Minnesota CropCast

David: 00:00

Good day, and welcome to the University of Minnesota Extension and CFANS podcast, Minnesota CropCast. I'm Dave Nicolai, University of Minnesota Extension crops educator, along with my co host Doctor. Seth Nave, University of Minnesota Extension soybean specialist. Well, back to another edition here of University of Minnesota podcast, Minnesota CropCast. And today, kind of a special day here in the studio because we have one of our cohosts, doctor Seth Nave, also going to be one of our guests.

David: 00:38

And we're gonna talk to Seth a little bit more about what he does in terms of travel, soybean development, etcetera. I should preface this and say Seth is the University of Minnesota Extension soybean specialist. And Seth, in terms of your work here at the University of Minnesota besides obviously your outreach and extension events here with Minnesota soybean producers from a production standpoint. You've been involved for a number of years or quite a long time in terms of the other side of the coin that is from a export, a marketing standpoint and talking a little bit more with some of our customers overseas and so forth in terms of soybeans quality, production aspects and so forth. So bring us up to date a little bit.

David: 01:27

What why? Well, maybe start at the beginning. Why are we doing this or why are you involved with this to begin with and how?

Seth: 01:34

Yeah. Maybe we'll go back to the very beginning. If there's time, I'll go back to the very, very beginning. But this is the very beginning of of my story anyway. I I started in graduate school at Iowa State working on soybean physiology, and my professor is very interested in protein and photosynthesis in soybean, nitrogen fixation.

Seth: 01:54

But he had some grants from Iowa Soybean to work on increasing the, you know, the overall nutritive value of soybean meal. And so they were really interested at the time in thinking about increasing cysteine and methionine. These are two amino acids that are limiting in in in animal feeds. A couple of amino acids that we end up providing with synthetics. So if we could if we could create a soybean that had higher levels of methionine and cysteine, then then we wouldn't have to add supplemental synthetic amino acids to the feed ration.

Seth: 02:29

So anyway, this is something I started working back back in the nineties. And so we made some really important discoveries. And one of the things that we basically discovered is, like with everything in soybean over my years I've learned, is there's just tradeoffs. And there happens to be a tradeoff in terms of protein quantity versus protein quality. So the more protein you have, that protein tends to get diluted with nonessential amino acids.

Seth: 02:57

So there's more protein there, but it may not be as high a quality protein that's remaining for the animals. And so we didn't really know why that was, but there was some dilution thing going on and basically left it there. So then instead of getting a professorship where I was doing a bunch of really cutting edge, basic research on soybean physiology, I took a job here at the University of Minnesota doing really highly applied work, so production related things and working in the field and doing extension work. And I chugged along for a couple years, but one of the first things I noticed was that Minnesota had was pretty well known for having low proteins producing low protein soybeans. So I started a soybean survey within the state to identify, you know, variation within the state that would help support kind of a national survey that was occurring at that time.

Seth: 03:53

And eventually, about 2026, I took over the national survey. So I started doing doing a survey of The US crop every year. So this leads us to think more about quality of soybeans. And I put this thing out to some farmers in Minnesota and said, well, I did some work on this. And, you know, it basically demonstrates that, you know, Minnesota soybeans are lower in protein, but the quality of that protein is probably better.

Seth: 04:21

Well, of course, at the time, the first farmers that I talked to about it said they heard that, and then they started repeating to their their counterparts in other states that that their interpretation of that was that Minnesota has better quality soybeans because they have better protein. Well, it's not exactly true. Our soybeans are really just not as bad as people think they are, is the easy way to put it. So they're undervalued in the global market. So I've done a lot of research around this, and we basically I did some of the first research that really indicated that lower protein soybeans in The U.

Seth: 05:02

S. And even other places tend to have better quality protein. So as folks buy soybeans and they measure them based on protein content alone, it's just not a very good measure of the overall value to the end user. So I put this out. And so the farmers in Minnesota and then ultimately in North Dakota and South Dakota developed a marketing program around this idea called the EAA Missions and EAA Message, and this is around a group called Northern Soybean Marketing.

Seth: 05:36

So we started to take this on the road and really promoting northern soybean production to international markets. So that's the beginning of it. I'll take a a breath, and maybe Dave can ask a follow-up question on this.

David: 05:49

So what you're saying or what you're telling the audience here was your involvement to begin within the surveys and that grew into other areas. And then somewhere along the line, whether it's this group or USB, your activity was noticed by other people in terms of trade groups. And at some point in time they wanted to say, hey, there's a person here at the U of M that's done this and this and this. They would be good to have involved in some of our trade missions and negotiations. So when when did that first happen?

David: 06:25

Did did someone read one of these papers and you get a call and say, hey, come along?

Seth: 06:30

I actually worked with a guy named Peter Mischick for many years. And Peter was a merchandiser of commodity crops, and he worked for AGP for years. He had a lot of experience overseas. And noticed the challenges in marketing soybean meal produced in this part of the world, in the Western Part of the Corn Belt, overseas because the buyers just would turn up their nose because the protein content was lower than they expected or lower than soybean meal that came out of The Gulf or out of South America. So he had been challenged by this all along.

Seth: 07:10

And so then I came with a message and said, hey, this soybean meal may not be as bad as folks think it is, and it actually has some real benefits. So he was the marketing guy, I was the science guy, and then we started making trips overseas around this question about promoting soybeans from the Western Corn Belt. The beauty of the program is really that the area that was the lowest in protein in The US also was really coincident with where soybeans and soybean meal get exported off the PNW. So the kind of the draw area, kind of the continental line for where soybeans go in Midwest, kind of cuts through Minnesota down through Iowa, and then it goes out all the Dakotas, Nebraska, Those soybeans tend to go to the PNW and exported to to Asia from that route because it's only half the distance and half the time. So what Northern soybean marketing is all about is promoting not only the value of those soybeans from a compositional standpoint, soybeans and soybean meal, but also marketing the logistics and export potential from that region, because there's a lot of value propositions for marketing or for purchasing for the Asian market to purchase from the P and W because of these questions about timing and shipments shipping cold and things like that.

Seth: 08:44

So it's all kind of coincident. And, yes, it all kind of came together, and we developed a really nice program around those messages.

David: 08:53

So in this last couple of years, when you've gone on some of these informational situations, trade missions, what you might take it where you were going along, Some of the funding is coming through the different auspices. We think about the Minnesota soybean growers as an entity that involves with some of the domestic politics. But there's another arm here in United soybean board that involves with the overseas trade. A little bit how that works, but you're over there what I would call maybe for lack of a better term, is it is it check off dollars per se? You know, to provide funding into that situation with that and is it expanded beyond the Upper Midwest?

Seth: 09:35

Yeah. So I don't want to get too far in the weeds, but I do do a couple different programs. I work with the US Soybean Export Council, USEC, as it's well known. USEC gets funding from both the soybean checkoff and from the federal government. So there's many federal programs, FAS, MAP, other programs, their its market assistance program is a well known program where the federal government puts some money into marketing US commodities, agricultural commodities overseas.

Seth: 10:12

And those programs, you know, grow and shrink depending on the governmental interest in marketing programs. But they're they're generally there's some funding there to help support those. And then and then putting that together with money from the Soybean Checkoff then provides a really nice partnership. And that's really the bread and butter for organizations like the U. S.

Seth: 10:36

Soybean Export Council. So I do a lot of work for U. S. Soybean Export. And when I'm working for them and supporting them, you know, their message is to market all U.

Seth: 10:46

S. Soybeans, and that's a valid thing to do. We want all US soybeans to disappear as as readily as we can. It helps everybody. But then I also work for a more narrow group of states as as in terms of supporting exports from the Upper Midwest.

Seth: 11:05

So right now, it's primarily just Minnesota and South Dakota, but this is what's the group in this northern soybean marketing group. And they basically take state checkoff dollars that would be used for their export promotion programs normally, and they just pool that money together. And that allows us to have a more cohesive program. So Iowa can have a very, very dedicated, large export program just from Iowa. The smaller states like Minnesota and the Dakotas probably just don't have the luxury of having the funds to have a huge program themselves.

Seth: 11:40

And so they've they've decided in part to at least put some of their promotion money together and fund a program. And that's the one I'm really highly integrated in, this Northern Soybean Marketing Group.

David: 11:51

So does that get back to maybe where you started in the beginning? Because obviously there's a message you can say, you know, hi, we're from The United States and we're Upper Midwest and we have soybeans for sale. And frankly, you know, everybody else does in South America, Brazil, Argentina. What is the message that you as Seth Nave are really bringing that's helpful? Is it amino acid content situation?

David: 12:18

How do you differentiate in terms of that answer questions? I know that you sometimes talk to specific audiences and some of these overseas people sometimes they're tied in with the poultry in that country or that region or they're tied in with other types of things. So what are you really bringing on the plate so to speak that is specific and think about our region, you know, to say, okay, buy our beans.

Seth: 12:47

I think where I can take this is actually an example of what our core message is. And our core message really is around this question that well, crude protein. And crude protein is actually just measured by it's crude because it's an index for protein. We don't measure protein directly. We measure the amount of nitrogen in plants, and then we we use a a calculation.

Seth: 13:13

We just multiply nitrogen by 6.25, and that magically gives us the amount of protein, which is fine, and it gives us a pretty good idea. But basically, we've we've set a value for crops that are protein focused around the value of crude protein. So the value of soybean and soybean meal is linked very, very tightly to the protein content. But again, that's just a measure of the nitrogen. And so what I've been able to show with the research that we've done here at the University of Minnesota is that crude protein doesn't even really is only loosely correlated with protein, the sum of all the amino acids in the seed.

Seth: 14:02

And the sum of those amino acids really only loosely correlates with the amount of essential amino acids in the seed. And the amount of essential amino acids isn't even is only partially correlated to the essential available amino acids, and that's what the animal needs. The animal only needs about 10 of those 20 total amino acids. Those are the essential amino acids that we talk about. And there's some of them that are more limiting in rations than others.

Seth: 14:35

And so really, we're supplying that soybean meal as a source of energy and a source of these most limiting amino acids to the animal. And that's what's important to the animal. On the other hand, people are buying this stuff based on crude protein, again, based on nitrogen. And nutritionists have known forever that nitrogen content or crude protein does not really isn't a very good predictor of overall performance of of of protein meals and feeds for the performance of the animals. So what we've been able to do is go overseas and talk to the nutritionists and feed mills and big integrators and say, Hey, you guys understand this.

Seth: 15:18

Can you go back and talk to your purchasing department and ask them to take a look at some of these soybeans from the Upper Midwest or from The U. S. If they've been buying South America before. Because we think there's a good value proposition here. You may get a better value with these soybeans that have maybe slightly lower protein, but the protein is actually more concentrated in these essential amino acids than you might expect.

Seth: 15:46

Or we just say, hey, why don't you use NIR? Why don't you better test this, better evaluate the meal coming and then tie that back to the performance of your animals. And we're pretty sure that U. S. And especially P And W Origin soybean meal will actually perform better.

Seth: 16:05

So we're really urging these feed millers and integrators to really do a better job of looking closely at where they're buying their soybean meal. And we feel that they that our products here are undervalued and underpriced. And so we feel that if if they could just make better purchasing decisions, that'll be good for their business, and then that'll be good for farmers in the Upper Midwest.

David: 16:33

So I'm gonna ask you this straight out question. Have you been successful? Have you seen over time in the last number of years that you've been doing this that you've, as part of a team, been able to quote tip the scale, to speak, in some of these markets or or countries in in terms of realization, probably in order that type of thing? Can you point to some things where you felt that message has made a difference?

Seth: 17:02

Well, I'll give you three different examples. One is this is kind of a weak argument, but I would say that one thing that we did was we basically changed the language around soybean in the whole U. S. By encouraging these northern states to take on this message about amino acids, what it did then was then, you know, at first ten and fifteen years ago, The U. S.

Seth: 17:28

Folks at a greater level really pushed back on this message because they really thought that we were just pushing northern soybeans at the expense soybeans from other states. And there was some competition with Illinois soybeans and things that maybe had higher protein at the time. But the reality is is that that message then pretty well got embraced nationwide and now fairly globally. And so it's not only is it our message, but it's a message of the whole US export system. And there's a lot of discussion around measuring amino acids, frankly, because we started this kind of thing in the North.

Seth: 18:09

So now that doesn't say that we're necessarily successful in terms of marketing, but it does give me some hope anyway that others at least have felt this is a good marketing message. So I think we've done really well there. It's harder to know where we've really made progress in terms of the market because the market is still driven. The purchasing departments really are buying the cheapest product they can buy or buying by logistics or by credit or whoever their local supplier. And they may have relationships with ADM or Cargill or Bunge, and those folks may be offering beans or meal from certain regions.

Seth: 18:59

Or those origins may be optional on those contracts, and they may just take whatever they're getting. So oftentimes it comes down to price and availability that ends up trumping this quality message. But it does keep quality in front of the buyers all the time. Because we've been in these countries and talking to them repeatedly, I think there's more consideration of quality. Even if that doesn't make the initial purchasing decision, it's still more in the background of their minds, and they're thinking about it.

Seth: 19:36

And lastly, we can talk about some changes that have been happening recently. But I would say that one really great part about being in some of these destination countries is even if they're not buying US soybean meal now, they might have access to it in the future, especially when the markets get so disrupted with some of this trade stuff that's been going on in the last year and a half or so. There's gonna be an opportunity for individual buyers to have access to soybean meals that they have not seen before. The nutritionists will have to feed with something they may not have been used to. But we've been over there talking with them multiple times, talking about amino acids.

Seth: 20:16

They can then better test those meals, better test the overall quality, and they may find that they can actually provide produce a higher functioning feed from those soybean meals than they would have expected before because they're integrating this amino acid piece or the energy part or the digestibility piece that we've been talking about recently on these missions. And so I think just marketing is hard. You have to be in front of people a lot of times repeat yourself a lot. But I think that there's a real opportunity for us.

David: 20:57

In the time we have left, why don't we talk a little bit about some more recent activities in terms of providing this educational message where you have spent some time. I know that recently you had an opportunity to travel to the Vietnam area, but there's been other areas as well and different drivers in terms of livestock, poultry in its situation. But there's intermediaries as you mentioned. It's not a one stop shop when you necessarily go to these areas and with Bayer. But I think people will find that interesting.

David: 21:33

Going to Vietnam, it's not like, okay, we're gonna get in a car and drive over there. It's a long trip. And you really have to be planned out on these things and have some people on the other side.

Seth: 21:43

Yeah, and I will, just to back up a little bit, I will say also we're really, we've started out as a group that was really promoting meal exports. And I wasn't sure, I've never been really convinced that that was really should be our bread and butter because, you know, most of our soybeans go off as whole soybean. More go off as whole soybeans than meal. And I thought we had opportunities in countries that buy soybeans like North Asia, Japan, and Korea, and places like China that do their own crushing. I really had a you know, tied to those countries, and I really like to see whole soybean exports.

Seth: 22:23

But we were really talking about soybean meal a lot. But that's really come around to our benefit because now we're in a world if you heard the last podcast, we talked to Ed Assad about increased crush in The US. So there's going to be more meal available from The US. We've got at least 25% more meal available to be sold from The US than there was just five years ago. That means theoretically, we should see lower prices.

Seth: 22:53

So there's more availability at a lower price, more competitive with South America meal. So we should be able to sell more meal into these countries than we have been. And so it's a perfect time to be in front of them and say, hey, you may not have seen US meal before, but there's going to be more meal available, and you're gonna have access to US meal. And so when you do get a shipment, here's what you need to look at in terms of putting that into ration. So a good example of that is Indonesia.

Seth: 23:24

So you ask about where I've been. Back in January, we're in Indonesia. Indonesia is a really, really interesting market. I'm gonna contrast Indonesia and Vietnam. They're kind of similar markets in terms of the quantity of beans and meal that they're purchasing.

Seth: 23:41

Indonesia buys about two and a half million metric tons of soybeans a year. Those actually go primarily into tempeh and tofu. Indonesia is a very, very large Muslim country. Per capita income is not great. They're highly dependent on vegetable protein for diets, and tempeh and tofu are staple products for them.

Seth: 24:10

They use a lot of soybeans to feed their population directly. So those soybeans are coming in for food use. They cannot afford to purchase IP soybeans that are cleaned and bagged in containers like the Japanese do. They want to buy whole vessels of soybeans that they can maybe size and grade to send out for various uses. They're okay with traded soybeans in their food consumption because they want something that's reasonable to purchase.

Seth: 24:42

They love US soybeans because of the physical quality characteristics of those soybeans that they can buy. So they're, again, they're buying whole vessels primarily, some containers, but lots of whole vessels for their food use. And those are coming, again, GM soybeans, and they're utilizing those. And some of those will come cleaned, precleaned in containers, and some will come by vessels as number one or better in a lot of cases. But very, very loyal US customers for soybeans because they want that physical quality, clean, nice, bright color, light color that makes a higher quality food product directly.

Seth: 25:25

On the other hand, their soybean meal, because they're a price conscious customer, they've been buying about six and a half or 6,000,000 metric tons of soybean meal a year. So, again, more than twice as much meal as beans. But they're buying exclusively from Brazil historically. Okay? When we were there, though, we learned that the government is really of Indonesia is really interested in setting up more control over imports.

Seth: 25:59

They are claiming it's for food security interests. It may be a mechanism in order to them for them to to to fulfill promises to the current administration in terms of purchasing of agricultural products. So their governmental agency is going to start purchasing and managing purchases of soybean soybean meal coming up this summer. When they do that, then these companies are going to have to buy their soybean meal from the government rather than from the individual companies themselves. And they might end up seeing some U.

Seth: 26:37

S. Soybeans for the soybean meal for the first time. So when I was there in January, we were talking directly with these nutritionists and saying, Okay, when you see The U. S. Meal, here's the kind of characteristics you'll see.

Seth: 26:50

These are kind of some of the things that you should look at. This is the value proposition. You can reduce your synthetic amino acid inputs. Maybe you could reduce your safety margins in some of your additives in order to make these rations more economical for you. So then just last month, was in Vietnam.

Seth: 27:12

Very similar sized markets in terms of what they import on soybeans versus meal, but they're a little bit the opposite. Again, a very different country. So this is a country that they're buying soybeans primarily for their own processing and then and then meal to feed to go into rations directly for animal for for meat production. So in Indonesia, obviously, they don't have a swine industry, but Vietnam has a very, very strong swine industry. Indonesia is almost entirely poultry that their feed goes into.

Seth: 27:47

On the Vietnam side, it's swine, poultry, and a significant aquaculture market that's certainly growing over time. They're buying 2.5 to 3,000,000 metric tons of soybeans, but those soybeans are coming from Brazil primarily. On the other hand, their meal is about similar to Indonesia, around 6,000,000 metric tons a meal. And they're buying primarily from Brazil as well, but The US is about 15% of their market right now. So there's a real interest, similar to Indonesia and Vietnam as their government would like to see more, more agricultural imports from The US to fulfill some promises, to the Trump administration.

Seth: 28:34

So there's a real opportunity there for them to see a little bit more soybean meal as well as soybeans. And so we're in front of them talking, and we know states, various states all over The US or in Vietnam. Everybody's hunting for that market right now. Everybody wants to get on it. But I think that we had a really good message.

Seth: 28:55

Getting out to the end users and talking to feed millers and those integrators has been really helpful for us. So I droned on and on about those guys, but I thought that those two recent stories were kind of interesting and have a nice contrast with with how we're approaching those markets.

David: 29:12

Well, I appreciate that, Seth, because it certainly gives our listeners a glimpse or an insider view in terms of what's happening. It's it's kind of a little bit like inside baseball here, but it's bottom line is, you know, it's it's not just a simplistic, here we have and here's our quantity and we're reliable partner but we have a strategy going forward in terms of the quality of the amino acid. Then basically I like the fact that you're doing a customized sales approach so to speak to fit their situation or technology. But certainly it's not a one size fits all you know, market in some of these situations because there is competition and we do have a lot of, you know, things that go on. You know, it's not just China, but we wanna keep these other markets.

Seth: 30:07

Yeah. I think there's a really important part there that I have to reemphasize. I think I maybe alluded to it earlier, but the really key part here is that the reality is the soybeans and the soybean products, meal and oil, are produced in the Western Hemisphere. They basically end up getting utilized globally over the course of the year somewhere. If China's not buying from The US, that means they're buying Brazilian and Argentine soybeans primarily.

Seth: 30:38

That means customers that had been buying from them, maybe those some of those sources may be a little bit tighter. And so then that frees up some more US soybean market to go into areas that maybe not hadn't been there before. So not only do we have a China a big China effort effect here where China shifts their buying, that that recirculates where the rest of the soybeans go in the world. But then we also have some trade things related to the Trump administration, and fulfilling these promises to purchase agricultural products. Those fit in there too.

Seth: 31:19

And so the reality is what happens is this with this marketing effort, we've been going to these countries for ten or fifteen years, and we see a little bit of movement but not a ton of movement. All of a sudden, this thing gets shaken up. The market's all screwed up because of all this geopolitical stuff going on. And this actually, as much as it's it's frustrating and challenging with with a down market and challenging markets, it actually is the time to get into some of these places and really, really promote Minnesota soybeans and soybean meal from the Western Part of the Corn Belt. It's a perfect time to do it.

Seth: 31:54

I can't help but think that this you know, we don't have the data that directly correlates with what the value or the impact is. But I really have to believe that this is the right time to be out there promoting products, especially when we're we're down a little bit in terms of local price.

David: 32:11

So there is obviously people think about marketing, advertisement. You know, you have to have the consistency because, you know, you don't wanna be in a situation where you're out of out of sight, out of mind. Even if you don't have a large increase in there, it it's maintaining that visibility in a number of different ways. I was gonna ask you one last question. Do you still do the survey or is that still done here in The US or in the Upper Midwest to have a baseline and watch this over time if things are changing in terms of protein and amino acid as different varieties come on stream?

Seth: 32:47

Yeah, we conduct a survey of The US soybean crop. That survey started in 1986 at Iowa State University. Doctor. Charlie Herberg, who's now retired, he ran that program through 2005. So he had twenty years of data that fed into that program.

Seth: 33:03

It was funded by American Soybean Association and United Soybean Board over time and USEC at some points. I took that project over in 2006, so that means I've run the program for twenty years. So we've had forty years of data from one program. It is the source of information that The US and global folks use in terms of the protein and oil, amino acids, fatty acids, and soybeans, sugars. It's the it's the benchmark for US production annually.

Seth: 33:38

So it's the one that gets reported out in all the the the farm media and internationally. Take that take that report overseas in the fall and talk with potential buyers about that. But, yes, it's it's still the benchmark. It still provides a good value for us. We need to do something like it with soybean meal.

Seth: 33:57

We don't have a current we don't have a current meal program, but I think it's something that when we get a little bit more checkoff dollars back in the system, I think we can get another meal survey put into place.

David: 34:09

Well, great. Any last words here for today's audience that you would like to provide? Otherwise, I think we've covered it very well.

Seth: 34:18

Yeah, I think there's one other thing I wanted to mention, but I don't remember what that is, so I think we'll just leave those last thoughts for another day. How's that sound?

David: 34:25

Well that sounds fine because we know where to find you and and obviously we'll continue that. We'll have another opportunity and you'll be making future trips and educational opportunities here not only overseas, but United States. But I should mention, we also do that with with folks coming to Minnesota and to the Upper Midwest.

Seth: 34:47

For sure. Right? That's a really good point, Dave. I forgot to mention the other side of this. We have trade missions that come over.

Seth: 34:54

Various groups bring folks from that are primarily soybean purchasers or end users from overseas. They come through Minnesota a lot because we have Minnesota hosted groups and regional hosted groups. But Minneapolis is a great place to fly in and out of. A lot of groups come into Minneapolis and maybe fly out of Chicago. So we're we're good hosts here at the University of Minnesota.

Seth: 35:20

We can show them plots and and field. We can show them soybeans in season and show them the labs, and then they can get out and see farmers and processing plants nearby. So it's really, really great to have international purchasers and end users come come visit us here. It's it's really a lot of fun.

David: 35:38

Well, thanks, Seth. This has been a good update here. A little bit of your activities and opportunities and marketing for US soybeans and Minnesota soybeans as well. Well, this has been another edition of the University of Minnesota podcast, Minnesota CropCast. I've been obviously one of your hosts here Dave Nicolai with University of Minnesota.

David: 35:56

I'm an extension crops specialist in region here in Minnesota along with my cohost and today's guest Doctor. Seth Nave, University of Minnesota Extension soybean specialist and thanks for listening.