IOWA SOYBEAN SUPPLEMENT -- 1998

Contacts:
Larry Johnson, Center for Crop Utilization Research, (515) 294-4365
Susan Thompson, Agriculture Information, (515) 294-0705

ADDING VALUE TO SOYBEANS IN LOCAL COMMUNITIES

AMES -- The nation's soybean crushing industry is becoming less centralized, which is creating opportunities for small companies in local communities. A new research project to identify and evaluate these new opportunities is underway.

The two-year Iowa State University project, funded by the Iowa Soybean Promotion Board, will begin with a survey. "We want to learn what types and quality of soybean oil and meal are being produced currently in Iowa mills," says Larry Johnson, professor-in-charge at ISU's Center for Crops Utilization Research.

Johnson hopes to collect oil and meal samples from up to 30 crushing plants by the end of 1998. Most will be from "mini mills" although Johnson says some will come from the bigger players in the soybean crushing industry. Researchers will use the survey information to identify niche markets where small companies might thrive.

"The goal of the project is to fully characterize oils and meals produced by the new mini mills and to develop low-cost techniques for these mills to add value to oil and meal," Johnson says.

Traditional soybean plants use a hexane solvent to process beans. This method requires high capital investments, large quantities of seed and high energy demands. Mini mills use a newly developed extrusion-expelling technology that is less expensive and works well on a smaller scale.

Johnson thinks mini mills have the best chance to compete with large companies by taking an "identity-preserved" bean and providing an end product with special characteristics. For instance, the health food industry and Asian markets want products from soybeans that have not been genetically altered.

Beans that have been genetically altered also offer new opportunities, Johnson says. "There are modified beans with specific characteristics that an end user will want to preserve. Big companies often don't want to get involved because of the handling costs, but a local plant could fill this niche," he says.

For instance, oil from high oleic soybeans has some of the same characteristics as olive oil and might be a good candidate for production at a mini mill. Some meal that historically has gone into high-energy dairy cattle rations could take the place of texturized vegetable protein now used in some foods.

"In other words, we're trying to find food applications that would garner food prices instead of feed prices," Johnson says.

The bottom line is finding soy-based products that will be good matches for mini mills. "We'll be targeting things with high value that can be produced with low capital and less technology, for which customers will be willing to pay a higher price," Johnson says.

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