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Professional Proteins fills a niche market
WASHINGTON — The average cost of soybeans in Iowa was $11.70 per bushel in June, according to the USDA’s monthly price report for that period. But Professional Proteins, a processor in Washington, was buying the commodity for around $19.
The heftier price tag was no surprise to the business, though, nor was it unfair.
Professional Proteins is one of about 25 processors in the nation to handle organic soybeans, meaning the product is all non-GMO, and is raised and processed without synthetic pesticides or fertilizers. The value-added product sells at a higher price largely because of all the record-keeping and specialty techniques required to raise them.
“The price of what we call ‘conventional grain’, run-of-the-mill, most of the corn and soybeans grown around here, that’s all kind of determined by the Chicago Board of Trade,” said Operations Manager Beth Bennett. “Organic grains, the prices and the market are not determined by the Chicago Board of Trade or any other trade organization, it is all supply and demand. When there’s too much supply, prices go down. When there’s not enough, prices go up.”
Growers aren’t the only ones who have to follow strict procedures. Professional Proteins’ facility is inspected every year, both to ensure it has the proper paperwork on file for every truck to come through its driveway, and to check for any chemicals on site that would disqualify it for organic labels.
As long as a grain facility passes those inspections, its products can be used to feed livestock and poultry later sold as organic meat. The label is also meaningful to buyers who prioritize certain details in the food production process, namely Amish communities, who Bennett estimated composed about 90% of her clientele.
“I have a whole file of drawers full of people with the last name ‘Miller,’ if that tells you anything,” Bennett said.
The network is mostly local. Bennett said most of her buyers and suppliers operated within 150 miles of the small processing plant on Highway 1, with a few exceptions in other states.
The operations manager said she was motivated largely by the close connections she made in the relatively limited, and often local organic soybean market. But in the long term, she said she was proud of the network’s emphasis on sustainability.
“We’ve got to preserve these farms as a legacy for our future generations,” she said. “If we keep pummeling everything with chemicals year after year after year, we’re just depleting the natural nutrients that are already in the soil. We shouldn’t need to supplement, we just need to nurture it.”
As for financial sustainability, the commodity’s value-add makes for an effective business model. The building — once owned by Triple F before its sale in the ‘90s — is considerably smaller a modern processing site for conventional grains. Organic soybeans offer enough extra revenue to keep the plant in business, without a big enough market to attract competition from major multinational processors.
That’s not to say it’s all smooth sailing.
While the organic soybean market is relatively small, and mostly local, some suppliers do business internationally, and the U.S. imports more of the product than it exports. As in conventional commodity ag, world events on the other side of an ocean can influence prices stateside as businesses seek to fill a need wherever they can find it.
When COVID-19 disrupted global supply chains in 2020, for instance, the organic market went haywire, even more so than other ag sectors. Bennett heard rumors of one area farmer selling organic soybeans at $50 a bushel, quite successfully thanks to unmet demand. And competition with other suppliers in less regulated nations has sometimes caused tension: Professional Proteins joined a number of other U.S. processors several years ago to file a trade suit against the government of India, eventually leading to a federal anti-dumping order against the nation in 2022 after producers said it had flooded global markets with organic soybeans priced cheaper than the cost of production.
“The market, like anything in agriculture, can get weird,” Bennett said. “A couple seasons ago, we were paying $35 a bushel for soybeans. Now, the beans are worth $19. So there can be wild swings in this market, and it’s hard to plan ahead from year to year.”
Comments: Kalen.McCain@southeastiowaunion.com
