What is one of the most effective ways to support Missouri soybean farmers? Increasing demand. Though there are many methods, the Missouri Soybean Association (MSA), led by its board of farmer-leaders across the state, is prioritizing legislative efforts to support soybean demand in its recently updated strategic plan.
“The board of directors understands the need to use policy as a way to drive demand for the soybean crop,” says Casey Wasser, Missouri Soybeans interim CEO. “The global marketplace has changed drastically over the past eight years. South America overtook the U.S. as the global leader in soybean exports, and their production continues to expand at record pace.”
As U.S. soy loses market share with its No. 1 customer, China, MSA’s involvement with policy aiming to negotiate trade deals that create demand for soy will continually increase. The focus is not only on creating additional domestic demand in the U.S., but specifically in Missouri, Wasser says.
Though there are additional opportunities to advocate for Missouri-specific demand, MSA has already made progress, specifically around biodiesel. “Missouri is home to 250 million gallons of soy-based biodiesel production,” Wasser says. “This demand provides a benefit to Missouri soybean producers and adds value to our members’ crop. It’s critically important to sustain and grow the Missouri biodiesel industry.”
MSA has helped pass legislation at the state level to provide biodiesel producers with a tax credit of $0.02 per gallon. This has helped drive profitability, which improves their ability to procure the soybean oil needed to make biodiesel.
The Association has also helped pass legislation that gives a tax credit to fuel retailers for blending biodiesel. Retailers get $0.02 per gallon of fuels sold blended with no less than 5% biodiesel and no more than 10% biodiesel. If the fuel retailer sells biodiesel blends in excess of 10%, they receive a tax credit of $0.05 per gallon.
Continued efforts include fighting for renewable volume obligations under the Renewable Fuel Standard to drive demand for domestic, soy-based biodiesel and working with Congress to improve the Clean Fuel Production Tax Credit so that soybean oil feedstock for biodiesel and renewable diesel production receives a fair and equitable tax credit. Currently, soybean oil is unnecessarily disadvantaged compared to waste feedstocks such as used cooking oil and tallow.
Increased efforts outlined in MSA’s new strategic plan focus on the power of partnerships and collaboration.
“The board would like to see a collective effort with soybean growers, livestock producers, elevators, soybean crushers and livestock processors to identify the current hurdles for expansion in Missouri,” Wasser says. “Through this process, we can begin to better understand the entire value chain and what policy efforts can be undertaken to improve the demand for soy.”
An area of great interest is soybean meal. With more domestic crush capacity being announced, meal consumption presents an opportunity of increased demand for Missouri soy.
“We will be working with our livestock industry to better understand the struggles they face for expansion,” Wasser says. “MSA believes knocking down barriers for new facilities and expansion of existing facilities is critical for improved profitability for Missouri soybean farmers.”
MSA’s new strategic plan also outlines a focus on tax measures specifically. Tax is where demand and profitability intersect, Wasser explains.
“Demand certainly creates value, but tying that directly back to your farm is difficult,” he says. “We know moving the entire pile has benefits, but it becomes hard for one farmer to see that on the balance sheet.”
The association board has its sights set on protecting key tax provisions set to expire this year in Congress. Whether that be the estate tax or the section 199A deduction, a 20% pass-through deduction for farmers operating as sole proprietors, partnerships or S-corporations, these provisions play a direct role in profitability.
Beginning farmers play a key role in this discussion.
“We have continued to advocate for tax policy that gives an incentive for a selling farmer to sell their land to a beginning farmer,” Wasser says. “Additionally, a landowner can receive a deduction of up to $20,000 for leasing their land to a beginning farmer.”
To learn more about MSA and its new strategic plan, visit mosoy.org.
