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Our Industry: Grains - Soybeans
SOYBEANS
What It Is,
How They're Marketed
and How They're Used
Soybeans are the most economically important bean in the world.
It is native to eastern Asia. Soybeans were grown as long as 2800 B.C. in China, where they were considered one of five sacred grains. By the 17th century, soybeans were being planted in Europe.
The production of soybeans in the United States is a fairly recent event. Although introduced to America around 1800, soybeans largely were ignored until the 1920s, when a U.S. Department of Agriculture scientist traveled to China and sent many soybean specimens back. That led geneticists to breed several varieties that flourished in the United States.
Today, the United States is the world leader in soybean production, growing about 2 billion bushels annually -- more than 50 percent of the world crop. Other major soybean-producing nations are Brazil, Argentina and China.
The Many Varieties of Soybeans
Of the more than 150 varieties of soybeans grown in the United States, the yellow soybean is the dominant class used in commercial markets. Other minor classes include: green, brown and black.
The Soybean Plant -- Stages of Life
The main U.S. soybean production areas coincide with the central and southern sections of the Corn Belt. Soybeans do best in fertile or sandy loam soil.
Planting: In the
main production areas, soybeans are planted once corn planting is done,
usually in May.
Growing:
The seed germinates and the plant emerges in about two weeks. The rate
of growth of the soybean plant depends on the amount of sunlight per day
and temperatures. The soybean is a legume. And like other beans, the plant
is capable of extracting nitrogen from the air to assist in its own growth.
Its deep root system makes soybeans resistant to drought. Eventually,
the plant reaches three to five feet in height. Each plant produces 60
to 80 pods, each of which usually contains two to four soybeans.
Harvesting:
By late August or early September, the lush green color of the soybean
plant turns yellow, the soybeans begin to dry and the leaves begin to
drop away from the pods. When the leaves have fallen and the moisture
of the soybeans has dried to less than 15 percent, grain combines harvest
the crop.
Soybeans -- Their Journey to Market
Of U.S. soybeans utilized each year:
- about 62 percent is processed for domestic use as oil and meal.
- about 33 percent is exported. Most U.S. soybean exports are shipped as raw beans that are processed abroad for oil and meal. Most U.S. soybean exports are used in livestock feed to meet the increasing demand from consumers in Japan, Europe and parts of Asia for more meat in their diets.
- about 5 percent is used as seed, feed and for residual products.
- the remainder is stored for future use.
Most of the soybeans grown by farmers is sold to a nearby country elevator. Some farmers may sell directly to a soybean processor located in the growing area.
The country elevator serves a vital role. It is where producers obtain the farm supplies -- such as seed, fertilizer and chemicals -- needed to grow the crop. The country elevator dries, stores and conditions the grain. Because of their high oil content, soybeans must be stored with special care. At moisture levels below 13 percent, the soybeans can split, reducing their market value.
The country elevator then usually sells the soybeans to a terminal
elevator or flour miller. Terminal elevators -- large grain-handling
facilities located in such major marketing areas -- store and condition the
soybeans before selling and shipping them to a soybean processor or export
elevator, which in turn sells the commodity to an overseas customer.
When entering into a contract, the buyer and seller agree on the price, quantity and quality of grain involved; and the price discounts or premiums that will apply if the actual grain shipped has a higher or lower quality than requested. The buyer and seller also decide how the soybeans are to be shipped (barge, rail or truck) and the shipment period.
As soybeans are traded in the marketing system, whoever owns them faces market risk as prices rise and fall to reflect supply and demand. For this reason, soybeans often are "hedged" in the futures market. In "hedging," a person buys or sells an equivalent quantity of grain at a future month at a set price. That protects against unexpected price changes that can trim an already small profit margin.
Soybeans -- How They're Transformed into Useful Products
Soybeans are a versatile crop with many uses.
But before they can be used in food, feed or industrial products, soybeans must be processed. More than 95 percent of the soybeans processed in the United States are "crushed" by solvent-extraction plants.
When arriving at the processing plant, the soybeans are checked for quality. The soybeans then are processed to extract the oil and meal. From 100 pounds of soybeans, the soybean-crushing process produces 18 pounds of soybean oil and 80 pounds of soybean meal.
There are several steps in the soybean-crushing process:
Dehulling: First,
the soybeans are cracked and the hull is removed.
Soaking: The
soybeans then are flaked in special machines and moved to towers or tanks where
they are soaked in a chemical solution. This solvent removes about 99 percent
of the pure, crude soybean oil from the flake.
Refining: The
crude soybean oil may be refined further depending on how it is to be used.
In the refining process, crude oil can be degummed, bleached, deodorized or
hydrogenated with hydrogen gas. In "degumming," the fatty acid content
of the oil is neutralized with a caustic acid to produce some products (like
soap). The oil also may be "bleached" by treating it with an absorbent
clay material before it is "deodorized" through a vacuum steam-distillation
process.
Toasting and Grinding:
After the oil is removed, the soybean flake then is cleaned, toasted and ground
to improve its nutritional value. This produces the soybean meal, which
consists of 48 percent protein.
Soybeans -- Their Many Uses
Soybeans are found in hundreds of human foods, animal feeds and industrial products.
Soybean Oil: About 97 percent of soybean oil is used in a wide range of products for human use, such as:
cooking oils
salad dressings
sandwich spreads
margarine
salad oils
coffee creamer
mayonnaise
shortenings chocolate
coatings
a flour ingredient
medicines
Soybean oil also is used in such industrial products as:
printing
inks cosmetics
linoleum vinyl plastics
paints
caulking compounds
pesticides epoxy glue
protective
coatings yeast
soaps,
shampoos and detergents rubber
Soybean Meal: About 98 percent of soybean meal is used as a feed ingredient in mixed rations for poultry, hogs, and beef and dairy cattle. The remainder is used for human food or industrial products. High-protein (48 percent) soybean meal is used as a starter ration and high-performance feed. A lower-protein soybean meal (44 percent) also may be produced by adding the high-fiber hulls for use in bulky feeds, or as a carrier for molasses and other ingredients.