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50th Anniversary Stories

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Branstad praises Iowa Soybean Association for its leadership on issues that matter to Iowans

By Aaron Putze, APR

(Des Moines, IA – Dec. 17, 2014) Iowa’s soybean farmers and the association they created 50 years ago were recognized by Iowa’s top official for their leadership in agricultural innovation and for advancing grower profitability and competiveness to the benefit of every Iowan.

Gov. Terry Branstad, keynoting today’s opening session of ISA’s 50th Anniversary Symposium in Des Moines, said he’s amazed at the progress made by the organization since its creation in 1964. At the time, he was a high school student in Forest City and could never have imagined the catalyst ISA would be for innovation and ingenuity in agriculture.

“It’s amazing to think how much agriculture has changed and the key role ISA has played along the way,” Branstad told the audience of more than 300. “You’ve made it a priority to develop new markets and create new products for soybeans. It’s because of this work that Iowa continues to be a leader in agriculture.”

The governor recalled accompanying ISA’s Chief Executive Officer, Kirk Leeds, to China several times and complimented the shared efforts to grow relationships with the country and its president, Xi Jinping.

President Xi, he said, first traveled to Iowa in 1985 as part of a small delegation. While here, Branstad accompanied him on visits to several communities, a tour of the Mississippi River and joined him for picnics and birthday parties with guests he met while in the Hawkeye State.

Following Branstad’s reelection in 2011, he and a delegation of Iowa soybean leaders were welcomed by President Xi for a discussion in the Great Hall of the People.

“He spent nearly an hour telling us how much he loves Iowa and called us ‘an old friend,’” Branstad said. “That means a lot for a leader who represents a country that purchases more soybeans than the rest of the world combined.”

Branstad said many of the innovations that have occurred in Iowa agriculture are the result of Iowa’s soybean farmers and the work of the association they fund. Since 1964, the value of the state’s soybean crop has grown exponentially, benefiting local economies.

“Today, soybean production in Iowa is valued at $5.3 billion annually,” he said. “Iowans know how important soybeans are and how important agriculture is because these industries allow us to weather economic downturns much better than other states.”

He commended the farmers and ag industry professionals in attendance for their phenomenal work providing food, feed and fiber for the world’s growing population.

“Our nation’s ability to export soybeans to those who need them is well respected, and that’s due in large part to the work of Iowa’s soybean farmers,” he said, citing nearly 150 counties that depend on the U.S. for this important product. “It’s exciting to think of the new products and technologies that the Iowa Soybean Association will create and advance in the next 50 years.”

The governor also welcomed questions from the audience, and addressed topics ranging from consumer acceptance of modern agricultural production and funding the Iowa Nutrient Reduction Strategy to committing funds to improve Iowa’s roads and bridges.

“I believe the timing is right for additional funding of the state’s road use tax fund,” he said, noting the recent and significant decline in fuel prices. “We’ve focused on property tax relief, reforming our education system and improving the health and wellness of our citizens.

“This year, our focus will be improving the state’s infrastructure including supporting efforts to connect every acre with high speed Internet.”

He also encouraged farmers to continue to advance the story of agriculture.

“What you do as farmers is often under attack,” Branstad said. “So it’s critical that improvements in agricultural technology and practices for growing crops and raising livestock be continuously communicated and championed.”

Also during the opening banquet, Branstad was presented Iowa Soybean Association’s Distinguished Service award for his dedicated service to the state’s soybean farmers and Iowa agriculture.

“It’s refreshing to have a governor who is so passionate about agriculture,” said ISA Chief Operations Officer Karey Claghorn in making the presentation. “You’re a true champion of our state and agriculture. We value his commitment to our farmers and for being a tireless promoter of what we do and the agricultural products we grow.

Branstad graciously accepted the award and said his support for farmers and the soybean association will not waiver.

“This Governor will always be your friend and your partner,” he said, “and together, we’ll continue to build the soybean industry for the future and to the benefit of this great state.”

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Five-year ag forecast makes grain market planning mandatory: Kluis

(Des Moines, IA – Dec. 18, 2014) While 2015 margins will be tight for corn, soybeans and wheat, there are fundamental marketing principles farmers can use to reduce anxiety and increase the odds of long-term success.

Commodity advisor and broker Al Kluis, speaking today to farmers and agriculture industry officials attending the Iowa Soybean Association’s 50th Anniversary Symposium in Des Moines, said grain markets don’t have to create anxiety if you work at it and create a plan.

That will be increasingly important, he adds, as the easy ride to profitability in agriculture is over. Through 2018, farmers must be disciplined and strategic in their approach to making business decisions.

“There are five ways to improve your approach to marketing and hope isn’t one of them,” he said.

Kluis encouraged farmers to:

  • Create a marketing plan that factors in crop insurance levels and costs of production. Marketing plans are needed today, especially for younger farmers who need one to obtain an operating loan.
  • Make incremental sales. “Marketing may not be your thing, but know that spending time in the office watching markets is part of your business.”
  • Use price targets and call your offers in.
  • Use time targets as well as price targets. “It works,” says Kluis. “When you’re planting corn you should be selling corn – cash and new crop. This has worked 24 of the past 30 years.”
  • Use all of your marketing alternatives – use the different tools.

Currently, the world is digesting record global supplies of grain, including nearly 4 billion bushels of soybeans grown this year by U.S. soybean farmers. Big yields create big supplies and they’ve created softening prices but the outlook isn’t entirely grim.

“The U.S. Department of Agriculture often overestimates ending stocks and underestimates demand,” said Kluis. “Long-term grain cycle lows were due fall of 2014 and we experienced them.”

Keep in mind, Kluis adds, that there’s a growing need for what U.S. farmers produce. For example, the U.S. hog inventory is approximately 80-82 million head. Since 2009, China’s hog herd has increased by more than 80 million.

“More than 200 million people will soon move from rural poverty to the city in China and when they make more money, they’ll want to eat better and that includes more pork in their diets,” he said. “Hogs need feed and that’s why I believe we’ll see China do to the corn market in the next decade what they did for the soybean market the past decade.”

Overall, Kluis’ outlook for U.S. grain prices is positive.

"I’m friendly to soybeans long term because of China,” he says. “Yes, ending stocks are large right now. But every time the department of agriculture comes out with a new supply-demand report, they trim ending stocks.”

Kluis, whose first job was working for the American Soybean Association, credited soybean leaders for building markets 20 years ago that are now paying dividends for current and future Iowa soybean farmers.

In 1974, soybean demand totaled nearly 1.5 billion bushels. Now, a crop of nearly 4 billion bushels will find a home. Also in 1974, U.S. soybean revenue totaled roughly $5 billion. Today, revenue is approaching $42 billion.

"Thank you to the founders of the soybean association for what it did for farmers beginning 20 years ago,” Kluis said. “That work has helped build markets and sustain long-term growth in demand and prices.”

Additional thoughts shared by Kluis:

  • Expects corn prices to range from $4.60 - $4.80 in 2015. Perhaps 3 million fewer corn acres may get planted in 2015; farmers may also have trouble getting crops planted in a timely fashion
  • Soybean prices will bounce between $10-80-11:20; a lot of the crop will be hedged. “But keep your eye on the ball and don’t overstay a weather rally in soybean prices.”
  • The new farm bill is one of the most complex he’s ever seen. Farmers now asking if they should change base acres and update yield history for each crop. The answers for most farmers is “yes.”
  • The real big decision, Kluis says, is which farm program to go into – price/loss coverage or ag risk coverage? If you choose the latter, then is it the county or individual option?
  • To answer those questions, farmers need to look ahead five years. “It’s a serious five-year decision. You have to look through 2018 and it’s a binding decision.”
  • For Kluis, he studies the actual Chicago Board of Trade futures prices going out through 2018.
  • My approach is you grow the crop, turn it into cash and hope you never get a government check.
  • “To not make a marketing decision is a bad decision,” says Kluis. “It’s been a really fun ride in the commodities markets since about 2005. And while the trend has been up, it’s cyclical. Remember that and make a marketing plan to you can remove the anxiety from marketing.”

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Effectiveness of ag’s outreach to consumers will define farming’s future

By Aaron Putze, APR

(Dec. 18, 2014 – Des Moines, IA) – The competitiveness of America’s farmers will continue to hinge largely on effectively managing economic gyrations and capitalizing on scientific advancements.

But ever-changing consumer preferences and the public’s evolving interest in a variety of food and faming topics will greatly influence how farmers and agricultural stakeholders do business.

That’s the consensus of respected agricultural experts sharing the stage during day-two of the Iowa Soybean Association’s 50th Anniversary Symposium held in Des Moines.

Participating in “Thinking Forward. The Next 50 Years of Agriculture” were:

  • Dr. Robb Fraley, Executive VP and Chief Technology Officer, Monsanto
  • Jim Knuth, Sr. Vice President, Farm Credit Services of America
  • Paul Schickler, President, DuPont Pioneer
  • Harry Stine, Founder, Stine Seed
  • Kirk Leeds, Chief Executive Officer, Iowa Soybean Association

Observations shared by the panel participants included:

Dr. Robb Fraley

  • Two billion people will join the middle class by 2015. This growth will require us in agriculture to double to food supply by 2015. That means we’re going to have to accomplish a lot in the next 30-40 years. How we increase productivity, reduce food waste and improve diets are chief questions.
  • I’m an optimist. There’s incredible innovations taking place in plant breeding. We can look at the DNA of every soybean seed, which is something that was once only dreamed about. Advancements in biology and information technology continue to occur.
  • We’re looking below the ground at soil health; mapping fields precisely and characterizing the bacteria in the soil. This gives me great optimism that we can double and triple food production across the globe.
  • The opportunity has not been brighter, assuming we can use these tools.
  • To do that, we must step beyond the science and focus on understanding the needs and wants of consumers. We have to make a very important case for these tools and technologies. When I think about food security, I think about national security and the role food security plays in a quality environment.
  • You’re seeing more collaboration and cooperation in agriculture in reaching out to consumers. There’s huge interest in food and understanding more about food production. The key is to provide that direct-to-consumer communication in the content and format they want and largely that’s both through traditional means as well as social media and the internet.
  • It’s amazing how many Silicon Valley companies are interested in the agricultural space. It’s going to be an exciting industry for a very, very long time.
  • We will meet the demand for food. The question will be the choices we have to accomplish that task. We must find support and common alignment on the important issues of the day.

Jim Knuth

  • The migration of livestock production into the upper Midwest continues. As we look forward, this will like accelerate. It is about economics and every time we have a cycle or a business event – drought, regulation change, feed cost advantages, etc. – it drives efficiencies in the industry.
  • Land ownership and control will continue to be an issue to monitor. As we look forward, we see local capital dominating land ownership and control. The data is pretty compelling. Over the last decade, more than 90 percent of the buyers in the market are local farmers and investors. Why? Because outside capital is focused on more immediate returns and less emotionally attached to an asset. That’s tough to compete against local capital which views land as a legacy asset and is more patient.
  • Machinery and equipment utilization business models will continue to evolve. Farmers are understanding that they generate profits from using machinery, not owning it. We see a normalizing of grain profit margins. This is going to drive changes. Farmers will allocate capital to the top and bottom of their balance sheets including input costs and control of land and property. It will be the middle of their balance sheet (equipment ownership/leasing) where they look for alternatives.
  • There’s speculation as to whether the ethanol industry will remain viable. There’s a base demand for octane in our fuels. Our engine performance depends on it. The industry is very strong and viable. As we look 10-20 years from now, we’ll have an ethanol industry in Iowa and the Upper Midwest. It will provide demand for corn and an affordable feed for livestock.
  • I’d like to commend the soybean industry. You are a leader in getting facts out and connecting with consumers. I commend this association for taking a very proactive stance with the launch of the Iowa Food & Family Project. Others in the industry need to do the same.

Paul Schickler

  • Collaboration – Pioneer has a long and successful and relationship with Iowa Soybean. We want to continue to promote the biodiesel industry and improve our infrastructure. This is one advantage we have in North America. Sustainability and nutrient management will require strong collaboration. Looking broader, collaboration is key within the industry, with competitors, with government and non-governmental organizations. This will be necessary if we are to meet the needs of the future.
  • Innovation – this is what DuPont Pioneer is all about. It’s what farmers are all about. We must improve yields and ensure those yields. It can be done through biotechnology and defensive traits. We must deliver performance when the combine goes through the field.
  • Biotechnology has delivered tremendous breakthroughs over the years, primarily on the input side. As we look at the next series of innovations, we need to look at the output side. This means creating products with greater value, for example in the oil side. But there’s greater opportunity beyond that – next generation science will do the same thing on the meal side – a value equation that delivers better oil and higher energy in the meal.
  • We need to ensure that new agricultural products are accepted and can be adopted broadly so they benefit people in the United States and around the world. We do that by focusing on the needs and wants of consumers.
  • The use of data. It’s needed to deliver optimum productivity. The more that we can use data to understand how to maximize yield but to better sustainability issues, environmental issues and right to operate issues – that’s a tremendous opportunity today and for the future.
  • Three will be tremendous shift in the number of people who move from the lower to middle class. When they make this move, they will need protein. It’s up to us collectively through innovation and collaboration to meet this demand.
  • Ten years ago, China was self-sufficient in soybeans. Today, they import nearly the entire production of Brazil. This is an example of the burgeoning demand that we, industry, science and growers, will need to step up and deliver.

Harry Stine

  • When I was a boy, 50 years was a darn long time and 100 years seemed to be before time. So trust me, today, 50 years doesn’t seem like much.
  • We can learn from this history. In the 1920s, we were growing around 20 bushels/acre of corn and there were some patches of soybeans that we cut by horses for hay.
  • How far we’ve come. So making predictions as to what will occur over the next 50 years is almost beyond my comprehension. Progress is happening faster all the time.
  • What I am concerned about is the social and political barricades to the progress of technology. When we have someone on the other side of the world tell what we can and cannot grow bothers me. We need groups like the ISA to bring clout to these issues.
  • Economics and science wins, but I’m sometimes concerned about the amount of time it takes.
  • We in agriculture should share the risk with the farmer. We all benefit when we do it.
  • I don’t know for sure what we might be growing 50 years from now. We may have new crops coming on. Economics rule and will take care of this. Consumers will eat and farmers will grow what economics dictates.

Kirk Leeds

  • Our ability to interact is critical, said Leeds, who also facilitated the 90-minute conversation.
  • We must collaborate. We must work together. It’s a more complex world and the need for collaboration and partnerships have never been greater. The challenge is to do it. I believe we’ve a long way on bringing together the entire chain – industry, companies, associations, academia – but we still have a long ways to go.
  • One would like to think that markets will work and that facts will always win. I’m not sure that is always the case and that’s troublesome.

Putze serves as director of communications and external relations for the Iowa Soybean Association. He can be reached at aputze@iasoybeans.com

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Soybean meal: a knight in shining armor for U.S. farmers

Commodity trade expert says soymeal will be primary driver of U.S. soybean market’s future

By Easton Kuboushek

(Des Moines, IA – Dec. 18, 2014) The exceptional quality of U.S. soybean meal is recognized globally and will be the primary driver of farmer competitiveness and profitability over the next decade.

The assessment, made by world commodity trade expert Emily French during the Iowa Soybean Association’s 50th Anniversary Symposium, is rooted in the exponential worldwide demand growth for protein.

“What’s so fascinating right now is we’re sitting in a period of time where there has never been more pressure on the world food system,” said French. “Yes, we’re going to have 9 billion people in 2050. But let’s not forget that there will also be income growth and emerging markets.” French suggests income, in addition to population growth, will drive the focus of those trying to feed a hungry world. As population grows, especially in China and India, the size of the middle class will increase and drive demand for higher quality food and protein. That, in turn, will drive demand for soybean meal.

“American farmers need to be best friends with meal,” said French. “It’s your knight in shining armor when it comes to improving soybean prices.”

In the past decade, China has driven demand in the world soybean market, importing over one-third of U.S. production in 2014. Who then, will lead the world in soymeal imports over the next 10 years? According to French – India.

“India to the world meal market will be what China is to the world bean market,” says French.

Further analysis by French on the outlook of world soy can be summarized in what she refers to as the “Soy Complex.” It includes:

  • Soymeal and protein demand is key – as goes soymeal, so goes flat price, crush margin and feed sector profitability
  • World vegetable oil market will remain a buyer’s market – multiple origins and oils competing for limited market
  • The Black Sea will impact the world veg oil market – both positive and negative mirroring the impact to the corn market
  • Price risk downside will not be as aggressive as market suggests – until the world “solves” the soymeal trade grid, downside price risk will not be as aggressive as world record ending stocks would suggest
  • The creation of a supply-heavy scenario – resulting from the rebuild and potential record world soybean ending stocks, a supply cushion of 115 days and expanded US soybean plantings that and expanded US soybean plantings.

Kuboushek is a communications specialist for the Iowa Soybean Association. He can be reached at ekuboushek@iasoybeans.com.

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