Checkoff prepared for fewer soybean acres in 2007
U.S. farmers should plant more soybeans in 2007 because of increased demand for soy products, but if they decide not to, the checkoff will remain financially stable, the new directors of the United Soybean Board (USB) said on Thursday.
During a teleconference, Eric Niemann, newly elected USB Chairman, and a Kansas farmer, told reporters the soybean checkoff, administered by the USB, had a good year in 2006, helping their 2007 goals of expanding international markets, animal agriculture, production research, new uses and other areas of importance for soybean farmers, and promoting biodiesel.
"Biodiesel is very much on the mind of the U.S. soybean producer and it's a great opportunity. We need to make sure we have a quality product to offer. To do that, we need to get more information to suppliers on how to handle, store, and transport biodiesel so the product meets the needs of the consumer," Niemann said.
The checkoff continues to fund the development and usage of biodiesel, which is expected to add $24 billion to the U.S. economy between 2005 and 2015, assuming biodiesel growth reaches 650 million gallons of annual production by 2015, according to USB directors.
Ike Boudreaux, USB's new vice-chairman, and Louisiana farmer, agreed biodiesel quality is key to capturing the alternative fuel market.
"Everytime this topic is brought up, quality is the concern. We have to have a good product," Boudreaux said.
Despite U.S. farmers expecting to increase corn acres and decrease soybean plantings in 2007, USB leaders say the checkoff will not be significantly affected.
"Our revenue collections have been running higher than we anticipated, so the checkoff is in a good reserve position to start with," Kent Gronlie, USB treasurer, said. In the budget process, we recently put an additional $1.0 million into a reserve, besides what was already in there. Plus, we are being conservative with our budget allocations in case of significant reductions in soybean acres."
Gronlie added, "History has shown that when there is a reduction in soybean acres, you also have an increase in price," Niemann said. "Our checkoff is based on value and not on production. So, we can see additional revenue with higher prices. But the market is variable and we'll see what happens."
Meanwhile, Niemann said the USB production committee is looking at ways that producers can boost soybean yields.
"We have not seen trendline yields go up as fast as corn, but it has been going up," Niemann said. "We are on a positive climb with yields, but we need to work on improving them."
The checkoff continues to promote U.S. soy overseas. Last year over 1.2 billion bushels of U.S. soybeans were exported. Exports to China have nearly doubled since 2000, from over 197 million bushels to over 350 million bushels in marketing year 2005/2006.
"For 2007, our charge is supplying the needs of our soybean customers here in the U.S., China and India," Niemann said. "Plus, we have great opportunities with exporting soymeal to Mexico. There's a lot of growth in soyoil products, and biofuels are changing the dynamics of the soybean industry."