Quick Look: Missouri Soybean Merchandising Council and the Soybean Checkoff
The Missouri Soybean Merchandising Council works to improve the bottom line for soybean farmers and support innovation across the soybean value chain. Success is most directly measured by return on investment.
A 520 percent return on investment is the type of number that makes a skeptic of many. But, if possible to be clearly explained, could make even the most cautious bankers’ hearts soar. Soybean farmers have that return – a $5.20 return on every dollar invested in the soybean checkoff, coming back to growers in the form of higher prices for their soybeans than if they were without the research, promotion and market development efforts made possible through that one-half of one percent.
The soybean checkoff amounts to just one-half of one percent of the net sale prices of soybeans at the time of first purchase. Of the funds collected, half stay within the state and half are directed to national programs. Those funds must be invested toward improving the overall profitability for soybean farmers. Funds may be used for research, promotion and education efforts; soybean checkoff dollars may not be used for lobbying, membership or similar efforts and are watched closely by the USDA to ensure compliance with the Soybean Promotion, Research and Consumer Information Act and the USDA Soybean Promotion and Research Order.
In Missouri, the Missouri Soybean Merchandising Council oversees those state checkoff funds. The Council is comprised of a board of thirteen farmers elected by their peers. Board members represent seven districts across Missouri and are elected to three-year terms. That board of directors of takes the charge to invest farmers’ checkoff dollars very seriously and works throughout the year to make decisions that most positively impact farmers’ bottom line in both the near and distant future. The board is currently led by chairman John Kelley of Faucett, vice-chairman Harold Gloe of Hermann, and secretary/treasurer Robert Alpers of Prairie Home.
Investing checkoff dollars wisely to ensure growers continue to benefit from such a strong return on their checkoff investment is key to long-term success, and the farmer leaders of the Missouri Soybean Merchandising Council are looking at the long view.
Through their checkoff, Missouri soybean farmers have invested $37 million into research and breeding programs in the state since 1983, leading to more than 100 new patents or soybean varieties. A recent soybean breeding partnership between MSMC and the University of Missouri is providing farmers with seven new soybean varieties for 2017. Another partnership between the Missouri Soybean Merchandising Council, University of Missouri, USDA and United Soybean Board recently received a patent for a method to produce soybeans with high oleic acid content, which will make non-transgenic high oleic soybean available for production. Between those new varieties – without technology fees – and the opportunity for added value from the non-transgenic high oleic trait, growers stand to see clear benefits to their bottom line well into the future.
Investments made years ago are paying off now too. The soybean checkoff, mainly through the work of the Missouri Soybean Merchandising Council, was the main driver in establishing the biodiesel industry in the early 1990s. Biodiesel helps increase demand for soybean oil and other feedstocks, which consequently raised soybean prices by 63 to 74 cents per bushel from 2006 to 2015. A more recent economic analysis pinned the number at 15 percent of the price of soybeans being supported by biodiesel – so $1.50 of a $10 bushel. As the second largest producer in the nation, Missouri produces nearly 200 million gallons of biodiesel annually, with one and a half gallons of biodiesel able to be produced from the soybean oil of one bushel of beans.
Growing demand for soybeans is another area where the soybean checkoff makes a significant difference on the bottom line for farmers. Through partnerships with the US Soybean Export Council, World Initiative for Soy in Human Health and other checkoff-supported initiatives, staff and farmer leaders are working to ensure existing markets remain open to U.S. soy exports, and exploring new export market opportunities. In Missouri, roughly every other row of soybeans is exported. Across the US, that number climbs higher with soybean exports accounting for nearly 60 percent of US soy demand. It would be tough to understate the impact losing such demand and markets could have on domestic soybean prices.
During the 2016 fiscal year, which ran July 1, 2015 through June 30, 2016, the Missouri Soybean Merchandising Council invested in both ongoing and new programs with the goal of increasing the profitability of Missouri soybean growers. Each year, those investments, as well as the Missouri Soybean Merchandising Council’s internal management of checkoff funds, are audited by an outside, accredited accounting firm.
Look for the Missouri Soybean Merchandising Council’s annual statement of activities in the February 2017 issue of Missouri Soybean Farmer magazine.