Market specific cropping intense Growing and selling market specific crops can be profitable. But, as with any innovative endeavor, it takes intensive planning, astute management and even a little luck to actually collect higher profits.
Hanover, Va., farmer Kevin Engel is gradually adding to his mix of market specific, humanly consumable crops, including white and yellow corn, hard red winter wheat, black soybeans for the Korean market, black and white beans for the Korean market, brown beans for the Korean market and tofu and natto soybeans for Japanese markets.
He also grows both Asgrow and Pioneer seed beans.
Yes, there are premiums to be had from these specialty crops. There are also opportunities to spend extra time, effort and money producing, harvesting and storing market specific crops, only to see potential premiums evaporate because of unanticipated problems. Engel has experienced both success and disappointment.
"If market specific crops is something a grower wants to do, he has to realize it is going to be something special for a specific market, not normal, routine production. This takes extra planning and a lot of extra work. All the little things don't sound like much individually, but when they are added up, they start to take away from your day," Engel says.
One of the first considerations is where you will plant these identity preserved crops so they can be kept separate from other, similar commodities. You must also determine how soil types, planting dates, seeding rates and other agronomic variables will affect production. A history of high yielding, conventional soybeans and corn does not guarantee success with white corn or specialty soybeans.
"Most of the specialty soybeans I plant do best behind barley," Engel says. "They just don't yield as well behind wheat. Most of the varieties I plant are early Group Vs. I'd like to have some Group IVs. I would think the Group Vs would do well in North Carolina."
Market specific crops present challenges other than variety selections. Engel recalls purchasing the largest cell plates available for his planter to allow him to plant large-seeded soybeans for human consumption. He spent extra time coating the seed with fungicide in a small cement mixer. Before the planter had traveled 300 feet down the row, the population monitor indicated the seed count as nearly zero. The large seeds were sticking in each cell.
"Normally I would just have to call the dealer and order plates with larger cells. But I already had the largest plates available for the planter," Engel says. "I thought about the problem for a while. Then I decided I needed to do something to make the seeds slicker. I bought a bunch of baby powder and mixed it with the seed in the cement mixer. When they were all coated with baby powder, they worked fine in the planter and they all came up fine. That's just one of the unanticipated challenges we run up against with specialty crops."
He has also discovered that very large soybean seeds do not do well in a no-till environment. The big beans break their necks trying to push through the soil and residue. Engel selects sandier fields and breaks the ground before planting large seeds. He no-tills other, smaller seeded specialty soybeans and most of his other crops.
Because these specialty crops are sold into specific markets, Engel has to read his contracts carefully and be certain to use only approved chemicals.
"I spend a lot of extra time scouting fields in the fall, identifying weeds," he says. "I have to know which weeds are in each field and which herbicides will control those weeds. Then I have to make sure I can control the weeds with chemicals the specialty markets will accept. That's true for soybeans, corn and hard red winter wheat."
Harvest time presents another set of challenges. Some of the specialty soybeans lodge and others tend to shatter easily. If Engel runs his combine head low enough to pick up lodged beans, he might find his beans rejected at the market because of dirt.
Dirt is not acceptable in beans destined for the human consumption market. If he waits a few days too long to begin harvesting, he can lose most or all of his premium to shattering.
"Harvesting is management intensive and time consuming," he stresses. "We have to make sure everything is completely clean before we start harvesting; the combine, the trucks, the augers, the bins, everything. Even a few kernels of corn or barley chaff or some other soybean variety can contaminate a whole load of beans and we'll have to sell them as regular soybeans. We lose the whole premium. We have to go through the whole cleaning process for each variety. If you don't have the time and the labor to do it right, you will be disappointed with specialty crops.
"If we do everything right all season and I forget to tell the person driving the truck from the field to the bin that he has to make sure the auger and the bin are completely clean before he unloads the beans, I've lost the whole premium. That's the kind of thing you have to think about in January when you are deciding whether or not to grow a market specific crop," Engel continues.
All of the specific requirements for receiving premiums are typically detailed in contracts Engel and others sign before planting and marketing specialty crops. He has learned to read each contract very carefully.
"Don't just look at the maximum premium per bushel and assume you will receive that premium for every bushel you produce," he cautions. "I have been told that I deliver some of the better beans to Montague Farms (for the Japanese market). I get a premium on about 92 percent of the beans I deliver. With one mistake I could knock that down to 70 percent or lower. You need to realize that before you start assuming how much premium you will receive."
Buyers of specialty crops are also looking for reliable suppliers.
If he contracts for 40 bushels per acre from 300 acres, Engel likes to hedge his bets by planting 350 acres. He also likes to plant specialty crops where he can provide irrigation water to hedge his bets against drought. If he has an excellent crop, he might be able to sell the extras into the specialty market. But, he realizes that he is just as likely to have to sell those extra beans to the oil market for regular prices.
"You've got to be able to deliver what the contract specifies or the buyers will not want to keep doing business with you. If you are a reliable supplier of high quality crops, the buyers will come to you when they need other specialty crops," he says.
That's an opportunity Engel intends to take advantage of. He is convinced that Southeastern farmers will have opportunities to produce specialty crops for industrial, chemical and pharmaceutical uses. His experiences with the market specific crops he is already growing are preparing him to take advantage of these yet-to-develop specialty markets.
"I feel thankful that we have had an opportunity to learn with the specialty crops we have grown," he says.