In 1804, a Yankee Clipper brought the first soybeans to this country as ballast. Since then, the bean has slowly risen in status. U.S. farmers started growing it as a crop in 1829, to make soy sauce and a coffee-like beverage.
By the late 1800s, it was used primarily as cattle feed. And while today, a century later, 95% of the soybeans grown in this country are still used for livestock feed, the legume has climbed further up the food chain to encompass a large array of soy foods for human consumption.
For several years, Market To Market has reported on a number of soy ventures by farmers, working to add value to their raw commodity. Producer Nancy Crowfoot has an update on the soy foods industry.
Soybeans are being used to produce, among other things: flour, snack foods, baby food, cheese-like slices, soymilk, tofu, and meat substitutes.
Of the more than 360 companies that make soy foods or soy ingredients ... Market to Market has reported on a few founded by farmers.
Dan Van Steenhuyse, President, Iowa soy Specialties, Vinton, IA: April 1999. "No one's making a low fat naturally processed soy flour."
The Vinton, Iowa company also makes textured soy
protein that can be used as a meat substitute.
Tom Lacina, Midwest Harvest: Feb. 2000 "Tofu seemed to be the right size of a business that can be done on a family level."
Paul Lee, Super Soynuts, March 2000: "We got to thinking, well why can't we start roasting these things like a peanut?"
The farmers-slash-food producers were looking for ways to increase their bottom line. And from the outside -- it looks very profitable.
Scott Lee, Lee Seed Co. "We'll get comments at shows that, '$4.00 a pound, that's $240 a bushel."
While $240 a bushel sounds "rich, " it does not come without risk … the investment can reach hundreds of thousands of dollars in equipment … marketing and promotion ….and the initial research and development of a product.
Tom Lacina, Midwest Harvest, Grinnell, Iowa: "We looked at about, well, 12 different soybeans in the process of deciding what soybean we were going to use in our, in our, in our tofu. And we actually did some taste tests."
With the commitment of time and money … the value- added business is an investment that has farmers "betting their beans" that soy foods are not just a short-lived fad.
And their bet is a good one, according to soy foods industry analysts.
Nancy Chapman, Executive Director, Soyfoods Association of North America: "Soy foods growth has just been phenomenal. It started probably about five years ago with increased recognition from the populace. We've seen about a 20 to 25% growth. Products that are most familiar, which are enjoying the most amount of growth really are the tofus, the soymilk, and all of the meat alternatives."
A survey published by the United Soybean Board showed in the year 2000, 27 percent of those surveyed ate soy products once a week.
Another United Soybean Board survey said, since the inception of the federal government's 1999 health claim for soy, 35% of consumers are aware that:
"25 grams of soy protein a day, as part of a diet low in saturated fat and cholesterol, may reduce the risk of heart disease."
Some farmer-processors credit the health claim for increased sales.
Scott Lee, Super Soynuts: "In '99 we roasted about 300,000 pounds of soybeans, about 5,000 bushels. We would gauge our growth over each of the last 3-4 years at easily 35%, easily 30 to 35%. So it's all the nutrition information that has flooded the market in the last few years has of course helped us."
The flood of nutrition information has helped more than just food processors.
Dennis Abbas, Hampton, IA farmer, Oct. 1997: "I presently am growing organic crops strictly to improve my bottom line. I don't have that many acres of crops. I found a high value crop is very important in improving any profit."
Farmers can also cash-in on the soy foods trend without creating a consumer product. When Market To Market first interviewed Dennis Abbas in 1997, he was earning $17.60 a bushel for his organic soybeans. The beans were sold to a company exporting them to Japan for the tofu market.
Today, Abbas says the price of organic beans has fallen to about $12.50 a bushel … but still a good enough price for him to this year, double his organic acreage from 30 acres to 60.
Soybeans don't have to be organic to bring a higher price. The premium price for identity preserved non-genetically modified soybeans is generally within a dollar of the commodity market price.
The drive for the identity preserved soybean market is the same today as it was three and a half years ago when we interviewed farmer, and soy flour processor, Paul Lange.
Paul Lang, Natural Products, 1997 " For companies like us the more RoundUp ready beans sold, the stronger our company is because some people just don't want RoundUp Ready soybeans."
It is a consumer driven market – one that may still be a small niche in both the commodity world … and in the supermarket -- but one that according to industry analysts will have a steady growth in the future for processors and for the farmers planting food-grade soybeans.
Nancy chapman, Exec. Dir. Soyfoods Assoc. of North America: "Its not going to be a huge growth overall to the farmer acreage. But its still the potential area that we 2 million was about '97, we're now at 5 million and at a 25% growth you probably see that moving up pretty steadily."
For Market To Market, I'm Nancy Crowfoot.