Ohio Soybean Review Winter I 2007

A Publication of the OHIO Soybean Association

Battelle

Research Team

Research and Development: Paying Off in Big Ways Ohio Soybean Association 4625 Morse Road, Suite 101 Columbus, OH 43230-8355 NON-PROFIT U.S. Postage PAID Des Moines, IA Permit No. 589

Winter I 2007

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Increasing demand for soybeans through soy biodiesel is just one of the things your checkoff does. Today, Ohio produces nearly a fifth of America’s soy biodiesel – 45 million gallons – and has more than 150 soy biodiesel distributors and 50 retail locations. As the market for soy biodiesel increases, demand for our soybeans will continue to grow. According to the U.S. Department of Agriculture, every 50-million-gallon increase in soy biodiesel production raises soybean prices 1 percent. And every penny stays right here.

To find a distributor or retailer near you and to learn more about how soy biodiesel is fueling Ohio’s economy, visit www.soybiodiesel.org. © 2007 Ohio Soybean Council (28554 pk 9/07 SB-OSR)

Winter I 2007

•

Volume 5, Number 2

The Tradition Continues … Tune in to listen to Dale Minyo, Ohio’s most recognized farm broadcaster.

www.ohioagnet.com

A PUBLIcation of the ohio Soybean Association

Features International Marketing

Page 11

A look into the current state of international marketing projects supported by the Ohio Soybean Council and the soybean checkoff and what these projects are doing to drive the international demand for Ohio soybeans. This is the first in a series of Ohio Soybean Review inserts highlighting the various soybean checkoff investment areas.

Palm Oil Provides Competition to Fill Growing Global Demand for Vegetable Oil

Page 16

Three years ago, palm oil surpassed soybean oil to become the most widely used edible oil in the world, with imports of palm oil into the United States increasing in the last several years, due in part to concerns over trans fats. Palm oil does not need to be partially hydrogenated for use in frying and baking applications like some other oils, including soybean, and as a result does not contain trans fats.

Soybeans Leading the Way: New Technology for the Future

Page 18

Ou r a n c e s t o r s c o u l d n ’ t have imagined the kind of technologies that have become so integrated into the modern farming operation. They had a horse and plow, and now we have combines using GPS. But we have yet to reach the end of the technological advances in farming, and one Ohio-based company believes it has the answer to energy production for the next generation.

Soybean Checkoff Investments Continue to Pay Off in Big Ways

Page 20

Not one, not two, but three. The Ohio Soybean Council and soybean checkoff have been awarded three R&D 100 awards, in cooperation with Battelle Memorial Institute, for research and development projects that identify new industrial uses for soybeans. The most recent R&D 100 award was presented in October for soy polyols.

About the cover The Ohio Soybean Council, in cooperation with Battelle Memorial Institute, has been awarded its third R&D 100 award for soy-based polyols, a technology developed to fully replace the petroleum equivalent in various foams, coatings and adhesives.

Only the top 100 innovations of the year receive this honor. cover credit: photo of soybeans in hand courtesy of the united soybean board/ soybean checkoff.

The Ohio Soybean Association endorses 25x’25, a renewable energy initiative.

winter I 2007

3

OUTLOOK

Message from the chairman

Ohio Soybean Association 4625 Morse Road, Ste. 101 Columbus, Ohio 43230 614-476-3100 614-476-9576 fax 1-888-SoyOhio (769-6446)

A Time to

Reflect

W

hat a complete turnaround the fall harvest has been from last year! We received over 11 inches of rain last October and this year, as of Oct. 21, less than an inch. We finished harvesting Oct. 20 – our earliest date to finish ever. The green stems in the soybeans slowed us down some, but with very little rainfall there were few delays. This is also the first time I remember putting the majority of our corn directly in the bins. Corn and soybean yields were a pleasant surprise, considering the dry summer. The plant breeders must be doing a great job with developing varieties that are drought resistant.

We installed auto-steer on both combines this fall, and the accuracy was quite impressive.

Avoiding partial strips is very challenging with two 30-foot grain heads in the same field. We set the system up to cut a 29.5-foot swath, and both machines worked from the same A-B line. The only time we weren’t combining a full swath was

4

SOYBEAN REVIEW

in point rows or finishing a field. Reduced operator fatigue was a big plus, especially at this stressful time of year.

With another harvest behind us, take this time to consider the agricultural industry of which we are all a part. If we, as farmers, want to continue to have a voice in our industry, we need to be more proactive than reactive. In today’s political environment, a well-financed group can negatively impact all areas of agriculture.

This year, the last horse slaughtering plant in the United States was forced to close. Ballot measures and legislation have been successful in banning common farming practices such as the use of sow gestation crates and other livestock housing. The push for cage-free eggs continues. A new Environmental Protection Agency rule is now in force to regulate dust generated by agricultural sources. How would you like to be told that the ground is too dry to work until it rains? Various ag groups are urging a review of this rule.

As producers of agricultural commodities, it’s time to become more involved in the agricultural groups working hard to protect our interests. It is a duty and privilege to serve and support our industry. You really can make a difference!

Jeff Sollars Ohio Soybean Association Chairman Fayette County soybean farmer

photo courtesy of the united soybean board/soybean checkoff.

President Mark Watkins, Hardin County Chairman Jeff Sollars, Fayette County Vice President Membership Jeff Wuebker, Darke County Secretary Dave Dotterer, Wayne County Treasurer Bret Davis, Delaware County Trustees Bill Agle, Clark County Jerry Bambauer, Auglaize County John Buck, Marion County Dave Dotterer, Wayne County Mike Heffelfinger, Van Wert County Kevin Homan, Henry County Rob Joslin, Shelby County Ed Lamalie, Sandusky County Lyle McKanna, Putnam County Clark Myers, Mahoning County Dale Shawk, Crawford County Sam Shuey, Clark County Bruce Simmons, Medina County Bob Slicker, Stark County Joe Steiner, Warren County AMERICAN SOYBEAN ASSOCIATION DIRECTORS Rob Joslin, Shelby County Joe Steiner, Warren County Mark Watkins, Hardin County Industry Affiliates Kathy Alvarez, Bunge NA Jim Beuerlein, The Ohio State University Andrea Guckes, Cargill Inc. Don Ralph, Ohio Farm Bureau Federation

Staff Credits John Lumpe and Kirk Leeds....Publisher Ann Clinton Millsap....Editor Jamie Butts....Editorial Manager Shelby J. Ostrander....Senior Creative Advisor Gary Usovsky....Senior Creative Advisor Jennifer Coleman....Staff Writer Rob Stewart....Publications Production Assistant David Larson....Sales Director The Ohio Soybean Review is published six times a year by the Ohio Soybean Association in partnership with the Iowa Soybean Association.

For address corrections contact the Ohio Soybean Review 4554 NW 114th Street Urbandale, Iowa 50322-5410 Phone: (515) 251-8640 E-mail: sheath@iasoybeans.com For advertising information in the Ohio Soybean Review, please contact Larson Enterprises, (515) 440-2810, or larson6@mchsi.com.

To contact the editor e-mail: aclinton@iasoybeans.com.

Comments and statewide news articles should be sent to the above address. Advertising space reservations must be made by the first day of the month preceding publication. In consideration of the acceptance of the advertisement, the agency and the advertiser must, in respect of the contents of the advertisement, indemnify and save the publisher harmless against any expense arising from claims or actions against the publisher because of the publication of the content of the advertisement.

OSA Applauds Veto Override on WRDA Legislation

by Jamie Butts

T

he Ohio Soybean Association applauded the efforts of Congress for overriding a presidential veto on the Water Resource Development Act (WRDA), signifying final passage of the bill. This bill authorizes m u c h - n e e d e d i m provements to waterways that are vital to the transport of U.S. soybeans. The Senate voted 79-14 to override the veto, and the House of Representatives voted 361-54 to override the same measure.

More than 75 percent of U.S. soybean exports move to world ports through the Upper Mississippi and Illinois river systems. WRDA legislation will authorize funding for construction of seven new locks and other critical improvements on the Upper Mississippi and Illinois rivers.

The Ohio Soybean Association would like to recognize Ohio’s members of Congress who voted to override the President’s veto and support the Water Resource Development Act. • • • • • • • • • • • • •

Sen. Sherrod Brown Sen. George Voinovich Rep. Marcy Kaptur Rep. Dennis Kucinich Rep. Steve LaTourette Rep. Ralph Regula Rep. Tim Ryan Rep. Jean Schmidt Rep. Zack Space Rep. Betty Sutton Rep. Stephanie Tubbs-Jones Rep. Michael Turner Rep. Charlie Wilson

The key to finding real profit potential is knowing where to look.

There are a range of programs offering a premium for specific soybean varieties or attributes, like Low Linolenic, Non-GMO or specific oil and protein content, to name a few.

Put the resources of the Soybean Rewards Program to work for you, check out all the opportunities at soybeanrewards.org.

Companies and processors participating in Soybean Rewards include Archbold Elevators, Inc., Archer Daniels Midland, Bunge, Cargill Inc., Consolidated Grain and Barge Co., HAPI-Ohio, Mercer Landmark, Inc., Ottawa Feed & Grain, Pioneer and Wellman Seeds, Inc.

Soybean Rewards Earning a premium just got easier.

Learn about the potential premium opportunities in your area when you visit www.soybeanrewards.org

Resources_OSR_halfpg_4C.indd 1

The Soybean Rewards Program was established by the Ohio Soybean Council as a service to Ohio soybean farmers. This message brought to you by the Ohio soybean farmers and their checkoff.

12/6/07 4:37:27 PM 5

winter I 2007

OSA Opposes Legislation Banning Trans Fats in Ohio

by Jamie Butts

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SOYBEAN REVIEW

8/28/07 2:38:12 PM

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he Ohio Soybean Association recently announced its opposition to potential legislation championed

by Rep. Tyrone Yates, D-Cincinnati, that would impose a statewide ban on trans fats. The Ohio Soybean Association (OSA) recently announced its opposition to legislation introduced

by Rep. Tyrone Yates, D-Cincinnati, that would impose a statewide ban on trans fats. According to the bill (House Bill 393), the ban would, “prohibit storage, distribution or service of any food containing trans fats by a food service operation or by a food service operation component of a retail food establishment that provides the services of a food service operation.”

Yates said his goal is to improve the health of Ohio and reduce obesity and heart disease. In an article printed in the Cincinnati Enquirer Yates says, “Legislation ought to keep pace with scientific and health developments, and that’s why the time is right.”

OSA’s position on the bill is that it does not support an outright ban on trans fats in the state but does support a gradual elimination of trans fats through a voluntary, case-by-case approach.

“I understand where Rep. Yates is coming from with trying to promote healthy eating habits and to reduce the obesity problems we hear so much about, but an outright ban is not the way to accomplish it,” says Mark Watkins, OSA president.

“From a soybean perspective, our industry is responding to consumer demand of reducing trans fats by growing low-linolenic soybeans and processing trans-fat free cooking oil, but this is something the market needs to dictate, not legislation.”

The U.S. soybean industry became actively involved in the trans fats issue when the Food and Drug Administration required the labeling of trans fats on all nutrition labels. Soybean oil accounts for almost 80 percent of all edible oil in the U.S., and the goal of the U.S. and Ohio soybean industries is to keep soybean oil at the top of the list.

By answering the call with low-linolenic soybeans, the oil processed from these beans does not have to be hydrogenated.

The low-linolenic soybeans produce less than 3 percent linolenic acid as an oil component, compared with 8 percent for conventional soybeans.

In 2007, there were over 250,000 acres of low-linolenic beans planted in Ohio – with this number likely to double in 2008.

There are currently four processing facilities for low-linolenic soybeans, and there will be more than 30 local and regional lowlinolenic seed brands available in 2008.

Nationally, low-linolenic soybeans are entering their fourth year of commercialization in 2008 and continue to grow each year. In 2007, there were 1.9 million acres planted, and it is estimated that there will be 3.5 million acres planted in 2008.

Voinovich’s View Infrastructure: A Solid Foundation for Ohio

I

wholeheartedly believe it’s time for Congress and the administration to get their heads out of the sand and realize that our nation is in the midst of an infrastructure crisis – and it’s only getting worse.

Infrastructure is an integral part of our everyday lives – it affects where we choose to live and work, the safety and quality of our commutes and our overall happiness. The startling deterioration of our nation’s highways, waterways and infrastructure systems is impacting the economy, the environment and the welfare of the American people.

As a former governor of Ohio – the state with the second-largest number of bridges in the nation – I understand the seriousness of the problem and the amount of time and resources necessary to truly protect our citizens and the economic future of our country.

Revitalizing our decaying physical infrastructure is critical to keeping Americans safe and our nation competitive in the global marketplace.

The recent bridge collapse in Minnesota illustrated the horrible result of not addressing this crisis immediately.

This tragedy proved to be a worst-case scenario, but we simply cannot tolerate this risk factor any longer.

That is why I, along with Sen. Tom Carper, D-Del., introduced the National Infrastructure Improvement Act in 2006 and again in March 2007. The bill was passed out of committee the day before the bridge collapsed and passed by the full Senate the day after the tragedy.

My bill gets to the heart of the infrastructure crisis by establishing a commission to determine and identify the infrastructure needs of our country and estimating the costs. It will then be the job of Congress and the administration to implement the plan. This legislation is an important step toward giving our nation’s crumbling infrastructure the attention it deserves.

In addition to the Infrastructure Improvement Act, I have been an active voice on the importance of fully funding our nation’s roadways, especially with my responsibilities as a member of the Senate Environment and Public Works Committee. In 2005, I was a co-sponsor of the highway bill, a long-overdue piece of legislation that funded several vital transportation projects in Ohio.

The 2005 Highway Bill was the best in our state’s history, and it significantly helped increase the reconstruction efforts in Ohio. Under the bill, Ohio received $6.6 billion – a $1.7 billion increase or 36 percent over the last bill. But nationally, it fell short of the level needed to even maintain, let alone improve, our highway systems. According to the Department of Transportation, the bill provided $70.4 billion below what is needed to improve, and $38.8 billion below what is needed to maintain, our highway system.

The Infrastructure Improvement Act and the highway bill are both important first steps toward addressing the infrastructure crisis. Hopefully the next highway bill meets the needs of our critical infrastructure so we don’t

Sen. George V. Voinovich

have another tragedy like the one in Minnesota.

Water infrastructure has also been a long-standing concern of mine. In fact, the first bill I introduced as a young state legislator was a $375 million state bond issue to get the state of Ohio involved with wastewater treatment.

We currently have a real problem in Ohio in complying with Environmental Protection Agency (EPA) requirements.

More than 100 communities in Ohio have been forced to improve their systems. Unfortunately, the federal government reduced its share of paying for the EPA requirements, creating unfunded mandates. I am outraged that citizens are going to have to shoulder the burdens of these stricter regulations, and I am committed to helping these communities meet the standards without throwing them into an economic slump.

Our physical infrastructure is a critical piece to making America more competitive globally. Our needs are overwhelming, and our resources are being squeezed. We should be rebuilding an infrastructure of competitiveness so that future generations have at least the same opportunity to enjoy our standard of living and quality of life.

winter I 2007

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he recently passed energy bill, H.R. 6, the Energy Independence and Security Act of 2007, is good news for soy biodiesel. Among the bill’s provisions: It significantly expands the Renewable Fuels Standard (RFS) and will significantly increase the use of soy biodiesel in the United States.

The expanded RFS requires a specific renewable requirement for diesel fuel that will be met by biodiesel and other renewable biomass-based diesel fuels. Increasing the minimum renewable requirement in the diesel pool from 500 million gallons in 2009 to 1 billion gallons in 2012 will create a viable and stable domestic market for soy biodiesel. Additionally, the fuel labeling requirements in the bill will promote consumer confidence in renewable fuels and help ensure that only quality fuels are entered into commerce.

Growers who plant Vistive™ soybeans will reap the benefits of a market premium, which is in great demand as the food industry looks for reliable sources of low linolenic oils.

For more information on VistiveTM soybeans, contact:

John Knedler, Forest Joe Harter, Haviland Curtis Fannin, Ashville Blake Rossel, Sandusky

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Healthy food for consumers, healthy profits for growers. winter I 2007

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Investing Checkoff Dollars

State and National Checkoff Organizations

Say Goodbye to Good Friend After 16 Years of Service

U

by Jennifer Coleman

nfortunately, all good things must come to an end. The same is true for Amy Sigg Davis’ term with the Ohio Soybean Council (OSC) and the United Soybean Board (USB), as she retires from the board of directors of each organization at the end of December. She has been an influential part of the growing soybean industry and has accomplished a great deal for soybean farmers in Ohio and throughout the U.S. Davis brought a long history in agriculture to her position. Raised on a farm in Southwest Ohio, she started helping her father in the fields at a young age, and her love of farming stayed with her throughout her life. In 1987, after her father passed away, she took over her family’s farm operation and continues to manage it with her husband, Walter.

Davis’ time as a board member started after taking part in The Ohio State University’s Leadership Education and Development (LEAD) Program where she met Bill Coppess, one of the charter members of OSC. He told her about an open seat on the board and suggested she become involved. In 1991, she began her first term.

“Amy has always been very engaged in the process of evaluating projects and asking questions of the board, staff and researchers,” says John Lumpe, OSC executive director. “She looks forward to where the soybean industry 10

SOYBEAN REVIEW

is going and focuses on the future. Her thoughtfulness, insight and interest in issues will certainly be missed.”

In 1999, Davis was appointed to the USB board of directors and will complete her third and final term in December.

Her position with USB allowed her to work on behalf of all U.S. soybean farmers, while still representing the best interests of Ohio’s soybean industry at the state level.

During her tenure, Davis has seen exports of soybeans increase rapidly. She has travelled internationally to promote Ohio’s food-grade soybean in Japan and also played a pivotal role in the creation of OSC’s first international office in China.

“It’s been very exciting to see our soybean exports increase so much over the years, particularly in Asia,” Davis says. “I’ve also enjoyed seeing aquaculture evolve and begin using soy for food.”

But international marketing has certainly not been Davis’s only focus, as she has been a strong advocate for new use development and has been a part of many successes in this area. Over the years, OSC and the soybean checkoff have invested millions of dollars in the development of these new use products and have won three R&D 100 awards for soy-based plasticizer, toner and polyols. In addition to these awards, over $50,000 in royalties have been paid to OSC and will be reinvested in more new use research.

“The most exciting thing to me is that I’ve been involved with this industry

long enough to see the evolution of bioproducts, such as soy biodiesel and soy-based inks,” Davis says. “I have seen vast changes in our chemical and manufacturing industries and watched as they are moving to go green – and using soy-based products to do so. I believe so highly in the quality of work that the soybean checkoff is doing.”

During her term as OSC chairman in 2005 and 2006, Davis played a key role in the establishment of the Ohio BioProducts Innovation Center (OBIC), which is helping to develop new use products by bridging Ohio’s top two industries, agriculture and polymers and chemicals.

“Amy was instrumental in support for new use development and activities,” Lumpe says. “She understands what it takes to develop these new products and knows what kind of benefits to soybean farmers they could bring.”

And Davis’ work for agriculture and soybean farmers will not end with her term. She intends to remain actively involved and hopes to have other opportunities to advocate for the soybean industry. But she is equally proud to have had an influence on the next generation.

“Not only have I had the chance to make an impact on agriculture, but I have also made an impact on my children and grandchildren,” Davis says. “I hope they will continue to have an interest in agriculture and one day become leaders in the industry as well.”

International Marketing

A Focus on International Marketing Creating Global Demand for Ohio Soybeans

International Marketing

The Facts n Forty-five percent of U.S. soybean production was exported over the last five years. Nearly half of Ohio’s total soybean production is exported to buyers in markets such as China, Mexico, Japan, Taiwan and Indonesia.

— Kirk Merritt, Ohio Soybean Council Director of International Marketing

O

U.S. Soybean Exports – 1.1 Billion Bushels

Source: USDA-FAS

Source: USDA-FAS

n Ohio China Office – Established in late 2006 by the Ohio Soybean Council, in of Development’s International Trade Division, the Ohio China Office seeks to increase Oh accounted for 38 percent of all U.S. soybean exports in 2006.

n Containeriz exports has b Asian market bulk containe

In 2006, only or 779,735 m months of 200 1,158,678 me

2006

n Soybean Exports to Taiwan via Containers – Through another project administered by USSEC, the Ohio Soybean Council promotes exports of Ohio soybeans to Taiwan in shipping containers.

2007

hio soybean farmers are in a position to greatly benefit from the international market for soybeans. The Ohio Soybean Council (OSC) and the soybean checkoff are already leading the way by funding a variety of international marketing projects, including an OSC office in China, promotion of soy as a feedstock for aquaculture and pork exports to Japan.

Ohio currently exports nearly half of its soybean crop to international markets, such as China, making it the sixth largest exporter of soybeans among U.S. states. These exports of soybeans and soybean products brought in an estimated $5.3 billion over the past 10 years and made soybeans Ohio’s No. 1 agricultural export. Continuing to increase Ohio’s exports of soybeans, particularly food-grade soybeans, will be an important factor in the drive to increase the value of Ohio soybean producers’ bottom line.

There have already been numerous successes. Ohio is established as a preferred supplier of food-grade soybeans to many Asian countries, including Japan, partly as a result of OSC’s work. OSC has also helped to build the aquaculture industries in Asia and the Middle East, driving more exports of soybean meal.

Looking to the future, exports will continue to play a prominent role in the long-term vitality of the soybean industry in Ohio. The Ohio Soybean Council will continue to support international marketing projects and explore new and emerging opportunities.

n Soybeans among agric Ohio and the

0

International Marketing

are the No. 1 export cultural products in e entire U.S.

n According to USDA estimates, Ohio’s exports of soybeans and soybean products totaled nearly $5.3 billion over the past 10 years, which was 36 percent of Ohio’s total agricultural exports during that period.

n Ohio is the sixth largest exporter of soybeans among U.S. states.

n Increasing U.S. soybean meal exports is vital as U.S. crush increases for soy biodiesel demand.

U.S. Soymeal Exports – 310 Million Bushels

S

n a unique partnership with the Ohio Department hio’s exports of soybeans to China, a market that

n Pork Exports to Japan – The Ohio Soybean Council supports the efforts of the U.S. Meat Export Federation (USMEF) to market pork exports in Japan, which drives higher consumption of soybean meal.

zed Shipping – One of the more recent trends in U.S. soy been the growing shipments of soybeans and soy meal to ts in containers. Taiwan is the most important market for erized shipments.

y 32.7 percent of Taiwan’s annual soybean requirement, metric tons, was imported by container. For the first eight 07, this percentage increased to 71.85 percent, representing etric tons.

Taiwan Soybean Imports

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n Food Grade Exports to Asia – The Ohio Soybean Council promotes Ohio food-grade soybeans to customers in Japan, Korea, Taiwan, the Philippines, Singapore, Vietnam, Thailand and Malaysia through a contract with the international marketing firm Strategic Market Development.

International Marketing

n Soy in Aquaculture – Through projects administered by the U.S. Soybean Export Council, the Ohio Soybean Council promotes the use of soy as a feedstock for growing aquaculture industries in the Middle East and Asia.

n Aquaculture is the fastest growing segment in the feed industry, currently using 250 million bushels of soy meal. Soy meal use in aquaculture is expected to increase to 500 million bushels by 2010.

n Soy to Enhance Nutrition in Developing World – Through support of the World Initiative for Soy in Human Health (WISHH), the Ohio Soybean Council promotes efforts to alleviate hunger and encourage the use of more soy protein for human nutrition in Asia, Africa and Latin America.

Soy flour photo courtesy of the Soyfoods Council.

n Soy Flour – The use of U.S. soy flour in Egyptian bakeries is growing fast. By adding soy flour to bread and bakery products, the resulting products have a longer shelf life, better appearance and a higher protein content. The use of U.S. soy flour has increased in the Middle East from a handful of containers to thousands of tons each month.

Investing Checkoff Dollars

E

Ohio-Based Furniture Company Switches to Soy-Based Foam

by Jennifer Coleman

ach day, Norwalk Furniture Corporation, based in Norwalk, Ohio, produces hundreds of products, from sofas to chaises, chairs to ottomans. However, the upholstery manufacturer will now do so under a new set of “green” standards, including the use of 10 percent soybased foam in all of its upholstery.

The Ohio Soybean Council (OSC) has long supported the research and development of soy-based foam due to its market potential and benefit to Ohio soybean farmers.

Foams used in industrial applications are traditionally petroleum-based and, using upwards of 20 to 30 trailers of foam a week, Norwalk’s product development team was in search of a “green” alternative.

“We knew that we had to replace the

petroleum-based foam product we were using,” says Rick McKirahan, president of Norwalk Furniture Corp.

Norwalk soon made that change upon learning of Preserve™ by Hickory Springs – a flexible polyurethane foam product that replaces a portion of petrochemicalbased ingredients with soybeans. “It was an important product in support of our ‘green’ mission,” finishes McKirahan.

With the continued rise in petroleum prices and concerns about availability, soy-based foam is an alternative that offers sustainability, without compromising the comfort and support of Norwalk’s previous seating system.

The company first introduced the soybased foam upholstery at the High Point International Home Furnishings Market in early 2007.

“It’s the most innovative cushioning material that we’ve used since the introduction of high-resilience foam in the ‘80s, and it outperforms conventional foam,” says Jeff Gross, director of product development at Norwalk Furniture Corp. “More and more customers are environmentally conscious and seeking products that are labeled as such.

It’s important that they’re aware that these products also carry the same, or improved, quality.”

According to Dan Corcoran, OSC chairman, customer acceptance is key to success in this area.

“Seeing the acceptance of soy-based products in manufacturing is very encouraging,” says Corcoran. “The increase in industrial uses of these products will directly affect the soybean farmers in Ohio.” *Picture and portions of this article provided by Norwalk Furniture Corporation.

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15

Investing Checkoff Dollars

Palm Oil Provides Competition

to Fill Growing Global Demand for

Vegetable Oil

“The global trend for palm oil production is upward,” Baize says.

“Expectations are for palm oil output in 2007–2008 to grow by 10 percent above 2006–2007. The main incentive to expand palm oil output is low cost of production and its high output.”

Palm Oil for the Edible Oil Market

Oil from the palm fruit can be used for frying and baking applications and is one of soybean oil’s main competitor in the edible oil market.

T

hree years ago, palm oil surpassed soybean oil to become the most widely used edible oil in the world, with imports of palm oil into the United States increasing in the last several years, due in part to concerns over trans fats. Palm oil does not need to be partially hydrogenated for use in frying and baking applications like some other oils, including soybean, and as a result does not contain trans fats.

In 2006, the U.S. Food & Drug Administration required that food manufacturers label trans fats along with other nutritional information on food packaging. In addition, many restaurants, food service providers and city governments want to reduce or eliminate trans fats from their foods. This led to a rise in popularity of oils that do not contain trans fats and has driven the recent surge in palm oil’s popularity as a competitor for soybean oil and other edible oils.

Palm Oil Facts

Palm oil is found in the fleshy portion of the fruit of the oil palm tree and has a very different fatty acid composition from palm kernel oil, which is found in the kernel or seed of the fruit.

16

SOYBEAN REVIEW

Palm oil is 50 percent saturated fat and 50 percent unsaturated fat.

“Palm oil contains a higher level of saturated fat than soybean oil, which provides it greater stability and functionality for some food applications,” says John Baize, president of soybean industry consulting firm John C. Baize and Associates.

Baize says palm oil’s main advantage over soybean oil is its productivity per acre. Average production in Malaysia is about 3,800 pounds of palm oil per acre.

Only about 575 pounds of soybean oil can be produced from an acre of soybeans with 50 bushel-per-acre yields.

“The Malaysian palm oil industry has increased production through a small increase in acreage and primarily increased yields,” says Eric Niemann, United Soybean Board (USB) chairman and soybean farmer from Nortonville, Kan., who traveled this year to Malaysia and saw a firsthand view of the palm oil industry.

Palm oil is primarily produced in Indonesia and Malaysia, with some additional production in Nigeria, Cameroon, the Ivory Coast, Colombia, Thailand and Papua New Guinea.

In addition to being trans fat-free, palm oil has other qualities that make it attractive in the edible oil market. Traditionally, palm oil has been a lower-priced option than soybean oil, but, recently, prices have risen to levels very near soybean oil or higher, which may slow down the inclusion of palm oil in some food products.

However, there is more than enough demand for soybean oil and palm oil, provided those oils meet consumer demands. That’s why the soybean checkoff and the rest of the U.S. soybean industry have been working to satisfy marketplace needs, including the reduction of trans fats, for over a decade.

Low-Linolenic Soybean Oil Cuts Trans Fats

“Starting about 10 years ago, the soybean industry began working to modify the soybean to develop low-linolenic varieties that eliminate trans fats,” says Don Banks, president of Edible Oil Technology – a company specializing in edible-oil issues.

Low-linolenic soybean oil comes from varieties of soybeans that have had their linolenic acid profiles reduced from 7 percent to less than 3 percent.

This reduction in linolenic acid reduces or eliminates the need for the oil to be hydrogenated, a process that stabilizes soybean oil for certain frying and baking applications – but also increases the saturated fat and generates trans fat in the oil.

Ohio soybean farmers have been adapting more acres of low-linolenic soybeans since they became commercially available, with over 500,000 acres of lowlinolenic soybeans planted last year. This year, Ohio soybean farmers will grow more than 20 percent of the entire U.S. soybean crop.

Low-linolenic varieties that are currently available include a low-linolenic variety from Asoyia; TREUS low-linolenic oil from Bunge – processed from Pioneer soybean varieties and marketed in a partnership by Bunge and DuPont; and VISTIVE from Monsanto. Ohio companies Bunge and Cargill currently process lowlinolenic soybeans.

Banks says that low-linolenic soybean oil provides improved flavor over other trans fat-free oils, and companies such as KFC and Kellogg have decided to use low-linolenic soybean oil due in part to that reason.

A Role for Biodiesel

The similarities between soybean oil and palm oil don’t end at the dinner table.

Like soybean oil, palm oil can be used as a feedstock to make biodiesel, an idea that is becoming more popular as countries begin looking for more renewable energy sources.

“Palm oil works well for use in biodiesel, other than not performing well in colder climates,” Niemann says. “The clouding point in colder climates is not as good as soy biodiesel or biodiesel made from canola or rapeseed.”

“It is possible to separate the olein portion of palm oil to make biodiesel that would not have a cold-flow problem, but palm olein is more expensive,” Baize says.

The increased interest in biofuels, and the accompanying governmental requirements, mean that there will be demand for all oils that can be used for biodiesel. In fact, filling that demand may be a challenge.

“The world’s supply of all vegetable oils would only supply about 60 percent of U.S. biodiesel demand,” Baize says. “This year the global-ending-stocks-to-use ratio for all vegetable oils is the lowest since 1972-73.”

Supplying the demand for oil for biodiesel and edible oil will become a significant issue for the United States.

Corn oil might be able to provide 2-3 billion pounds, with canola oil providing about the same amount – though half of that supply is imported, according to Banks. Cottonseed oil provides only about 900 million pounds annually. Soybean oil provides the largest supply, at 18 billion pounds. Palm oil imports to the United States could help alleviate some supply pressure.

Sustainable Practices

In order to help provide oil to the growing markets for trans fat-free oil and biodiesel, the global palm industry has tried to address concerns about the so-called sustainability of palm oil production.

According to the American Palm Oil Council (APOC), based in California, the areas converted to palm cultivation over the past two decades came from pre-existing rubber, cocoa and coconut farms or from logged-over forests of areas zoned for agriculture. Today 60 percent of Malaysia remains forested; less than 20 percent of Malaysian land is used for agriculture.

The Malaysian oil palm industry is subject to and strives to comply with a wide array of environmental laws. In addition, the industry has established the Palm Oil Wildlife Conservation Fund, an initiative aimed at promoting the formulation of ideas and proposals that can enhance biodiversity linked to palm oil production worldwide, according to APOC. “The palm oil industry is very well organized, and production is now about 12 to 17 tons of palm fruit per acre,” Niemann says. “The increase in production has come from increased productivity despite limited acreage.”

Ultimately the markets for both trans fat-free oils and biodiesel will continue to grow rapidly. The palm industry has some advantages, while the soy industry enjoys other attributes. Many industry observers believe it will just be a matter of each industry finding its niche to supply all the markets for vegetable oils, in order to keep consumers happy.

“Optimism should exist that there will be a market for all vegetable oils and palm oils,” says Pietz. “There will be numerous challenges ahead for both industries, and we do compete for the markets, but there is opportunity for both of us to gain.”

The edible oil market is a large market for soybean oil. The U.S. soybean industry has worked to reduce the need for hydrogenation in certain food applications to protect this market.

Did You Know...

• Like soybean oil, there are a variety of nonfood uses for palm oil and palm kernel oil, such as soaps, candles, rubber processing and cosmetics.

• Palm oil naturally contains carotenes, which give it a red color.

• About 90 percent of palm oil currently goes into food applicat i o n s .

For soybeans, 87 percent of U.S. soybean oil is consumed by humans, with the additional 13 percent going to industrial uses.

• Palm oil is consumed in more than 100 countries worldwide.

• The oil palm was first introduced to Malaysia in 1870 as an ornamental plant.

• Palm oil has been used in food preparation for over 5,000 years.

• Oil palm trees are best suited to areas within 10 degrees latitude of the equator.

• In 2006, palm oil accounted for 52 percent of the total world oil and fat exports.

• A palm bears eight to 12 fruit bunches annually, each containing 1,000 to 3,000 fruits.

• Malaysia contributes 10 percent of the global oils and fats utilizing only 9.88 million acres. It’s also a market for U.S. soy.

Sources: American Palm Oil Council and USB. This report was compiled with contributions from each program area and/or primary contractor. winter i 2007

17

Investing Checkoff Dollars

Soybeans Leading

New Fuel Cell Techno

O

by Jennifer Coleman

ur ancestors couldn’t have imagined the kind of technologies that have become so integrated into the modern farming operation. They had a horse and plow, and now we have combines using GPS. But we have yet to reach the end of the technological advances in farming, and one Ohiobased company believes it has the answer to energy production for the next generation.

Technology Management, Incorporated (TMI), based in Cleveland, Ohio, has developed a solid oxide fuel cell (SOFC) system that could provide energy to remote and rural environments, including farms.

First formed in 1990, TMI, with funding from the Ohio Soybean Council (OSC) and the soybean checkoff, has made tremendous advancements in this technology. It is clean, quiet and fuel efficient with the ability to run on a wide variety of fuels, including raw soybean oil.

In was in 2005 that TMI first formed a relationship with OSC, after Bobby Moser, vice president and dean of The Ohio State University’s (OSU) Agriculture Administration, and Steve Slack, director of the Ohio Agricultural Research and Development Center (OARDC), put the two organizations in contact. After a TMI presentation to the OSC board of trustees, Dale Profit, OSC board member and soybean farmer from Van Wert County, John Lumpe, OSC executive director, and Tom Fontana, OSC director of new use development, traveled to Cleveland.

This visit to the TMI facilities convinced the OSC representatives of the potential for this technology, and it gave TMI scientists their first face-to-face contact with a farmer, their targeted customer.

18

SOYBEAN REVIEW

TMI Fuel Cell Display at the 2007 Farm Science Review.

“My first reaction was shock and surprise,” Profit says. “Even though I didn’t completely understand the more in-depth technical process TMI was using to create the fuel cell, I did understand how valuable this technology could be to farmers.”

One of the most important things to TMI is feedback from potential customers, like Profit, and it was at the beginning of a relationship with the OSC board of trustees that TMI began to shape their business plan to match the needs of farmers.

“We connected that day and learned a lot from each other,” says Benson Lee, TMI president. “After this visit, we shifted our thinking to how we could use farm waste to create energy that would support soybean farmers.”

As a result of this positive meeting, OSC, with funding from the soybean checkoff, awarded its first grant to TMI for its work with soybean oil. Over the

next year, TMI learned a lot more about agriculture, including that many soybean farmers had livestock as well. And with funding again from the soybean checkoff in 2006, they embarked on another project to look at alternative ways to use soybean meal, oil, manure and digesters – not only for electricity but for other uses such as synthetic diesel.

“The lowest value of the soybean is the meal component, and we wanted to see what we could do to increase its value. Being able to look at various options, you can come up with a plan to benefit the entire farm as a whole,” Lee says.

The newest project that TMI is researching is how to utilize the waste-heat generated when the fuel cell is running. The process of using this heat to produce hot water, called cogeneration, will make the system more energy efficient. OSC and the soybean checkoff recently awarded

the Way:

ology for the Future

Close up of the fuel cell “stacks” while in operation.

1 kW TMI fuel cell system used for testing.

its third grant to TMI to engineer this process.

“For a farmer, the beauty of having this capability on-site means that you would not have to burn extra fuel to get heat,” Lee says.

Fuel cell systems like this one also offer advantages over other renewable systems and traditional generators.

While engines are based on a combustion process and produce carbon dioxide, fuel cells are based on a chemical process making them cleaner, quieter and able to operate indoors. And, unlike solar and wind power, fuel cells can run continuously.

“This technology would help to improve the overall economics of the farm because of decreased energy costs and usage of fossil fuels,” says Mike Petrik, TMI vice president and general manager. “The fuel cell system would not only create electricity but would be used to heat a home or barn. Instead

of taking fuel to the energy producer, we are taking the energy producer to the farm.”

During the 2007 Farm Science Review, TMI decided to test its technology in a new way. The team of TMI researchers loaded the working laboratory model into a truck and drove it from Cleveland to London, Ohio, to be displayed at OSC’s building. This 1-kilowatt system ran a computer and several lamps during the farm show and drew attention from visitors, legislators and media alike.

“The Farm Science Review was the ultimate test of the capability of the technology and its potential market,” Petrik says. “By putting it on display, we had the opportunity to ask farmers what they thought. The overwhelming response from farmers was positive, and we heard things like, ‘this is what we are going to need’ and ‘keep going’.”

TMI’s SOFC system is a revolutionary technology. According to Lee, TMI is

one of only 12 other fuel cell system developers in the world who have developed systems to run outside of the lab and, of those 12, only eight are SOFC systems. Even with the potential power of the system, their current estimation of the size of a commercialized version is only 26 inches tall and weighing only 60 to 70 pounds.

“I’m really excited to see what happens with this technology,” Profit says. “This is a company working on a technology right here in Ohio t h a t could benefit Ohio soybean farmers. I feel privileged to be a part of this process.”

Petrik agrees.

“Farms and fuel cells are a marriage of distributed resources and power generation,” Petrik says. “This technology will bring farmers to the forefront and give them the opportunity to lead and be the first to use this worldchanging technology.” winter I 2007

19

Investing Checkoff Dollars

Soybean Checkoff

Investments Continue to Pay Off in Big Ways

Battelle

Research Team

N

by Jennifer Coleman

ot one, not two, but three. The Ohio Soybean Council (OSC) and soybean checkoff have been awarded three R&D 100 awards, in cooperation with Battelle Memorial Institute, for research and development projects that identify new industrial uses for soybeans. The most recent R&D 100 award, for soy polyols, was presented in October.

Award recipients are determined by an independent judging panel and editors of R&D Magazine, and only the top 100 innovations of the year receive this honor. OSC Chairman Dan Corcoran, of Pike County, and OSC board member Dale Profit, of Van Wert County, along with John Lumpe, OSC executive director, Tom Fontana, OSC director of new use development, and researchers from Battelle accepted the award on behalf of OSC and Battelle at the R&D 100 awards banquet in Chicago.

“This is a very prestigious award, and it is an honor to be recognized,” Corcoran says. “These soy-based polyols could 20

SOYBEAN REVIEW

replace a large amount of petroleum used in industrial applications, helping to increase the value of soybean products like glycerin.”

In the United States, over 3 billion pounds of petroleum-based polyols are used in the production of various foams, coatings and adhesives. Besides the issues of energy security and environmental impact, the price of petroleum and petroleum polyols continues to rise. In order to reduce the amount of petroleum used in industrial applications, it is necessary to have a practical alternative that is also cost-effective.

Soy-based polyols were developed to fully replace the petroleum equivalent and is made from low-cost soybean glycerin. Additional benefits include low viscosities, absence of odor and color and it requires less energy to produce compared to petroleum polyols.

“Many people don’t realize how much energy is used to produce certain industrial materials,” Fontana says.

“Because soybeans are a renewable resource, and less energy is required to create the soy-based polyols, this is an exciting development for everyone involved in the process.”

This most recent R&D 100 award for polyols is just another milestone in the success that OSC has seen in developing new products through its work with Battelle. OSC and Battelle were previously honored with R&D 100

awards for soy toner in 2003, and soybased plasticizer in 2002.

But these innovations are not just winning awards, they are being commercialized, entering the marketplace and creating a tremendous amount of return on Ohio soybean farmers’ checkoff investments. In 2006 and 2007, royalty checks for over $52,000 were given for products such as soy-based toner, powder coatings and plasticizer.

The royalties will be reinvested in more new use research projects.

“The work that Battelle is doing in soy-based products is outstanding,” Fontana says. “The returns OSC has seen from its investments at Battelle could lead to additional products being commercialized with more royalties coming back to OSC for future investment.”

OSC Royalties • March 2006 – $25,000 for soy toner • November 2006 – $7,500 for soy powder coatings • March 2007 – $7,500 for soy toner • August 2007 – $7,500 for soy powder coatings • September 2007 – $5,000 for soy plasticizer.

Biobased Products Draw Interest from Public

T

he majority of Americans are interested in learning more about biobased products, according to a recent study by the soybean checkoff and United Soybean Board (USB).

The national study, conducted by NuStats, surveyed 1,370 people and found that 88 percent of respondents support the federal government’s involvement in educating consumers about the availability and attributes of biobased products. Most consumers, 88 percent, also support Congress’ increase in funding to support the federal government becoming a prominent and visible purchaser of biobased products to make them more available to the general public.

“This research affirms that Americans see the value of biobased products, which can be made from U.S. soybeans, to offer energy security, environmental, worker health and other benefits,” says Chuck Myers, USB Domestic Marketing chair and soybean farmer from Lyons, Neb.

There is still room for more education, however. Three-quarters of those polled reported being unfamiliar with biobased products, demonstrating the need for continued education about the importance and availability of these renewable, homegrown products. The good news is that 81 percent of those surveyed with modest knowledge expressed interest in learning even more about “green” technology.

“The study clearly shows that consumer education and product promotion make an enormous difference in whether people will buy biobased products,” Myers says. “Through their checkoff, soybean farmers have helped research and bring many of these products to market.”

The soybean checkoff is committed to funding the research, development and commercialization of new industrial uses for soybeans. It has focused its efforts on five target areas, including: adhesives, coatings and printing inks, lubricants, plastics and specialty products.

For the past decade, U.S. soybean farmers have helped fun d t h e development of many successful new uses for soybeans, including soy plastics and foams, soy methyl esters and soy ink. Research to find new applications for these products continues in an effort to utilize more U.S. soybeans.

OSC has also supported new use research in these areas, winning three R&D 100 awards for soy-based plasticizer, soy-based toner and, most recently, soy-based polyols. Royalties from the commercialization of these and other products have resulted in a significant return on checkoff investments that will be used to fund more research.

An executive summary of the research is available at www. soybiobased.org along with profiles of success in federal biobased products use.

In addition, USB has produced a catalog of currently available soy biobased products, along with other soy-based research information, which may be viewed at www.soynewuses.org.

*Portions of this article provided by the United Soybean Board.

winter I 2007

21

Investing Checkoff Dollars

Document Soybean Disease History

Better Management Means Knowing What’s Been There Before

Sudden Death Syndrome

Rust n a e b y o S n Asia

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SOYBEAN REVIEW

Soybean Cys

t Nematode

soilborne pathogens such as sudden death syndrome, brown stem rot and white mold,” Robertson says. “I also would encourage growers to check their fields for soybean cyst nematode (SCN) regularly. Growers need to monitor their SCN populations and choose varieties that enable them to manage the pathogen effectively.”

Fungicide seed treatments may be another disease control strategy, Robertson adds, and are good insurance for fields with a history of Phytophthora or Pythium.

“These pathogens are able to infect germinating seedlings and cause damping off,” Robertson says. “Each is favored by different temperatures at and soon after planting. Seedling blights caused by Pythium and Phytophthora are characterized by soft, wet rot of the hypocotyl and root tissue, but only laboratory tests can distinguish between the two.”

According to Robertson, more than two-dozen fungicide seed treatment experiments across Iowa over the last four years have not shown any negative impact on either stand or yield.

“We have not consistently seen a lot of positive effect either,” Robertson says. “But as with all types of insurance, regular returns are rare.” When you do need it, you’re thankful to have it.

Although we can’t predict what the odds are of getting your money back from seed treatment investments, chances are if your production field falls into one of five categories you’ll be glad you invested in a fungicide seed treatment.”

Those categories include history of stand establishment problems, planting in the late April or early May time frame using minimum tillage or notill practices in poorly drained fields, planting in poorly drained fields using a low seeding rate, planting moderate to poor quality seed and replanting because of stand establishment problems.

“Farmers have been recommended to plant earlier since the yield potential for soybeans increases,” Robertson says. “However, cool and wet soils are frequently encountered at these planting

dates and will slow seedling growth and make the seed more vulnerable to seed rot and seedling blights caused by fungi that may reduce stands.”

Robertson says growers have also started reducing seeding rates to save on seed costs. A lower seeding rate does not always mean a lower yield since soybeans can compensate for the space.

Soybean checkoff-funded research in Iowa has demonstrated that a uniform stand of 100,000 plants per acre at harvest is enough to maximize yield.

But the problem, Robertson says, is that the risk of lower yield increases at lower seeding rates, especially if low seeding rates are used in combination with an early planting date.

“It is difficult to determine preplanting what the risk of seedling blight might be in any season,” Robertson adds. “Environmental conditions after planting greatly influence disease risk.

Since most fungicide seed treatments are only active two or three weeks, if germination and emergence slow down in cool weather, seedlings are still vulnerable to infection.”

Robertson stresses that not all seed treatment fungicides are equally effective against all fungal pathogens. Products that contain the active ingredients metalaxyl or mefenoxam, Allegiance and Apron XL are effective against Pythium and Phytophthora.

“Obviously, the fungicide seed treatment you use will depend on what disease problems are prevalent in a particular field,” Robertson says.

“Combination seed treatments can be used when the information is not available. Good records make seed treatment and variety selection easier.

Many growers in 2008 will go back to fields that were in corn for one or two years, and it can be difficult to recall what diseases occurred at that time.”

photos courtesy of planthealth.info

winter I 2007

Bean

23

photo courtesy of Palle Pedersen

I

f you’re planning to rotate any fields from continuous corn back to soybeans in 2008, knowing the field’s soybean disease history is a plus in soybean variety selection, as well as in determining whether any seed treatments would be beneficial.

“Growers need to keep good records on the history of fields, including variety grown and diseases present,” says Alison Robertson, Iowa State University plant pathologist. “With the disease triangle, it is always difficult to predict what diseases are going to be a problem in the coming season. But, knowledge of what diseases occurred previously at least gives you an idea of what pathogen inoculums might be present in a field.”

The disease triangle is made u p of three interactive components: the susceptible host, a conducive environment and a viable pathogen.

When all three components are present in just the right combination, the disease will also be present.

Researchers have found that a disease host may or may not be susceptible in any given set of circumstances. On a bell curve, some soybean hosts are at one end of the spectrum and may be very resistant. At the other end, some hosts are very susceptible. In the middle are the majority of hosts with varied degrees of susceptibility or resistance.

Once a susceptible host is present, the pathogen must have a conducive environment, or specific set of conditions, to develop into a disease. Disease is part of the life cycle for several pathogens. A host plant is needed for part of that cycle.

The pathogen evolves where moisture, the substrate and temperatures interact with the host to create problems.

If a susceptible host is available and the environment is conducive for disease development, the viable pathogen must also be present to complete the disease triangle. In some cases, a pathogen may be present but not viable. Different spores can have different mechanisms for release, which can further complicate the picture.

“For 2008, growers should mostly look for varieties with tolerance to

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