Discounts alert farmers to soybean protein falling short


With an emphasis on maximizing bushels and minimizing frost risk, minimum protein content of soybeans hasn’t been on the radar of most Western Canadian growers, as acres in Manitoba and Saskatchewan have exploded from 825 thousand in 2012 to 3.1 million in 2017.

The same can be said for breeders developing new varieties. As acres have expanded north and west on the Prairies, the signal from the industry has been to focus on boosting yields and shortening the time to maturity.

“The market’s been paying for bushels and so that’s been the focus,” says Francois Labelle, executive director of Manitoba Pulse and Soybean Growers (MPSG).

But that could be changing.

At least one soybean buyer in Western Canada has recently introduced price discounts based on soybean protein content. There are also reports that growers in Saskatchewan have had beans rejected due to too-low protein.

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More research is needed to fully explain why, but soybeans grown in areas with shorter seasons tend to have lower protein content. With short-season soybeans, protein and yield appear to have an inverse relationship, similar to wheat — the higher the yield, the lower the protein.

As shown on the Canadian Grain Commission chart below, protein content in beans from Western Canada (pink line) is generally lower than beans from Eastern Canada (purple line.)

The international market likely has already been discounting Western Canadian beans based on protein, but that price difference was not as transparent for growers as when it shows up as a discount at the elevator.

“Up until now, that’s been what I would call a hidden discount. It was part of the basis growers were seeing, but now it seems to be an issue that came up in 2017,” says Labelle, noting the dry conditions last summer may have been a factor contributing to low protein in the current marketing year.

Protein content averages of Canadian soybeans, 2000 to 2016 (source Canadian Grain Commission; click to view report)

In the U.S., grain companies blend high and low protein beans domestically before crushing or shipping them off to Asia, but there are fewer blending opportunities like that for Western Canadian beans being shipped directly through Vancouver.

For growers, the introduction of protein discounts raises plenty of questions — what causes the lower protein? Should variety decisions be based on protein, as well as yield, similar to wheat? What is known about protein differences between varieties?

“That information is not sitting out there in front of people. I think it’s information we’ll be able to provide in the future,” notes Labelle. “That will definitely become a deciding factor in the future if we continue to see discounts and when we start seeing what the value of these discounts are. People will pay attention.”

The lower protein content is also a factor to be considered by any potential crusher looking to build in a northern growing area.

Labelle acknowledges it’s a potential hiccup in the expansion of soybean acres in the West.

“I think this will be a little speed bump in the road, but we’ve already seen a lot of growers have a real economic benefit from growing soybeans, so will they back away from it? I think the excitement to grow soybeans is still there, as long as the economics are there.”

Listen to Francois Labelle discuss the low protein issue and the possible implications for soybean production in the Prairies:


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