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Mike Howell (00:08):
The Dirt with me, Mike Howell, an eKonomics podKast where I present the down-and-dirty agronomic science to help grow crops and bottom lines. Inspired by eKonomics.com, farming’s go-to informational resource, I’m here to break down the latest crop nutrition research, news, and issues, helping farmers make better business decisions through actionable insights. Let’s dig in.
(00:32):
Well, hello again everyone. Welcome back to The Dirt. We’re back in the studio here in Fargo, trying to wrap up another episode of The Dirt for you. We’ve got Mr. Bob Sinner with SB&B with us. Bob, if you will, tell us a little bit about yourself and a little bit about your company.
Bob Sinner (00:53):
Well thanks, Mike. It’s good to be here. I’m actually from Eastern North Dakota. I’m a fourth-generation partner in a family business that started in 1906. In the late eighties, my partners and I made a decision to see what we could do about working directly with food companies internationally, and so since 1989, not only have we been producing, but we have been processing and exporting food quality non-GMO soybeans to customers globally.
Mike Howell (01:22):
Okay. Now, is this the soybeans that we eat when I go to a Chinese restaurant or something like that? I think they call it Edamame. Is that the same thing?
Bob Sinner (01:29):
A little bit different, Mike. The Edamame beans are a little bit bigger. They’re harvested on the green side. What we’re doing is harvesting a full mature bean. It might be a bean that’s grown for tofu, or soy milk, or natto, or miso, cleaning it to customer specs, packaging it, and shipping it overseas.
Mike Howell (01:47):
Okay, so you said shipping it overseas. Is everything exported or is there a market here in the United States? What are you doing with the products?
Bob Sinner (01:55):
Good question. About 80% of our business is international, 20% is domestic. Soy food demand has continued to grow in the United States, particularly on the soy milk side. It’s usually mostly, I think on the coast side where the higher populations are maybe some more animal populations, but there has been a slight increase in demand in the United States.
Mike Howell (02:16):
I know a good bit about soybeans. I’ve been around soybeans all my life, and we talk about them regularly here on The Dirt, but let’s talk a little bit about some of the differences between the products that you’re producing and the soybeans that a typical farmer may be producing, would agronomically, or growing the crop, is there any difference?
Bob Sinner (02:34):
Agronomically, no. There’s historically, I think, been a little bit of a yield drag. We’ve been able to research, improve that significantly. So when you talk about agronomic, well, do you use different herbicides, obviously this is not a biotech, so you’re using conventional herbicides with pre-plant post-plant, or pre-emergent, and then of course post-emergent. So agronomically is to use the same fertilizers, the same types of tillage, harvested the same, but you develop these characteristics in varieties that have unique characteristics for the food industry, whether it’s high protein or high sugars or different things that the food industry is looking for.
Mike Howell (03:15):
I was going to ask about those characteristics. What exactly are they looking for and what are these beans used for more specifically? We kind of touched on that, but elaborate on that a little more if you will.
Bob Sinner (03:25):
Okay. So I think it’s fair to say that the soy food industry globally is driven by soy milk. When you see the demand, you get a mature market like Japan for example, soy milk demand is still going up. You get all of the growth around the world, even the United States in the growth in soy foods, it’s soy milk, but there’s a lot of staple markets, or I’d say high consumption markets of food soy that started with tofu. The Southeast Asia markets, it’s a low-cost, high-protein plant-based protein source for people. And so those are the two big ones soy milk and tofu. Tofu generally likes a higher protein. So when you look at proteins on a general level, north to south in the United States, proteins are generally lower in the north, and so if you’re going to produce high-quality food grade high protein soybeans in the north, you’ve got to develop that through breeding.
(04:21):
Then you kind of translate, move over to the soy milk side. You’ve got a little bit lower protein levels, maybe a better balance of sugars. You look at lower lipoxygenase to reduce the beanie flavours, things like that. And then you start thinking about some of the other soy foods. And by the way, there’s about 25 different ones. Probably the most exciting one that’s really taking off is natto. Traditionally in Japan, big consumption, consumption was increasing significantly through the pandemic, more stabilized right now, but continuing to grow. But more importantly, the Japan natto manufacturers are seeing interest from outside the country. They’re exporting natto to the United States. They’re exporting natto to Korea, to Taiwan, and even China.
Mike Howell (05:05):
You mentioned the soy milk, and I had never really thought that much about it until my first son was born. He was allergic to milk, and that was one of the things that we had to try to get him something so he could survive, was the soy milk, and he actually did really well on that. He’s a lot bigger than I am now, so he got off to a good start with the soy milk.
Bob Sinner (05:23):
You know something, Mike, in relation to that, it’s interesting how you see different cultures do different things to the soy milk to make it more drinkable. The most common is to flavour it, add a little sugar, take that beanie kick out of it, but then you go into countries like Taiwan or China, they like that beanie taste. They don’t like to flavour it. They like that beanie flavour, beanie taste. But in the same sense, you’ve got our millennials in this country that like to try things new, particularly if it’s healthy, and that’s the unique thing about soy. The isoflavones really give that soy product a really strong healthy attribute.
Mike Howell (06:02):
Bob, you mentioned that agronomically, everything’s about the same as far as growing this crop versus a regular soybean crop, but I’m assuming when you harvest this crop, you can’t just take it to the elevator and get it mixed in with everything else. Talk about processing and what we do with the crop after you get it harvested.
Bob Sinner (06:18):
Well, before we get to harvest, let me just mention weed control.
Mike Howell (06:21):
Okay.
Bob Sinner (06:21):
Weed control is important and we’re always looking at new ideas, new chemistries and new technologies, new innovations, robotic weeders, all these things that are going to be advantageous to not only the non-GMO production but to world production in itself. And so we control is important. If you ask me what the biggest challenge was for producers, it’s weed control. We’ve learned a lot. We’re farmers yourself. We have agonists on staff. We help farmers through that when they’re transitioning from a biotech to a non-GMO. And so that can be an easy transition once you understand what you need to do, but then you’d babysit this crop all year long and you get to harvest.
(06:58):
The one thing that’s important at harvest is to make sure that we’ve got either a killing frost or that the beans are dried down because if there’s moisture in the plants, soybean plants, or if there’s moisture and weeds that are in the field, guess what, it can stain the beans. Those beans are running the cutter bar on the ground and they can pick up a little dirt and that dust can stain the beans, which is a big concern for tofu manufacturers. If the crop is dried down and that’s the benefit of soybeans, you don’t have to naturally or mechanically dry the beans. They’ll dry it down naturally in the field, and so they’ll harvest it. We help producers with their machines. We don’t want seed coat cracks. It’s just a little bit more gentle, but they harvest just like any other soybean, and then they’re storing it and delivering it per our contracts.
Mike Howell (07:45):
So you have specialized facilities that you’ll bring these in so they’re not contaminated with other soybeans?
Bob Sinner (07:51):
Yeah, I mean the contracts are pretty specific. We sit down with every farmer. We explain how those all work. It’s very clear we give them flexibility on their pricing with CBOT, but when they deliver, they deliver from their storage facilities right into our processing plants where we clean and package and ship to customers.
Mike Howell (08:08):
Okay. Sounds good. So after you get them processed, how do you get them to the Asian markets? I mean, you’re here in the middle of the United States. I know how much trouble we have moving fertilizer a few hundred miles. How in the world do you get these beans over to Asia?
Bob Sinner (08:23):
Well, that’s a good question. It’s something that I spend more time than I should on, or more time that I really like to because it’s challenge. Here we are in the middle of America, and let’s put this in perspective, we ship in containers, the steel boxes that go on the railroads. They’re either 20 foot or 40 feet long, eight feet wide and eight feet tall, right? They’re pretty consistent. Well, if you think about the imports, where do you think the imports go? They go to the large metropolitan areas. Well, where do our exports come from? Not from the metropolitan areas, they come from rural America.
(08:54):
So when there is a logistical challenge, and so there has to be in some ways repositioning, but you get into certain markets, even Minneapolis where exports far exceed imports. And so those are logistical challenge that we’re always working with and always working with steamship lines and governments and things to help minimize that logistical issue. But our customers need reliability. The United States is the best reliable market, safest food on the planet, and we’ve gotten pretty good at it, but we work directly with ocean carriers, railroads, trucking companies, all of those to make sure we have seamless movement of our containers.
Mike Howell (09:33):
Okay. It sounds like a big job, and I know how you feel about making sure the right vessel is in the right place to get this product moved. We deal with that every day.
Bob Sinner (09:41):
And those are a lot of things are macro issues. I mean, look what happened during the pandemic when imports were so strong that a lot of ways the carriers didn’t want our product because they were trying to get those empty containers back overseas as fast as they could. They fill the pipeline and imports.
Mike Howell (09:58):
Bob, while we’ve been talking, this may should have been a question I asked right at the very beginning, but what’s the difference between the soybeans you’re producing and the soybeans that are regular farmers accustomed to growing? Why can’t we use those regular beans to satisfy this need other than the GMO issue, I understand that part of it.
Bob Sinner (10:14):
I guess in many ways it’s all about the customer. When we’re going to work with food companies, it’s our attitude that we need to listen to our buyer, listen to our customer, what do they want? What can we do to satisfy what they need for their soy foods? And you’re right, as economies across the world grow and mature or expand, you get a shift from the biotech soybeans that they were pulling off a vessel into wanting a higher quality, consistent retail product that’s non-chemical. So they source that by container. They source it by variety.
(10:50):
We help them by providing a portfolio of choices of varieties that come out of our breeding programs that have been designed to respond to customers, what they want, creating beans that have the characteristics that they need. We send them choices. Not every tofu manufacturer in Asia is the same. We want to have a portfolio of choices. They test, then they make a decision. We do a contract. We produce and ship on their shipping schedules. So it’s all about the customer, Mike. It’s all about what they want in a characteristic of a bean. If they said, “Bob, we want biotech, soybeans, that’s what we want, and we want these types of characteristics.” Then we look at a shift and what are we going to do that to satisfy their needs.
Mike Howell (11:33):
Right, right. Something else I’m thinking about, this is a specialty product. They have their certain needs and demands from you. It seems like that’s something they’re willing to pay for, and you’re going to have to get a better price, especially like you mentioned with weed control. You’ve got to take extra steps. So not trying to get too deep into it, but can growers, if they’re interested in this, is there a chance to get a little premium above a regular soybean?
Bob Sinner (11:55):
No question, Mike. This has to be a win-win. Let’s be honest, biotech soybeans have made it much easier for farmers to raise soybeans. This is back to the conventional way. This takes more time, more management time, attention to detail, managing your weed control, and so that attention to detail and extra management comes with a cost. So this has to be a win-win. We want producers to not only be happy with it, we want them to be satisfied that we’re paying them extra. They’re actually making more money raising food-grade beans because they’re getting closer to the food industry. So yes, we pay premiums over CBOT, generally, CBOT is the baseline, and depending on the yield of the beans, we have non-GMO beans that yield as good or better than GMO beans, but we have all the other varieties that may have high protein, or they might be a smaller bean for natto that don’t yield quite as well. And so we have to pay higher premiums. Those premiums not only offset but also create a big win-win for the producers.
Mike Howell (12:56):
Okay. Well, Bob, you’ve given us a lot of information today. If listeners out there may want to consider switching from their current production to your soybeans, how could they go about doing that? What all would be involved in that process?
Bob Sinner (13:08):
Well, Mike, we have contracts with producers in North Dakota, South Dakota, Minnesota, and Wisconsin, for the most part. Our website is sb-b.com. But let me just say candidly and openly, there are many companies, really good companies across the United States that are strategically positioned in different areas of the United States that do the same thing. We have competitors just like the United States has competitors with Brazil and Canada. We’ve got competitors in this country, they’re friends, but we compete for the same markets. So that’s okay, but there’s great opportunity for producers. The supply of non-GMO beans in many ways is not filling the demand. The demand continues to increase, particularly from China. We have a little education process to do with the Chinese. They’re not as knowledgeable about the CBOT than other countries, but it’s gotten to the point where if you need supply at Mr. Customer, you need to consider and think about a contract. That’s how you secure your supply, and that comes right back to those producers that are doing something different to get closer to the food industry.
Mike Howell (14:17):
Well, Bob, we appreciate you taking time out of your schedule to visit with us today. Do you have anything that we’ve missed or anything else you want to leave our listeners with before you go?
Bob Sinner (14:25):
I just want to remind people, and Mike, thank you for inviting me on. This is a big opportunity, growers are doing well with these programs We’ve gotten really good at producing varieties and genetics that improve the yields, and so I think farmers need to really consider it. Being closer to the food industry is really production with a purpose. The farmers that are doing this have gotten to meet a lot of our customers and really have felt good about the relationships. That’s what it’s all about.
Mike Howell (14:52):
Relationships go a long way. Well, Bob, once again, thanks for joining us today. And listeners, as you know, it’s now time that we move into our second segment where we talk about somebody famous in agriculture.
(15:05):
Bob, this happened quite by coincidence today, but the person I want to talk about today was somebody else that had to look at genetics and had to develop a crop specifically to meet his needs. And the crop he was looking at was popcorn. Now, back when I was a kid, we couldn’t turn the television on without seeing a guy with horn-rimmed glasses and a big bow tie talking about, “Here’s a popcorn.” And I’m talking about Orville Redenbacher. Mr. Redenbacher lived from 1907 to 1995, and he was described by the New York Times as the agricultural visionary who all but single-handedly revolutionized the American popcorn industry.
(15:40):
Now, Mr. Redenbacher began his career selling fertilizer and spent his spare time working on popcorn just as a hobby. In 1951, he partnered with a man named Charles Bowman and bought the George F. Chester and Son seed corn plant in Boone Grove, Indiana They named their company Chester Hybrids, and they tried literally tens of thousands of hybrid strains of popcorn before they settled on a hybrid that they were going to use for their program
(16:07):
And they named that hybrid RedBow. They launched their brand in 1970, the Orville Redenbacher Popcorn brand. And six years later in 1976, they sold the company and it has been sold several times since then, but at the time they sold it in 1976, they had captured one-third of all the unpopped popcorn market in the world. That’s quite a feat to manage in that short amount of time. Orville Redenbacher did a lot to revolutionize the popcorn industry, and we wanted to take just a second to mention him on today’s spotlight.
(16:41):
So listeners, if you want to find out more information on this or any of the topics we talk about, you can visit our website, that’s nutrien-ekonomics with a K .com. And until next time, this has been Mike Howell with The Dirt.
