industry, due to the rising cost of living in the U.S., McNair said. “We have consumers who previously had maybe been buying non-GM pork, non-GM chicken or non-GM eggs, but given the cost of living increase, they’ve said, ‘Well, I don’t know about that. I’m going to just stick with conventional,' or those that are really doing well in the economic spectrum are saying, ‘Let me go organic,'” McNair said. “So I think that we’ve seen a little bit of a drop-off in some of those acres.” Some producers may also grow non-GMO soybeans just to save on input costs or to help fight weed resistance. At SB&B Foods, non-GMO soybean producers have the opportunity to track exactly where their crop is going. “It’s really special for a lot of our farmers to truly understand and know where their soybeans are going,” Sinner said. “We can tell them exactly what customer they went to, what food they’re being made into and what country they went to. So it’s a pretty neat deal, as opposed to just taking something to an elevator and dumping it.” Sinner said the percentage of non-GMO soybean acres is higher in North Dakota than nationwide because there are places for producers to market the crop. ADVERTISEMENT “Some of these farmers in other states don’t have that opportunity. There are no processors close to them that are even offering contracts,” he said. “We’re fortunate in North Dakota to have some good, solid companies that are buying non-GMO soybeans, and we certainly hope that the farmers take a look at it.” Diedrich said that non-GMO soybeans are another tool in farmers' toolboxes. Growing non-GMO soybeans is not much different from conventional soybeans, with the biggest challenge being weed control. Diedrich said it’s important to scout fields early and often. “You want to get to the weeds when they’re small and actively growing. With that, we mainly use contact killers to kill the weeds, so you need to use high water volume to 20 galllons an acre, high pressure, fine droplets,” said Diedrich. “Then if you get a late flush for weeds or scapes, you can go out chemically. You can get a row cultivator, or go and walk the beans yourself or bring in a walking crew.” Diedrich said he typically sees no difference in yield between non-GMO and conventional soybeans. “And if you do, it’s normally within a half bushel to a bushel, which can be field variance,” Diedrich said. “I feel confident. They keep coming out with new non-GMO seed, so you’re getting the latest yield abilities.” South Dakota Soybean Processors surveys their growers to find out information about the producers' growing plans, what they actually planted and their crop rotations. “Our consumers like to see that, our oil and meal customers,” Drake said. ADVERTISEMENT Seed trials are being conducted by South Dakota Soybean Processors, and that yield data will be released this fall. Sinner and Drake recommend producers looking to grow non-GMO soybeans reach out to local processors. “I wouldn’t necessarily assume or make assumptions on things that they’ve heard. I would call and ask the question from a supplier. We have a lot of different varieties, for example, in our program that we forward contract,” Sinner said. “We’ll sit down with the farmer and ask them about their ground that they’re farming and about their rotation and what their storage system is like and all the different things. Then we’ll try to give them at least some recommendations on things that might work well for them.” “Go ahead and call us. We have plenty of agronomists and seed dealers that we can be able to give you contact info for,” Drake said. “Kind of the biggest thing is just there’s not much risk with it. It’s kind of you already have the tools in your toolbox to do that. It’s just different seed.”