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Korean soybean buyers visit Wisconsin fields

Sept. 19, 2013 | 0 comments

It's one thing to grow or produce a product, it's something else to sell that product, get paid for it and make money in the process. It's a subject that was the basis for much discussion some 30 years ago when I was attempting to convince dairy farmers to join the ADA of Wisconsin and contribute part of their milk check to promote dairy product consumption and sales.

The effort was challenging and proved to be successful with the formation of the Wisconsin Milk Marketing Board in 1984. I'd guess that today most dairy farmers realize the connection between marketing, promotion and production of dairy products in the U.S. and increasingly on an international basis.

The same connection exists in most every product, that's why four Koreans were looking at soybeans on two grain farms in Wisconsin last week. The foursome represented Korean food companies that wanted to see where the soybeans they bought (or might buy in the future) came from and how they might be shipped to their country.

Not by chance

The visitors didn't just fly for 14 hours from their home and end up in southern Wisconsin to drive down the country roads and drop in at Mike Cerny's 800-acre cash crop farm near Sharon in Walworth County and Ken Luety's 4000-acre corn and soybean operation at Clinton in Rock county just by chance.

No way!

They were there as the result of a coordinated effort of the U.S. Soybean Export Council (USSEC), an arm of the US Soybean Board, and the Wisconsin Soybean Marketing Board, all paid for by soybean farmers across the country.

The Korean delegation included officials representing a group of tofu cooperatives, a dairy and a food company who, according to William McNair of USSEC, "were making their first visit to a Wisconsin soybean farm."

The group listened to Mike Cerny explain his soybean (350 acres), corn (350 acres) and wheat (100 acres) production programs and took a close look at the big equipment (all operated with guidance systems) he uses to raise the crops and do custom work for other farmers.

Cerny showed them the soybean pods that would be harvested in a couple of weeks and explained how the yield would be lower, maybe 20-30 bushels per acre less than the normal 70-bushel yield due to a lack of rain during critical periods.

He also pointed out that the 160-acre field they were looking at was located on the 10,000-acre "Big Foot Prairie," known as some of the richest farmland in the world.

He also said that no insecticide or fungicides were used this year as there was no need, but that a weed killer was applied.

Specialty soybeans

After lunch in Clinton, hosted by the DeLong Company, the delegation moved to Ken Luety's 4000-acre (3000 acres of corn, 1000 acres of soybeans) Cabin Creek Farms, near Clinton and looked at a field of soybeans.

Although the difference was not detectable, these were specialty beans: Luety raises only Identity Preserved (IP), non-GMO, food grade soybeans, a type of soybean that Korean food processors require.

(Note: UW-Madison Associate Professor Shawn Conley explains that some countries, including Korea, require IP -non GMO soybeans that can be traced back as to variety and the grower.)

Although there are some added expenses in raising IP soybeans, Luety says that he has a great nearby buyer in the DeLong Company at Clinton, just a few miles away, who pays a premium ($2 per bushel over the Chicago Board price) for these specialty soybeans.

100 years of experience

The DeLong Company name comes up often when soybeans are discussed and rightly so. The family owned company has been around for over 100 years and six generations has handled feed, seed, fertilizer and farm supplies of most every kind over that period.

Headquartered in Clinton, the company operates out of a multitude of locations around the U.S. and has five divisions of agricultural sales and service: Agronomy, grain, seed, wholesale distribution and transportation.

The DeLong Co. found a niche

In the late 1980s the company began exporting specialty soybean products, William (Bo) DeLong, VP Grain Division explains. "In 2004, things changed as the price of shipping bulk ocean freight rose sharply," he says. "At the same time, the containers bringing products to the U.S. from the Far East were returning home empty and we began filling them with grain."

"By 2007 our grain division had grown significantly to become the largest containerized ag shipper in the country," DeLong say. "We are major supplier of food grade corn and soybeans worldwide. We load containers here or at Joliet, IL, ship them by rail to Long Beach California where they travel to the Far East."

DeLong explains that the containers are in two sizes: 800 (24 tons) and 1000 bushels (30 tons).

The Korean delegation left Wisconsin with at least some insight into how and where our soybeans are raised and handled, things that hopefully will enter as positives into their buying decisions.

Paid for by farmers

That's why the National Soybean Board and its Qualified State Soybean Boards (QSSBs) of which the Wisconsin Soybean Marketing Board is one, arranged the whole thing with money from every soybean sold commercially in the US.

That means farmers paid the bill. Here's how.

Like producers of other commodities, such as beef and dairy producers, soybean farmers invest half of one percent of the price of every bushel of soybeans sold at a commercial outlet, likely a farm elevator, through a national checkoff.

Half of the about $140 million collected is kept by the United Soybean Board, half is returned to the states for their use. All the money is used to fund research and promotion efforts.

During the national checkoff's nearly two decades of operation, it started as part of the 1990 Farm Bill, soybean farmers have paid nearly $1.3 billion into the checkoff.

The Wisconsin Soybean Marketing Board (WSMB) was established in 1983 as part of a Wisconsin-mandated checkoff and is governed by a seven-member farmer board of directors who oversee about $1 million in promotion funds.

The Wisconsin Soybean Association (and American Soybean Association) are membership groups that are involved in state and national policy issues aimed at the success of soybean farmers but cannot use checkoff funds.

Wisconsin exports are up and up

As with any promotion/advertising program, specific results are not always easy to judge but Wisconsin soybean exports to Korea have grown from $950,000 in 2009 to $24 million in 2012 and near $3 billion in total ag products. For sure Korean (and Chinese) food consumption trends have changed over the years as consumers seek high quality, good value, nutritional and convenient foods.

Why not Wisconsin as the source for those foods?

Like dairy farmers who do a lot of looking before building a new milking facility, the visiting Koreans will use what they learned in the soybean fields of Wisconsin to make later decisions. Isn't that the idea?

John F. Oncken is owner of Oncken Communications, a Madison-based agricultural information and consulting company. He can be reached at 608-222-0624 or e-mail him at jfodairy@chorus.net.

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