1. Production, Market, and Expected Return December 2008
Organic Soybeans
Production, Market, and Expected Return
December 2008
copyright eStudy.us 2008

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. copyright eStudy.us 2008 michael.roberson@eStudy.us
Appendices
For additional details see the following websites
Grants:
Profitability:
Disease Maintenance:
Risk:
Nutrition Facts:
No-tillage:
Additional Information:
copyright eStudy.us 2008

22. copyright eStudy.us 2008 michael.roberson@eStudy.us
Appendices
For additional details see the following websites
Kentucky Specific:
copyright eStudy.us 2008