Producer group taps into 'heart healthy' market with low linolenic acid soybeans

By Jeff Caldwell

Published with permission from High Plains Journal, Dodge City, Kansas

When he retired from a government job in Washington, DC, five years ago, Vivan Jennings intended to return to his family's Iowa farm to enjoy a quiet, rural existence.

" We came out, and I was planning on not doing anything," he says.

But, that plan of action was tossed out the window soon after he returned to the 150-year-old farmstead near Columbus Junction, Iowa. Since then, Jennings has been involved with a group of farmers producing a commodity that is seeing explosive consumer demand in the U.S. today.

The former U.S. Department of Agriculture deputy administrator for the Cooperative State Research, Education and Extension Service and Iowa State University Extension agronomy specialist is now the director of the Iowa Quality Agriculture Guild, LLC. In this capacity, Jennings works with more than 35 farmers in southern and eastern Iowa to produce 1 percent linolenic acid soybeans. In their first year of production, Jennings and other producers in the group are currently in the process of procuring licensure and certification for the soybeans, which yield oil free of transfatty acids, making it a "heart healthy" alternative to conventional soybean oil used in restaurants and kitchens around the U.S. today.

A "different view" of value-added agriculture

As a former ISU Extension agronomy specialist prior to his work with IQAC, Jennings knew of and had worked with low linolenic soybeans for around 25 years. After learning of its growth potential in southern and eastern Iowa following his return to the state, Jennings sought funding for the IQAG through a USDA Rural Development grant. After drafting and submitting a proposal outlining the aspirations of the 30+ farmers to produce the niche soybeans, they received a check for $184,000 from the federal government. He credits the vision and unique approach of the group for landing the USDA grant.

" A lot of people look at value-added agriculture as some new technology coming along. This group took a different view of how to do that," he says. "We were saying we weren't going to be satisfied, necessarily, with a few cents-per-bushel premiums for technology, some of which eventually disappear."

Another way the IQAG soybean producers are different from their commodity-based peers is through the payment they earn for growing low linolenic soybeans. Alongside the standard premium earned for production, one that has yet to be cast in stone, IQAG members earn a dividend from the entire group's earnings. This has caused a shift in the general mindset, different from conventional commodity production and marketing, according to Jennings.

" The way we're structured, it gives the farmer more opportunities to make money. There's going to be the premium, but the farmers will also get paid profit for the sale of the product as part of the guild," he says. "It's a different way of doing business. Typically, you sell a product and say 'Well, I'm through with that.'

" But, we're not through with it until it gets into the hands of the end users."

This way of marketing, lasting through the consumption of the low linolenic soybean oil, is also a relatively new structure for smaller, producer-based groups like the IQAG. With ultimate control resting in the hands of the producers, management decisions are made at the grass roots level. At the same time, vertical integration planted in these grass roots allows producers to control how their crop is processed and delivered to the consumer. Essentially, Jennings calls it a "locally controlled, vertically integrated" organization.

"This really means that, rather than a centralized, top-down company, we're controlled at the grass roots level," he says. "But we're vertically integrated, in that we will jointly link and negotiate with oil processors, food manufacturers, all the way to the customer with relation to our particular products."

Moving forward with seed

After organizing the IQAG low linolenic soybean producers' group, Jennings and other producers are nearing the first harvest of their "heart healthy" crop. Just beyond this horizon is the task of producing and certifying seed. For this year's crop, the group brought in seed from outside U.S. borders, but this is something Jennings is looking forward to stopping.

"We prefer to raise our own seed, and we are going to do that now," he says.

To this end, the IQAG is working with the Iowa Crop Improvement Association and the ISU Research Foundation to develop Identity Preserved varieties of the non-GMO seed to produce high-quality Altered Fatty Acid (AFA) soybeans, like those with low linolenic acid contents. The process of procuring certification and identity preservation for wide-scale seedstock is a complex one comprising a battery of seed tests and management analyses, according to Eileen Wuebker, ICIA professional and scientific faculty member.

" After harvest, the conditioned lot of seed will be tested to assure it meets varietal purity and linolenic acid standards, then be labeled with ICIA labels," she says. "ICIA offers documentation, testing and traceability services to assure that the grain is meeting the necessary specifications for oil production."

The work necessary to obtain certification for the low linolenic seed does not lie just in the ICIA's hands, but the IQAG producers themselves. Their duties will principally comprise education and learning the critical elements to producing soybean seedstock. Thus far, Wuebker says IQAG has shown an assured willingness to comply with the required responsibilities.

" It is essential that they understand the critical concepts of seed production, such as the importance of thoroughly cleaning equipment prior to planting, harvest, transport, storage and conditioning to prevent contamination of the seed with other soybean varieties, noxious weeds and other undesirable materials," Wuebker says. "There are a number of growers, like IQAG, who are producing seed for the first time, and we are glad to assist them with this process."

The consumer end

Following the general vision of IQAG, with involvement up to when the consumer has his or her hands around their product, Jennings says the marketing of soybean oil derived from this year's crop has already begun to a wide extent. In addition, the group has begun to brand its product with the name "Asoyia." In this way, the product's Iowa origin is clearly shown, with "ia," the state's postal abbreviation, added to the brand name.

To date, the group has done some local and statewide promotion, but that pales in comparison to the marketing that has been directed to restaurateurs and food distributors in large metropolitan areas, like Los Angeles, Calif. In seeking end-users in markets like these, Jennings says the healthy aspect and other favorable characteristics are pointed out first.

" Not only is it free of transfatty acids, but it is a much more heart healthy oil, so it's going to be better from a cholesterol point of view," he says. "Another advantage is that it lasts longer in fryers, so you don't have to change the oil as often."

Once the positive health and convenience characteristics are highlighted, the focus shifts to flavor. Unlike conventional soybean oil, which usually contains around seven percent linolenic acid, Asoyia's chemical makeup ends the problem of lingering flavors in frequently used oil.

" One problem with conventional oil is, if you fry fish, then the french fries you fry later may taste like fish, too. That's not the case with this oil," Jennings says. "It's a different makeup, in relation to bonding. As a result of that, it does not break down and pick up different flavors."

One thing that is consistent with IQAG's low linolenic soybean oil marketing, according to Jennings, is the way their product is presented to food distributors and restaurateurs. By intertwining the benefit to the farmers who produce the low linolenic soybeans with the quality of the oil their crop yields, the end-user is made aware of the role they play in the producers' welfare, in addition to the affirmation of quality.

" You can't totally separate one from another. It's an eye-opening thing when we go to these restaurants," Jennings says. "It creates a lot of interest when we say what we're doing and how it's benefiting agriculture.

"There's a sociological impact when they know they're helping the farmer out more directly."

The future of low linolenic soybeans and seed

Based on the data on hand today, Wuebker sees a promising future for crops like low linolenic soybeans. Even though there can be additional costs incurred by the producers, they will continue production if the necessary support system remains in place.

"All the information currently available indicates there is great potential for the AFA soybeans," she says. "Certainly, Iowa producers are very capable and willing to produce Identity Preserved or specialty crops, but it is critical that they be well compensated in the form of premiums for this product."

Another factor influencing production is seed availability and production flexibility. Today, IQAG is unique in its non-GMO production, yet Jennings admits this will probably change in the future, once more crop input companies see the benefits of the low linolenic soybeans. As a result, he sees future commercialization of the seed to come with the inclusion of seed traits that will foster more large-scale production.

" We'll see private companies start to genetically modify the beans, making them Roundup Ready," he says. "Our market depends on the beans not being genetically modified, creating our niche. Yet probably, if they were GMO, they could be produced at a little less cost."

Geographically, the two varieties of low linolenic soybeans that comprise the bulk of IQAG's acres could be grown in other regions, but expansion into other parts of the country will require different seed qualities. This may mesh well with the IQAG's potential boost in future acreage.

" We don't go down any further south into Missouri, but they could be grown all the way across Nebraska and over to Illinois," Jennings says of the low linolenic beans. "I think [IQAG] will grow in acreage whether or not we grow in membership."

So, how will Jennings' "retirement" proceed after this year's low linolenic soybean crop is harvested? He plans on continuing his work with the IQAG, which will partly entail his function an Extension specialist years ago. At the same time, marketing "heart healthy" soybean oil will require a somewhat different approach, one rooted in business principles necessary to function in a competitive marketplace. Finding a balance between the two, he looks forward to working with the IQAG farmers to continue to produce something for which there will be strong demand.

"The Extension Service is based on the idea that, if someone has a question or a problem that needs to be solved, you provide the answer. In this, because there are things that are proprietary, there are things you protect, in regard to what you are doing and how you are doing it," Jennings says. "You've got to go about business as though you're a business. That's just the way it is."

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