|
|
|
Sunflower partnership pays offBy Larry Dreiling For years now, the theme of value-added marketing has been beating in the minds of agricultural producers as a way to increase their share in niche markets. Yet, what if an established company has a new idea to improve a product they've made a household name. Therein lies the concept of marketing partnerships, where producers grow a specific crop, receive a healthy return on their investment; processors earn a benefit from their sales and food manufacturers see new customers rush to grocery shelves to buy that "new and improved" product. Take the case of mid-oleic sunflowers. According to the National Sunflower Association, the group's membership decided to fund research into changing the fatty acid structure of sunflower oil to meet the future needs of the food industry. The needs were identified as "oil that had a pleasing taste, stability without needing partial hydrogenation and low saturated fat levels." Sunflowers had the natural genetic characteristics to make this change. Research supported by the U.S. Department of Agriculture's Agriculture Research Service, several industry segments and growers, worked to develop an oil lower in saturated fat than the more common linoleic sunflower oil of the time. Grow all you want The key element of this oil, now given the name NuSun, is that it is stable without partial hydrogenation. NSA claims NuSun oil "outshines other oils for commercial use by providing optimal healthy benefits, great taste and superior performance, while remaining trans fat free." Acceptance by producers of NuSun sunflowers has been dramatic. In the decade since its commercial introduction in 1998, NuSun has become an estimated 85 to 90 percent of U.S. sunflower acreage, according to the NSA. A recently completed human NuSun diet study showed that NuSun has heart-healthy benefits of significantly reducing participants' total and LDL cholesterol. An identical olive oil diet did not show similar improvements. With the research in place, it took a processing partner to tell farmers, in essence, "grow all you want, and we'll let you share in the profits." One of those farmers who has taken NuSun flowers to heart, so to speak, is Jeff Deeds, a Sherman County, Kan., producer. Deeds, who farms east of Goodland, is a member of the Kansas Sunflower Commission, an organization dedicated to research, including NuSun flowers. Sharing the profits Deeds ships his sunflowers to a Scoular Elevator in Goodland on a contract with the Archer Daniels Midland Co., which then sells the heart-healthy oil to food manufacturers. "ADM has been a great partner in this oil endeavor. For years they have been trying to convince fryers to use NuSun flowers. We never had enough supply to convince them," Deeds said. "Then Frito-Lay came to the table and bought all they could. They've changed their logos to include sunflowers; that's how much these people want those flowers. They are wanting all the NuSun they can get, all they can crush. We're getting new acres in NuSun every year. As a matter of fact, all the sunflowers I plant are NuSun flowers." For the consumers out there, here's Deeds' pitch on NuSun oil. "Zero trans-fats has been the greatest thing to ever happen to the sunflower market," he said. "It's natural; it's good for you; it's stable, has a low smoke point. They're great." Deeds's real pitch, however, might be for how ADM has worked to let him and other growers share the profits in the dramatic demand for mid-oleic sunflower oil. "In 2005, ADM came out with a pretty high-priced contract and we all jumped at it. They got all the acres they wanted," Deeds said. In 2006, they came out in October with a good contract and we went for that, too. "Then came all the new purchase commitments from Frito-Lay and the others. Oil prices really took off." The stars have aligned The surprise came when ADM announced it was going to adjust producer contracts to reflect the retail price surge. Sunflower production became more profitable than ever. "ADM sure didn't have to do this," Deeds said. "They could have told us, 'Sorry, boys, you're the ones who contracted at the lower price.' They didn't know where prices were actually going to go and they offered us the best price they could at the time. They were willing to take the margin upwards. As oil prices have changed, they were more than willing to help a guy out. "We've been lucky that ADM has really stepped up and helped out. To their credit, they have really stuck with the sunflower market, waiting for the stars to align and now they've lined up, to where they have an end user who wants everything they can get. You want a partner like that. Especially on a minor oilseed and a limited market, there has to be a partnership between the grower, the processor and the end user." Deeds has good feelings about the sunflower industry. "This is a great year for sunflowers," Deeds keeps repeating. His thoughts are no doubt keyed by the good yields he saw this past fall. His dryland sunflowers turned out at about 1,800 pounds per acre. Deeds's irrigated flowers averaged 2,600 pounds. Stick to one rotation Last year, Deeds grew 800 acres of sunflowers: 120 fully irrigated, 120 what he considers limited irrigated (a parcel of land pre-watered on a towable pivot) and the rest dryland. He uses limited tillage in his operation, trying to grow three crops in four years on his dryland acres. His total acreage, of about 1,300 acres, is divided between wheat, corn, fallow and sunflowers. Deeds points to one field of sunflowers that is in its third crop in four years. "We've been doing two crops in three years for years," Deeds said. "We had been wheat-fallowing in the 1980s; then went to growing two crops in three years, such as wheat-corn or sunflowers-then fallow. What I want to get to is a wheat-corn-sunflowers-fallow rotation." Deeds said he once attended a grower meeting and heard the words of Dr. Dwayne Beck, manager of the Dakota Lakes Research Farm, near Pierre, S.D., concerning proper crop rotation. It's an admonishment Deeds said he's sticking to. "Beck said years ago to go with one rotation and stick to it. Don't worry about profiles or weather because those things you can't change. We've been trying to adopt that concept," Deeds said, adding some words that likely make Beck cringe: "He wants to be a no-tiller, but can't." "I want to be a no-tiller. I really, really want to be a no-tiller," Deeds said. "We have a rotation where we are following fallow with wheat and I worry about not being able to control jointgrass and cheatgrass in my wheat crop. So, for the last two operations, I'll start tilling that wheat so I can get the jointgrass sprouted. I'll get the jointgrass worked up and killed before I drill my wheat." Don't jinx me! By growing a minor oilseed, Deeds says he runs into things he may not run into with other crops--like devil's claw and puncture vine. "This past year was the year for puncture vine, or stickers," Deeds said. "We take a four-wheeler across the fields to check them or run to the bins and back; I know we've scattered puncture vine seed right in the tracks of the four-wheeler. It's awful. It's taught me to stay out of the fields with the four-wheeler." Still, Deeds was satisfied with his crop. He's also reporting his fields recently received 8 inches of snow, nicely filling around the stubble in his fields. This gives Deeds a cautiously optimistic feeling. "Just don't say we may have two good years in a row right now," Deeds said. "After eight years of drought before that, it may jinx us." Deeds thinks this is a great time to be in agriculture. "We have a viable oil and confectionary sunflower market and a fine pinto market around here," Deeds said. Those crops will now have to compete for acres, to keep them out of wheat and corn. They have a challenge in front of them because the other crops need acres, too." Rotations and technology have reduced Deeds's labor costs, he said. Coupled with his processor partnerships, this helps him believe that he'll be able to stay in farming for years. "It makes me think like after 25 years, I finally know what I'm doing." Larry Dreiling can be reached by phone at 785-628-1117 or by e-mail at ldreiling@aol.com. 3/10/08 Date: 3/6/08 Advertisement
Copyright/Privacy
Copyright 1995-2009. High Plains Publishers, Inc. All rights reserved. Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com |
Market Snapshot Inside Futures |
