As north-central Iowa farmer Dan Beenken sees it, planting high oleic soybeans this spring was a pretty solid bet.
The high oleic soybeans will command a premium of 45 cents a bushel over commodity soybeans when he delivers them this fall to the CHS processing plant in Fairmont, Minnesota, about 45 miles northwest of his farm in western Winnebago County. At the same time, Beenken doesn’t see a lot of downside to his contract with CHS and DuPont Pioneer to raise the soybeans designed to produce a healthier oil.
The soybeans, sold by Pioneer under the Plenish brand name, are expected to yield on-par with the company’s best genetics. And the farmer’s contract with CHS doesn’t require a lot of costly or time-consuming production practices.
Drawn by premium
"The premium is really the big thing for us," said Beenken, who farms near Buffalo Center with his three sons Nate, Joel and Seth. "We are looking for ways to get more out of the market, and high oleic soybeans seem like a pretty good way to do that."
Beenken, who has raised seed soybeans for years, is comfortable with raising the high oleic crop. "Really, the seed bean specifications we have are more stringent that the ones for Plenish," he said.
Beenken said his biggest concern is a requirement that the soybeans be delivered to CHS in Fairmont for processing during a specific time window in November.
"That could be right in the middle of corn harvest for us, so it could be pretty hectic right then," he said. "But we decided it was worth the risk."
The Beenkens are among the first wave of farmers in northern Iowa and southern Minnesota to grow high oleic Plenish soybeans.
First Iowa contracts
Pioneer and Minnesota-based CHS Processing and Food Ingredient announced the availability of the high oleic contracts in fall 2016 for soybeans planted this spring.
It was the first time high oleic contracts were offered in Iowa and southern Minnesota, according to Brian Buckallew, senior grain production systems manager for DuPont Pioneer.
DuPont Pioneer has offered Plenish contracts for several years in the eastern Corn Belt for various oilseed processors and a couple of years ago offered contracts around Hastings, Nebraska, to supply an oilseed processing plant there, he said. "They have caught on well in other parts of the country, and we are happy to be able to bring them to Iowa," Buckallew said.
High oleic soybeans, developed through biotechnology, produce nutritionally improved cooking oil that has improved oxidative stability, which reduces build-up on frying equipment and extends its oil fry life.
In addition, high oleic soybean oil has less saturated fat than commodity soy, delivers the similar taste and texture as conventional cooking oils and has a shelf life that is equal to or better than traditional oils.
Food processor demand
More foodservice companies, Buckallew said, are demanding more high oleic soybean oil as they work away from other oils. That translates into opportunities for farmers to supply a growing market and earn premium prices on their soybeans.
The Plenish product, Buckallew said, has caught on with farmers, especially in an era of low commodity prices.
"With the premiums, it’s been very attractive," he said. "It did not take very long to get enough growers to fill the CHS contract."
The Plenish contracts are based on acreage, not bushels, so the farmer can work to produce as many bushels as possible, Buckallew said. In addition, weed control and other agronomic practices are similar to commodity soybeans, he said.
Beenken and other soybean growers hope that high oleic soybeans will help them gain back a share of the vegetable oil market that has eroded over the years.
"We’ve seen a drop in the domestic demand for soybeans, and we want to turn that around and get our market share back," Beenken said.
DuPont Pioneer, Buckallew said, is working to spread the contracts for high oleic soybeans over additional parts of Iowa in the coming years.
"It will all depend on the demand from oilseed processors," he said. "But I can assure you, we are working hard to make that expansion happen."