ISA Special Feed Quality Alert #12 — Soybeans Support Rural Economies

The Cost of Ignoring Soybean Quality to Soybean Farmers and Rural Communities

The importance of soybean production cannot be overstated—to state and local economies—as well as an essential feed source to the interconnected livestock industry.

According to data¹ from the Illinois Soybean Association, in Illinois alone, soybeans contribute nearly $7.48 billion to the state’s economy. Approximately 43,000 growers devote more than 10 million acres of farmland to soybean production, and hogs consume about 74 percent of the soybean meal fed in Illinois. Soybeans are an excellent source of essential amino acids, a key component of livestock nutrition.

Yet, soybean markets face serious challenges as evidenced by a decline in relative feed value accompanied by a 70 percent drop in swine diets over the past 30 years. The Illinois Soybean Association’s checkoff-funded High Yield + Quality (HY+Q) program is helping soybean producers learn how they can address these declines through improved variety selection and understanding of the importance of soybeans in livestock feed and to soybean end-users.

The stakes are high.

The following example provided by a single hog-rearing organization shows how the use of feed ingredients other than soybeans impact the future of soybean production in Illinois and throughout the industry.

“The comparison in soybean meal (SBM) usage at Hanor Company since 2000 is stark but reflective of the industry,” explains Dr. R. Dean Boyd, Technical Director Emeritus, Hanor Company and Triumph Foods Group, Adjunct Professor of Animal Nutrition at North Carolina State University and Iowa State University.

The 90,000 sows at Hanor produce 2.45 million pigs per year. To economically meet pig nutrition needs as soybean meal protein and amino acid content declined in recent decades, the company has altered its annual feed purchases as shown here:

• 6,222 fewer semi-loads of SBM (25 tons/load)
• 6,060 more semi-loads of corn; corn by-products (DDGS)
• 46 more semi-loads of synthetic amino acids
• 116 fewer semi-loads animal fat (less SBM = more net energy in the ration)

Assuming an average soybean grower produces 58 bushels of soybeans per acre on 1,600 acres, for just this one swine producer the annual decrease in SBM use requires 56 fewer soybean growers to meet annual soybean meal needs, Boyd estimates.

While the displaced soybean acres will likely be transitioned to corn production, the financial implications of a shrinking market to the soybean industry and rural communities must be considered.

For instance, calculate the economic and social loss of 56 soybean growers to rural communities and infrastructure. Keep in mind that, according to ISA, the soybean value chain² has a 2.75 multiplier effect, meaning that for every $1 in gross product generated by the Illinois soybean industry, another $2.75 is created.

The job multiplier is even stronger. Every job within the soybean value chain supports another 5.53 jobs elsewhere in the state’s economy.

Then multiply this example across the livestock industry and across the United States, and it quickly becomes apparent that increasing soybean feed value is an incredibly important issue for soybean growers and the communities in which they live.

To learn more about the HY+Q program and its efforts to elevate soybean quality, visit Soyvalue.com.

Watch for the next email in this series which will share the sustainability implications of raising high-value soybeans.
 

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1. Illinois Soybean Association. Soybean Facts. Accessed February 28, 2019. Available at: https://www.ilsoyadvisor.com/about-soybeans/soybean-facts.
2. Economic Impact of Illinois Soybeans. AgriView. May 7, 2017. Accessed February 28, 2019. Available at: http://www.agrinews-pubs.com/markets/economic-impact-of-illinois-soybeans/article_9a447440-5d51-562a-9445-ccd2c3ba467c.html.