World demand for food-grade grains is increasing. Growers who can provide products that meet the varied standards for "organic" or "identity preserved" foods can receive price premiums when they sell their crop. In addition, many shoppers world-wide are adding more soy products to their diets. In Rock County, Wisconsin, a grain elevator and buyer recognized these trends as an opportunity to develop a source of food-grade soybeans to meet changing market demands.

Response:

The local Extension agent and a campus-based soybean specialist worked with the Rock County Grain Company to assess the production and markets needs. They planted trial plots to compare performance, yield and suitability for food-grade production. They gathered information about requirements for "identity preserved" products and taught prospective growers about production and storage techniques. They helped the grain company develop a premium program. Finally, the Extension agent provided "third party verification" to meet the "identity preserved" requirements.

Outcome:

• In 1997 and 1998, food-grade soybean producers in the area earned 2.5 million dollars in additional income from premiums. Premiums range from 35 cents to $15 a bushel. On average, the premium is $2.85 per bushel or about $30,000 per grower.
• In 1996, the first year of production, area producers of the "identity preserved" soybeans received premiums of $974,000. Based on market growth, the grain company predicts growers and handlers will earn $8 million in premiums by 2004.
• The grain company received a two-year agriculture diversification grant of $49,970.
• The company created five new jobs to clean and process "identity preserved" soybeans.
• The company expanded markets to Japan, Germany, Italy and Asia. Despite the economic crisis in Asia in 1998, market share was steady because demand for the product increased in domestic markets.

Dennis Nehring, Rock County Agricultural Agent
dennis.nehring@ces.uwex.edu (608) 757-5696;  608-757-5586 (fax)

March 1999
 

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