All market indicators point toward a significant increase in corn acreage in 2007, a result of the rapid growth of the corn market’s ethanol sector. Estimates from market analysts are that U.S. farmers will need to grow about 9 million to 12 million more acres of corn to meet increasing demand. The main source of the additional corn acreage is expected to come from soybean acres. (The rest could come from cotton, sorghum and spring wheat.)

However, before growers make the decision to plant acres and acres of continuous corn, they should consider that soybean demand is expected to increase next year too. Though the increase in soybean demand will not be as great as in corn, market opportunities certainly exist.

“The 2007 outlook for soybeans is very good,” says Eric Niemann, chairman of the United Soybean Board (USB) and a Kansas grower. “We have a very good supply of soybeans, some 500 million bushels carryover. As we think about losing acres to corn, soybean farmers can be reassured we’re going to have plenty of soybeans and they are still going to be a good value.”

Andrew Cottrell, Northern Field Crops Manager for Syngenta, agrees. “The future for soybean pricing looks very good because demand is healthy in U.S. markets … demand for soybean feed, meal and oil,“ he says. “There are a number of varieties coming on the market now which can go into foods, which are much healthier than the traditional varieties, as they result in foods with lower trans fat content. Then there’s global demand, particularly from China as it moves from a vegetable-based diet to a meat-based diet. Soybean meal is the main feed source for its livestock. And that demand could result in a very healthy price.”

Spring Planting is Key

Agricultural marketing expert Bob Utterback of Utterback Marketing Services, Inc., says, the predominant issue will be how many soybean acres are planted this spring.

“Spring planting is going to have a dramatic impact,” he says. “Do we have a great spring planting season and plant corn acres, or do we have a wet spring and plant more bean acres?”

Meanwhile, South American countries are going to increase bean acreage, according to Utterback, “and their ability to increase acres is significant. You can’t get too bullish on beans because of South America’s ability to replace what we lose here. Planted acreage and weather (a mild winter increasing the threat of Asian Rust) are the two big factors that are going to influence soybeans.”

Utterback cautions that there is “some price variability” due to the domestic soybean inventory, up 26 percent from last year according to the USDA. But, he says, “the opportunity for soybeans is going to become very significant.”

100-bushel Soybeans?

Bottom line: soybean acres are expected to decrease; soybean demand is expected to increase. So, what are the opportunities for soybean growers going forward?

Andrew Cottrell of Syngenta believes the No. 1 opportunity is to increase the yield potential of the soybean crop. “We know that in the bag you have a potential of 100 bushels per acre. Average soybean yield in the U.S. now is 40 bushels. So, there’s a clear gap in yield potential. With new seed traits, seed treatment technologies and crop protection materials, there’s a potential to drive that yield forward, closer to the biological potential of 100 bushels per acre.”

Looking at the markets, the experts see biodiesel is a great market opportunity. “USDA estimates biodiesel production reached 250 million gallons in 2006, a 173-percent increase from 2005,” reported Keith Collins, USDA chief economist, to the U.S. Senate agriculture committee in January. “For the 2005/06 crop year biodiesel production accounted for 8 percent of soybean oil use; for 2006/07, biodiesel is expected to account for 2.6 billion pounds of soybean oil or 13 percent of total domestic soybean use.” The 2.6 billion pounds equals the oil extracted from 229 million bushels of soybeans, he said.

Further, there’s room for this market to expand. According to Collins, biodiesel could account for 20 percent of U.S. soybean oil production for the 2007/08 crop year.

The export markets also provide a key opportunity for soybean growers.

“Forty-seven percent of soybeans produced in this country are exported,” the USB’s Niemann explains. In 2006, that total was more than 1.2 billion bushels of soybean and soybean meal. “China is the biggest importer of U.S. soybeans. Mexico is the largest importer of meal. It’s crucial we maintain our supply. We’re going into this season with a very good carryover, but weather-related problems could cut that short very quickly,” says Niemann.

21-Cent Premium Per Bushel

Syngenta is also providing additional incentives for growers to increase their soybean profitability by offering soybean growers an incentive to plant NK® Brand Roundup Ready® soybeans in 2007.

Here’s how it works: Growers who have not planted NK Brand Roundup Ready soybeans previously, or current NK Brand soybean customers who increase their order by at least 200 units over last year, are eligible for the Syngenta AgriEdge® Grain Premium Program. Growers who place their orders for NK Brand Roundup Ready soybeans with Garst®, Golden Harvest® or NK Brand seed dealers are eligible for premiums of up to 21 cents per bushel on their first 60 bushels per acre on each qualifying soybean order. On a 60-bushels-per-acre soybean yield, the premium could total $12.60 per acre.

The 21-cent premium includes incentive payments for use of CruiserMaxx Beans™ seed treatment, and qualifying Syngenta Crop Protection, Inc. insecticides, herbicides and fungicides to optimize the genetic potential of the soybeans. Syngenta has extended the deadline for enrollment into and purchase of soybean orders that qualify for its 2007 AgriEdge Soybean Grain Premium Program until March 1, 2007.

“Syngenta’s AgriEdge program is really a new way for growers to think about growing soybeans,” says Jon Scharingson, agribusiness marketing manager. “Growers have historically been frustrated with their soybean yields. The AgriEdge approach is a way to for growers to break through that yield barrier in soybeans. Growers are looking for effective ways to more effectively manage their soybeans -- more like they grow their corn -- to help them increase their profitability per acre of soybeans and the profitability on their farms.”

So, to take advantage of the market opportunities, Niemann suggests that with their yields protected by crop insurance, growers have the opportunity of higher prices to make plans for marketing their soybeans this year. Now is an excellent time for soybean growers to take advantage of higher prices going into this spring, he says.

“In good times, it’s important to make the right seed selection, keep fertility levels up, manage the pests effectively. If growers do everything right, and get the right weather, it should be a very good crop. With the increased prices and a good crop, 2007 should be a very good year for the soybean farmer.”

Prepared by Gibbs & Soell for Syngenta

NK®, AgriEdge® and CruiserMaxx Beans™ are trademarks of a Syngenta Group Company.
Garst® is a registered trademark of Garst Seed Company.
Golden Harvest® is a registered trademark of Golden Harvest Seeds, Inc.
Roundup Ready® is a registered trademark of Monsanto Company.