2019 Kansas Soybean Commission Report
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2019 Kansas Soybean Commission Report Chairman Highland and members of the Kansas House agriculture committee: I am Kurt Maurath. My family farms in Logan County, and I am chairman of the Kansas Soybean Commission (KSC). All U.S. soybean farmers participate in the soybean checkoff, contributing a half-percent of the price we receive for each bushel, which is collected at the first point of sale. Half of funds collected in Kansas remain here and are managed by the Kansas Soybean Commission. The other half is forwarded to the United Soybean Board (USB) comprised of 73 farmers from the other 25 soybean producing states who pool those funds for a nationally focused research and market development program. Our commission is comprised of seven soybean farmers elected by our peers in our districts through a process the Kansas Department of Agriculture (KDA) conducts, and we then appoint two commissioners-at-large. All of us volunteer our time to serve on the Commission and oversee the investment of checkoff funds in projects to benefit our industry specifically with Kansas in mind. In fiscal year 2018, as you can see on page 3 of the Soy Notes newsletter in your handouts, our net checkoff collections were slightly more than $4.6 million, and we disbursed nearly $4.7 million. We were excited to have another record harvest this year. While harvested acreage dropped from 5.1 to 4.8 million acres, our yield increased from 37 to 41 bushels per acre, increasing the Kansas soybean crop to 197,210,000 bushels. Prices are currently lower than last year, but the value of the 2018 Kansas soybean crop is estimated at about $1.7 billion slightly less than 2017. The stocks on hand from past years and the large production this year, combined with the trade war with China have put pressure on soybean sales. Soybean commissioners understand that we have a big job on our hands to find and sustain markets for all those soybeans. Our handouts include our latest marketing plan, which summarizes this fiscal year’s program with a list of the partner organizations we have joined to leverage our time, talents and financial resources. Since soybeans are comprised of 80 percent meal and 20 percent oil, we have a multifaceted marketing program plus a complex production and utilization research effort. The summary of our production research includes projects in soybean genetics, pests, diseases, nutrients, weeds, and management systems mostly done at Kansas State University’s (KSU) departments of agronomy, plant pathology, entomology and grain science. We also fund industrial utilization research at KSU, biodiesel research at the University of Kansas (KU) and soybean oil to polymers research at Pittsburg State University (PSU). The Kansas Biodiesel Consortium (KSU, KU, PSU, North Central Kansas Technical College and Seward County Community College) recently won an award from the Kansas City Metropolitan Energy Center for their cooperative biodiesel effort in Kansas to educate their students, our target markets and the general public, dispelling the myths that often accompany alternative fuels. Page 1 of 4 International market development is crucial to our future. Exports account for nearly 60 percent of U.S. soy demand; therefore, overseas markets play a big role in our profitability. U.S. soy has the fewest trade barriers among all world agricultural exports, allowing soybeans to have more access than other commodities. The U.S. soybean industry has taken advantage of that. Total U.S. soybean exports have nearly tripled since 1986, from 757 million bushels to over 2 billion bushels in 2017. China, our biggest customer, purchased more than $12 billion of U.S. soybeans in 2017. The current trade war with China has of course reduced sales to that country, stressing the price we receive as farmers. This has taught us to work to better diversify our international market development efforts, so we can attempt to stabilize those sales and not depend so heavily on a single market that has at times set up non-tariff barriers, not complied with agreed upon World Trade Organization guidelines and competed unfairly in the international world trade arena. The Commission’s soybean, soybean meal and oil international marketing efforts primarily are enacted through the International Grains Program Institute at KSU, the U.S. Soybean Export Council and the World Initiative for Soy in Human Health. We also work with our state export- marketing representatives within KDA and Kansas Department of Commerce Ag Marketing. Because animal agriculture uses 98% of the soybean meal produced in the U.S., we also provide funding to the U.S. Meat Export Federation and U.S.A. Poultry and Egg Export Council to assist the U.S. pork, beef, poultry and egg producers to export their products. Turning to education, we proudly support KSU’s Summer Soybean Science Institute and the Kansas Foundation for Agriculture in the Classroom, providing more than $10,000 each year to maintain educational resources and provide new delivery methods and lesson plans for Kansas teachers. We also reimburse Kansas junior high and high school food and consumer sciences teachers for soy, meat, dairy and poultry products they use in their classes as they explain to the students from where their food comes and the importance of agriculture to their lives. We also fund the efforts of the time honored farm youth development groups, FFA and 4-H. The Commission’s own domestic consumer-information program tells the public about convenient, healthful soyfoods and promotes industrial soy products like soy-based inks, adhesives, paints, stains, sealants and insulation. Our greatest industrial uses success story is biodiesel. Biodiesel helps drive demand for U.S. soy oil and plays an important role in the nation’s overall energy strategy by fueling state and municipal governments, school districts, the Defense Department, farming and mining equipment, cruise ships, commercial motor carriers, and home heating systems. This is truly a soybean checkoff success story, as the checkoff started the development of biodiesel 26 years ago. Over 50 percent of all biodiesel comes from virgin soybean oil, and 35 percent of all virgin soybean oil goes to biodiesel. It now boasts a 3 billion gallon market in the U.S. We have a full time biodiesel/diesel consulting company who works with our Kansas petroleum marketers and helps us monitor the biodiesel sold in Kansas for quality and quantity. In addition, they hold workshops at diesel mechanic schools in Kansas (and surrounding states) dispelling myths about biodiesel and educating future diesel mechanics on its properties, handling and ease of use. Page 2 of 4 We are pleased Cargill has nearly completed the construction of a 60 million gallon biodiesel plant in proximity to its soybean crushing plant in Wichita. We are assisting Victory Renewables as they build a bulk biodiesel distribution center in western Kansas. Domestic livestock and aquaculture industries use almost all of the U.S. produced soybean meal, and soybean meal demand is linked closely to those industries. Animal agriculture in Kansas historically uses more than 400 tons of soybean meal per year. With aquaculture now surpassing beef as the world’s number one source of animal protein, and since the world’s oceans and lakes are being depleted of fish and other aquatic species, we have increased our support for aquaculture programs. We work with others to show how soybean meal can be use as “fish” food thereby protecting our water resources and increasing our meal usage. If you enjoy meat, poultry and dairy products, you can thank a Kansas soybean farmer. We are working closely with other organizations to educate Kansans and others about the social and economic importance of animal agriculture in our state and nationwide to help ensure its viability and, as stated earlier, we work with those commodities to help them export their products. Farmers make up fewer than 2 percent of the population, and today’s citizens are further removed from the farm than ever. That has left them with many questions and misconceptions about how the food they eat is raised and what it goes through to get to the dinner table, so we have begun programs to address those concerns. The Kansas Soybean Commission partners with other ag organizations to host influencer tours each year to give them an inside look at how the food they eat is raised. For one tour, we partner with the Kansas Pork Association and take primarily dietitians to Fair Oaks Farms in Indiana to see the entire process of raising pigs from farrow to finish. We also partner with Kansas Farm Bureau to take online influencers (bloggers) to farms across the state, from a niche heritage-hog enterprise to large-scale dairies, to see cattle ranches and everything in between. For our third tour, after they have been to a farm, we partner with both organizations and take those participants on a science-based tour, visiting Elanco Animal Health, Monsanto, and a small meat-processing plant. The overall goal of those tours is to have conversations about food and farming and all that goes into what ends up on their dinner plates. We discuss GMOs, antibiotic and hormone use, pesticides, and more to answer questions and so they can share what they learn with others. The Kansas Soybean Commission and the Kansas Corn Commission partner on a program called CommonGround, which primarily focuses on moms talking to moms about food. The program’s mission is to promote fearless food choices at the grocery store. To do that, it conducts various events throughout the year to answer questions about how food is raised today.