Production, Market, and Expected Return December 2008 Organic Soybeans Production, Market, and Expected Return December 2008 copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Overview Climate and Production A lot of sun Can mildew if in too moist of a climate Plant when ground is 65 degrees Similar to the production and farming of non-organic soybeans 100,000 to 150,000 live seeds per acre copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Nutritional Information Soya Beans contain the most protein of all the beans. excellent source of Lecithin, Vitamins A, B, and E, Calcium, Potassium, and Phosphorus Round in shape about the size of a pea and are a light creamy-yellow color. copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Market Opportunities International Japan, United States Tofu Soy products Meat substitutes Feed for organic livestock $11 to $18 per bushel copyright eStudy.us 2008 michael.roberson@eStudy.us
Production Characteristics General Government Regulations No synthetic fertilizers for three years No synthetic pesticides (fungicides, insecticides, herbicides) for three years Crop rotations (at least three out of four years) breaking up weed, insect and disease cycles and maintaining soil fertility copyright eStudy.us 2008 michael.roberson@eStudy.us
Production Characteristics Planning Ensure all grasses are dead plow in the fall prior to October plant a cover crop of winter rye to help with erosion, and weed control Planting Wait a week for the disturbed weed seeds to germinate, a second field cultivation will kill the remaining rye crop. Plant soybean seed at least 1” deep when the ground has sufficiently warmed (June) copyright eStudy.us 2008 michael.roberson@eStudy.us
Production Characteristics Planting Continued rotary-hoe weeds 3 to 5 days after planting at a slow speed (5 mph) for good penetration; at 7 to 10 days (once beans have emerged), hoe again a little faster (7-9 mph) to enhance surface aggressiveness copyright eStudy.us 2008 michael.roberson@eStudy.us
Production Characteristics Disease Prevention Nematodes plant varieties that are resistant to the nematode (and race) present in your field. Crop rotation of at least two years Asian Soybean Rust Early maturity groups or early planting may be better than late maturity groups or late planting copyright eStudy.us 2008 michael.roberson@eStudy.us
Production Characteristics Weed Control Rotary hoe early broadcast cultivation (blind cultivation) Pre plant rotary hoeing (stale seed bedding) No- Tillage control erosion, save labor, save wear and tear on equipment, and save money copyright eStudy.us 2008 michael.roberson@eStudy.us
Production Characteristics Harvesting Harvested at or below a moisture level of 13% Prior to harvest, equipment should be carefully cleaned to prevent contamination The visual appearance of specialty soybeans is very important For storage, facilities must be clean, dry and free of any human toxins copyright eStudy.us 2008 michael.roberson@eStudy.us
Production Opportunities Capital Requirements Since production of organic soybeans is so similar to soybeans, the same equipment can be used, just cleaned really well to prevent contamination Opportunity Cost Crop rotation is very important so other crops can be grown in subsequent years Mainly corn is planted copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Revenue Revenue sources Soybeans for soy products Secondary sources : feed for organically grown meat Grants Organic Farming Research Foundation Since 1990 has granted over $2 million for those interested in growing organically copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Product Costs Table 2. LTAR soybean economic analysis, ISU Neely-Kinyon Farm, 1998 Production Costs (actual cost per acre) Organic Soybeans Conventional Soybeans Moldboard Plowing $8.10 8.10 Disking $4.00 Field cultivation Fertilization $0 Planting $9.00 Seed $31.60 $22.00 Herbicide $10.38 Sprayer $2.50 Rotary Hoeing (2x) Row Cultivating (2x) $7.00 Hand-Weeding $14.00 Combining $21.00 Hauling Grain to market $0 (FOB per contract) $3.00 copyright eStudy.us 2008 michael.roberson@eStudy.us
Expected Return Report Organic Conventional Production ( 17 acres) 17 acres Cost per acre $102.70 $108.98 Returns $850.00 50bu/A x $17.00/bu $312.00 48 bu/A x $6.50/bu Profit per acre $747.30 Excluding price of land $203.02 copyright eStudy.us 2008 michael.roberson@eStudy.us
Financial Considerations Initial investments land preparation purchase of seeds Production Costs specialty soybeans estimated at $85-$100 per acre, with additional costs for varieties seed costs greater than $18- $25 per acre. copyright eStudy.us 2008 michael.roberson@eStudy.us
Financial Considerations Harvest and Marketing Costs $15-$35 per acre (bringing total costs to about $100-$135 per acre) transportation costs to market copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Risk Market Risk Organic as an ending social movement Lack/loss of corporate contract Production Risk Erosion Weeds Disease copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Risk Financial Risk 3 years of certification process Loss of current crops while de-toxicating land Time for education At least 3 years until see a profit Rotation of crops that might not sell organically Loss of initial investment if market or production risks arise copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Basic Summary Market Opportunity Market for organically grown soybeans is rapidly growing especially internationally Soybeans are used in a variety of products producing a demand Advantages for Kentucky Farmers Climate is similar to Illinois’ and North Carolina’s successful organic soybean farms copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Basic Summary Final Remarks Good alternative for current soybean farms or current organic farmers due to similar practices and equipment The financial and production risks are greater than traditionally grown soybeans, however, as are the profits copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Appendices For additional details see the following websites Grants: http://ofrf.org/grants/grants_awarded_since_1990.pdf Profitability: http://www.ky.nrcs.usda.gov/news/NoTillClark.html http://www.progressivefarmer.com/tabid/1233/Default.aspx Disease Maintenance: http://www.organicgrains.ncsu.edu/pestmanagement/soybeandiseases.htm http://www.organicgrains.ncsu.edu/organicresearch/research.htm Risk: http://www.plantmanagementnetwork.org/pub/cm/symposium/organics/Wolf/ Nutrition Facts: http://www.purcellmountainfarms.com/Organic%20Soy%20Beans.htm No-tillage: http://www.ky.nrcs.usda.gov/news/NoTillClark.html Additional Information: http://cropsoil.psu.edu/extension/facts/agfacts64.cfm http://extension.agron.iastate.edu/sustag/resources/soycrp.html http://agpolicy.ky.gov/kcade/documents/Soybean_Mkt_Opps_Final.pdf copyright eStudy.us 2008 michael.roberson@eStudy.us
copyright eStudy.us 2008 michael.roberson@eStudy.us Appendices For additional details see the following websites Kentucky Specific: http://attra.ncat.org/sorg/ky/certified.html http://www.certifiedorganic.bc.ca/rcbtoa/training/vegetable.htm http://www.omafra.gov.on.ca/english/crops/field/news/croptalk/2006/ct_0306a5.htm http://attra.ncat.org/new_pubs/attra-pub/organicsoy.html?id=DC http://www.uky.edu/Ag/NewCrops/introsheets/specialtysoy.pdf copyright eStudy.us 2008 michael.roberson@eStudy.us