Beyond the Pump

By Candace KrebsBeyond the Pump

The first USDA crop production report of the year made it official: Illinois continues to lead the nation in soybean production. In 2019, the state’s farmers harvested 532 million bushels from 9.9 million acres, for an average yield of 54 bushels per acre.

According to the latest figures, 40 percent of those beans will be crushed in Illinois, with the bulk of the resulting oil and meal going to make biodiesel and livestock feed.

Illinois is both a leading producer and consumer of biodiesel. It’s the fourth ranking state nationwide with a production capacity of 184 million gallons, according to the U.S. Energy Information Administration. What’s more, the biodiesel industry has a synergistic relationship with the livestock industry that fuels the success of both. Together they make for a powerhouse income generator, directly contributing to 70,000 jobs across the state.

“Soybean meal is a game-changer,” says Nic Anderson, business development director for the Illinois Livestock Development Group (ILDG). “It’s why the U.S. animal agriculture industry is so efficient. There’s really no other protein source on the market that can provide the same level of feed value. It is uniform, reliable and consistent. And we’d like to feed more of it in Illinois, since it’s such a great protein source.”

Fueling Pickups, Pigs and People

The same properties that make soybeans an ideal feedstock for biodiesel — ample availability, high fat and oil content — also make them applicable to an almost unimaginable array of different uses, from consumer goods like crayons, candles and shampoo, to industrial applications that include everything from air conditioning filters to asphalt, to ingredients in food and pharmaceutical products.

In terms of sheer volume, however, the synergistic juggernaut of fuel and feed trumps everything else. This powerful combination allows farmers to get the most value possible from the soybeans they grow while helping to fuel the state’s economy.

Unfortunately, some of that potential is being left on the table, according to Anderson.

ILDG stepped up its efforts in 2004 after identifying that livestock receipts in Illinois had shrunk over the past decade, while livestock receipts nationwide had risen 40 percent.

And it’s still true today that increasing the state’s hog numbers, and to a lesser extent, its chickens and cattle, is the fastest way to boost soy use in a way that really moves the needle, nearly doubling economic activity generated from every $100 of output, he says.

Anderson blames a combination of regulation, tax structure, transportation and urban pressures with causing a lag in growth compared to other Midwest states. That means Illinois is missing out on the chance to satisfy a worldwide pork deficit, created by an outbreak of African swine fever, coupled with rising meat demand, driven by the world’s expanding middle class.

“We need to find a way to put another 500,000 pigs on feed and another 100,000 cattle on feed in Illinois,” Anderson says. “Last year, in Illinois, we put up about 60 new barns (the equivalent of 150,000 to 200,000 pigs). We’ve been doing that each year for the last 20 years, and it’s been viable, but we have the feed resources to easily double that.”

He argues no goal is more important than adding more value to locally grown feed crops and boosting rural economies by supplying more of rising worldwide demand for meat.

“We need to feed more livestock in the U.S,” he says. “If we don’t do it here, they will do it somewhere else in the world.

“Let’s own the market,” he adds. “Keep corn and soy here, feed it and get the best value out of it. Quality is highest when it’s right out your back door. The farther you get from the source, the more quality degrades. The only way to solve that is reducing the price.”

beyond the pump

Adding Value, Enhancing Sustainability

The fastest rate of market growth will come by exporting pork rather exporting soybeans or meal, according to the U.S. Meat Export Federation. USMEF estimates a third of all growth in Illinois soy exports between now and 2028 will come by feeding it to pigs.

More than a quarter of all U.S. pork production is now being exported. In Illinois specifically, between 2015-2018, USMEF says one in every 10 tons of soybean meal production growth went into pork bound for export. Bottom-line, those pork exports added 85 cents per bushel to soybean prices in the state, or about nine percent.

Considering objections by the public and others toward confined animal feeding operations, it’s not clear how the Illinois pork industry can grow much faster than it already is. But one thing the soybean industry is doing is working to increase feed value of its meal, and, by extension, pork’s profitability, marketability and competitiveness.

The Illinois soybean checkoff continues to promote its innovative High Yield PLUS Quality (HY+Q) project designed to increase the feed value of soybeans by encouraging farmers to plant varieties that feature high rankings for livestock feed value. The program researches soybean varieties and identifies which ones offer the best feed value based on amino acid profiles that are critical to livestock growth and productivity. Improvement in feed quality resulting from more widespread planting of high-value varieties could conceivably help hog producers save as much as 80 cents per head on feed costs.

“The more efficient agriculture can be at delivering food with reduced costs per unit of input, the more sustainable the food production system will be,” says John Osthus, HY+Q lead. “Feed efficiency is likely to become an important sustainability metric in the future. Many supply chain managers are already discussing adding feed efficiency to their increasingly sophisticated sustainability modeling. Farmers who plant high-quality soybean varieties not only contribute to sustainability efforts for themselves and for their industry, but also for livestock producers and that industry sector as well.”

Efficiency Improvements Grow Markets

The issue of responsible food production and resource management is reverberating around the world, fueling implications for U.S. ag exports.

“Sustainability is a very important topic. It’s getting a lot of focus in the global supply chain,” says Abby Rinne, director of sustainability for the U.S. Soybean Export Council.

The U.S. soybean industry already offers a sustainability assurance protocol to foreign buyers seeking sustainably produced products but hopes to expand those efforts in a way that could also boost the U.S. livestock industry. About 40 percent of all exported soy ships out with a sustainability certification, according to Rinne.

“It’s being used a lot in European and Asian markets and in the Americas,” she notes. “What we want to find out now is whether it’s feasible to put that same logo on meat that gets exported. We are in the exploratory stage of studying how the supply chain works, to see if meat produced with sustainably produced soy can be labeled with the logo, too.”