Specialty-oil soys stalled

Processor and consumer acceptance are hitches for now

BY TOM BUTTON

Amazing things are happening in greenhouses and test plots. Breeders have created new "lo-sat" soybean varieties that produce margarines that match canola health assertions claim for claim.

Other varieties will let chocolate makers, for instance, keep their snack bars on the shelf a couple of months longer, or let fast food outlets cook thousands more French fries before draining their fryers.

American soybean growers are already growing these varieties and are on target to grow three to five million acres of specialty-oil soybeans within five years.

But don't expect value-added, identity preserved (IP) contracts to be the saving grace for Ontario's family farms. The outlook for specialty-oil contracts in the short-term is bleak, and when they do arrive they won't pay the mega-bucks growers have hoped for.

In the U.S., Pioneer Hi-Bred and its joint venture partner Optimum Quality Grains are leading the specialty-oil foray. Jim Atkinson, specialty-oil manager for Pioneer, won't reveal contracted acreage, but says it's still small - only part of the U.S.'s 750,000 acres of IP soys, ranging from specialty oil to natto.

Pioneer is paying premiums ranging from US40 cents per bushel to US$1.25, Atkinson says. Higher premiums reflect lower yields on some first-generation specialty oil varieties.

Atkinson foresees downward pressure on those premiums. Breeders, he notes, are already producing specialty-oil varieties that nearly equal top commercial types for yield and agronomics. New specialty-oil varieties will even carry the Roundup Ready gene.

That leaves Pioneer calculating the bonus it will need to pay. Atkinson expects premiums will range from US$15 to $20 per acre, mainly to compensate the grower for the extra effort to keep the crop segregated. "We don't see specialty soybeans bringing the grower $50 or $100 per acre," Atkinson says.

Added pressure comes from the food industry. Atkinson explains that when Pioneer offers a premium, it's on a 60-pound bushel. The added-value special trait, however, is limited to the oil - about 11 pounds per bushel. The other 49 pounds has to be sold for meal at regular commodity prices.

Bob Kennedy, director for Optimum Quality Grains, formed 18 months ago as a joint venture between Pioneer and DuPont, says growers must be patient. "The expectations are always a little too high," Kennedy says.

Kennedy believes there's a solid future for specialty-oil soybeans, but it's going to take time and persistence to tap into it. To date, success has been measured more in terms of getting food manufacturers to test the new oils rather than actual sales. But Optimum is making inroads, Kennedy reports. The 200-store Hy-Vee grocery chain in Iowa is selling a private label lo-sat soy oil. Kansas City-based AWG is promoting a new lo-sat bottled oil for the 800 stores it supplies. Mrs. Clark's brand lo-sat salad dressing and mayonnaise have hit the shelves. And Optimum is selling to the U.S. Department of Agriculture school lunch program.

The best news for Optimum would be a decision by Washington to force food makers to specify their trans-fatty acid content on product labels. Trans-fatty acids are formed during hydrogenation, and are thought by many experts to be as bad for the heart as lard.

University of Guelph food researcher Bruce Holub says trans fats are as harmful to the body as smoking cigarettes. Worse, he says, consumers get trans fats when they switch to products made with vegetable oils, which they think are safer than animal fats.

If the U.S. Food and Drug Administration requires labelling of trans fats, the specialty-oil market will take off, Kennedy says. Until then, sales may be confined to consumers who are very health literate and who are concerned about trans- and saturated fats.

While other specialty oils have the potential to make food processors more efficient, that's also a tough sale. Vegetable oil markets are cutthroat, with buyers nervously watching each tenth of a penny per pound, Kennedy reports. In that environment, premium-priced oils face an uphill challenge, even if it can be shown they make long-term economic sense.

Food makers also want the freedom to substitute among vegetable oils and suppliers depending on which is cheapest at the moment. And while some oils may extend shelf life, food makers are leery of sending the message that might be interpreted as saying their current line-ups are rotting on shelves.

"The advantage we have is that the U.S. has lived with soybean oil for 50 years," Kennedy says. "They may rather switch to a specialty variety than switch, for instance, to canola."

While market development is underway in the U.S., Canada lags. "A lot of things need to be worked out," says Susan Iler, technology manager for the Ontario soybean board. Consumers need to learn why specialty soy oils may be their best choice, and Iler says there needs to be progress on trans fat labelling.

Behind the scenes, however, processors are eyeing the U.S. experience. "A lot of our industry thinks it will be heading that way," Iler says. "We're working on it...we'd hate to see our soybean industry lose out."

Agronomically, there's no reason for Canada to take a back seat to the U.S. Pioneer's Atkinson, for instance, says the company has specialty-oil contracts in Michigan and has varieties that would grow from Windsor up to London.

Even so, Pioneer isn't testing the varieties in Ontario, Atkinson says. It's focusing on getting the industry launched in the U.S. instead. "I see no reason why we can't move into Ontario," Atkinson says. "We would need to work with someone to ferret out the opportunities."

Gary Ablett, plant breeder at Ridgetown College, has already produced low-linolenic and lo-sat lines that are ready for development into commercial varieties and has signed development agreements with companies, including Thompsons and LimaGrain.

"The results so far are very encouraging," Ablett says, but adds, "This isn't a near-future project."

Meanwhile, the U.S. is making new strides. Atkinson reports Pioneer expects to bring specialty-meal varieties to the market by 2002, including a line that offers high-available phosphorus.

A year or two later, the company hopes to introduce so-called "stacked" varieties that have genes for both specialty oil and specialty meal. "Instead of recovering the premium on 11 pounds, the entire 60 pounds would be value-added," Atkinson says. "That would be a multi-million acre variety."

© copyright 1999 Agricultural Publishing Company Limited.


back

Seed pirates to be scuppered

Seed industry vows aggressive action in clamping down on their stolen bounty

BY TOM BUTTON

They're calling it "seed piracy," and the seed companies say they're going to stop it. Their targets are farmers who buy seed that's protected by plant breeders' rights and grow the crop for cut-price seed to sell to neighbours.

To stop them, the seed industry has set up a new national group called the Canadian Plant Technology Agency, aimed at ending the rip-off of what it says are its members' intellectual property rights.

Companies say they're going to get tough. Instead of settling disputes out of court - as they've done ever since the eight-year-old plant breeders' rights (PBR) law was passed - they're going to demand that judges hand down tough penalties.

On the Prairies, SeCan has hired former cop Ed McCann to pore over newspapers for suspicious ads, to sit in coffee shops chatting about seed supplies, and to track down tips from bona fide dealers.

Despite being eight years old, PBR laws aren't well understood, says Bruce Howison, Winnipeg-based seed exec for Cargill and chairman of the new Canadian Plant Technology Agency. Making matters more difficult, PBR applies only to some varieties.

The list of protected varieties is rapidly growing, however. (See PBR Power, page 35). So far, for instance, companies have protected 24 soybean varieties; another 40 are in the pipeline.

The plant technology agency will work on education, but, says Howison, "Our patience is starting to wane...When [brown bagging] becomes blatant and clearly people are profiting from it, there's one place to settle it. That's in court."

Howison says companies will balk at out-of-court settlements, even though it means higher legal fees. He predicts the first Canadian case will be settled in court within the next six months, followed by a string of others, "not just by Cargill, but by others, too."

So far, 20 companies have joined the agency, including Novartis, Pioneer, W.G. Thompsons, Sask Pool and SeCan. While such companies have a huge share of the Canadian seed market, however, the outlook for Ontario farmers is more chequered.

Soybean growers who want to plant Novartis varieties, for instance, can basically plan on buying from Novartis dealers if they want to buy legal seed. Bruce Hunter, manager of product development, says the company is getting PBR protection for all its soybean varieties.

In past, companies were leery of getting a bad name by pursuing PBR too aggressively. Hunter says those days are gone. PBR legislation protects farmers by letting them grow their own seed, he says. The people that Novartis wants to stop are companies and seed cleaners who, it says, are competing unfairly because they're selling genetics without having paid for the breeding costs.

Meanwhile, Pioneer Hi-Bred isn't protecting any of its soybean varieties, says Tim Welbanks, agronomy manager for the Chatham-based company. Pioneer isn't opposed to the PBR concept, Welbanks says. In fact, the company is protecting many of its canola varieties.

Instead, says Welbanks, the PBR system wouldn't let Pioneer keep pace with farmers' needs. In order to obtain PBR protection, companies must describe minute details of variety appearance, such as pod colour and type of pubescence. Pioneer doesn't record those details during screening trials, but uses the screening trials instead to record yield and agronomics that determine whether the variety may go commercial.

To take advantage of PBR, the company would have to keep the variety off the market for an extra two years in order to plant the trials that could be used for describing the variety appearance, Welbanks says. Alternatively, the company could spend much more on screening trials and record appearance of all experimental lines under test.

Either way, "it doesn't make a lot of sense," Welbanks says. The system works better in canola, he says, because it takes longer to get a canola variety registered and on the market.

None of SeCan's top-selling soybean varieties are protected yet, but manager Larry Whyte says SeCan is seeking PBR on almost all of its new soybean varieties. In part, it's lured by success on the Prairies, where sales of its hot new AC Barrie hard red spring wheat were much higher than expected last year, its second year on the market. "Normally, that's the year when farmers start buying from each other," Whyte says. "We were fairly vigorous in enforcing our rights, and we were pleasantly surprised with our sales results."

Whyte says it isn't a plan to grab more profits for SeCan members. Instead, he says, when SeCan makes a sale, a royalty gets paid to the breeder, typically a government or university department. When brown baggers make the sale, there isn't any royalty back to the breeder.

"Once farmers understand the money is going for research to produce new varieties, they don't object to it," Whyte says. "They don't mind paying as long as everybody does - they want it to be fair."

© copyright 1999 Agricultural Publishing Company Limited.


back

Is lime effective in no-till?

Early research suggests surface liming does reach acceptable depths for pH maintenance

BY TOM BUTTON

Crop production is an acidifying process. In corn, massive nitrogen doses make the soil more acidic. Indeed, all crops reduce the soil's pH by removing calcium and magnesium.

In plowed fields, acidification is a nuisance. Growers watch out for anemic yields and keep an eye on soil test results. When necessary, they buy lime and work it in.

"But what if you can't work it in?" asks Ridgetown College soils specialist Doug Young. "What if you're in no-till? Do you still have to plow it under?"

Looking for the answers, Young embarked on a research project last year with John Gaynor at the federal agriculture department's Harrow Research Station. The work is funded by the fertilizer industry, soil testing labs and Ottawa.

More research is needed, Young says, but the preliminary conclusion is that it's OK for no-tillers to leave their lime on the surface. Rain will carry some of the lime into the soil. "And remember, our no-till really isn't no-till," Young adds. "We do a fair amount of tillage with our planters."

Young does, however, recommend keeping a lookout for pH shifts. It makes sense, he suggests, to separately sample the top couple of inches in pH sensitive areas to see whether pH stratification is taking place. Plus, it's a good idea to test soils a year or two after the lime application to be sure pH is acceptable.

Young chose fields last spring at Woodslee, Thamesville and Melbourne. Soils were acidic and sandy. Clays, he points out, may sometimes need lime, but on the whole have much higher buffering capacity than sands.

Lime was spread just before planting. Young used dolomitic lime at five tonnes per hectare (2.25 tons per acre) at a material cost of $40 per acre. He also tested pelletized lime at the same rate and a cost of $160 per acre, cautioning that dealers would typically advise a lower rate of the faster-acting pelletized lime than dolomitic.

In tillage plots, lime was worked in with a disc. In no-till plots, the lime was left on the surface. Plots were then seeded to soybeans.

At Thamesville, Young started with an overall soil pH of 5.4 and a 6.4 buffer pH. In the disc plots, pH rose to 6.4 in the top inch, 6.3 in the second inch, and 5.7 from two to four inches deep.

In no-till plots, the top inch was 6.7. This higher pH was anticipated, since more of the lime was left on the surface. What was important, Young thinks, is that pH in the second inch was 6.1. And while at the two- to four-inch depth pH climbed only to 5.1, that was slightly higher than before liming. "The message is, the lime is moving down," Young says. "It isn't as fast as if we'd worked it in, but it's still happening."

None of the plots had as much pH correction as Young had expected. He believes that's related primarily to last year's dry weather. Yields were also disappointing on the sandy soils - averaging about 35 bushels - again, he thinks, because of dry weather. Young found no yield differences between the limed no-till and disced plots.

Young wants to continue the research at least one more year, hoping for more typical weather. "All our lime recommendations are based on plowing to a depth of six inches," he points out. "We haven't looked before at what happens to lime when you don't plow."

© copyright 1999 Agricultural Publishing Company Limited.


back