By Tim Kalinowski, Staff Writer
Alberta is lagging behind other jurisdictions across Canada and the United States when it comes to soybean production. As of last year there are less than 4,000 hectares of soybeans grown in the province compared to the millions of hectares that are under production in Ontario, Manitoba and Saskatchewan. There are various reasons for this says Dr. Manjula Bandara, a research scientist studying the issue at the Brooks research station.
“It’s a new crop in Alberta, but it started in Ontario in the 1980s and 90s as a forage crop,” explains Bandara. “With genetic improvement it has now become an oil seed crop in eastern Canada and has been slowly moving into western Canada…The challenge is it has to compete with existing crops and with the market. We have experienced growers in the east and there is no breeding program in western Canada outside of Manitoba. We also have to find suitable varieties for growing in Alberta, and what practices make sense for local growing conditions.”
Bandara says the pulse industry has high hopes for soybean production in southern Alberta under irrigated conditions. The crop produced 32-36 bushels per acre on average under dryland conditions in Saskatchewan and Manitoba the last few years.
“We expect soybean crops being grown under irrigation should exceed four tonnes per hectare or 60 bushels for acre,” states Bandara. “The biggest challenge has been to produce a seed variety that can reach that level in Alberta. Under experimental conditions we managed the highest yield from Brooks out of our four southern trials, and that was 58 bushels per acre.”
Bandara and his colleagues have been testing nearly two dozen varieties since 2012 with the hopes of finding the perfect seed to meet Alberta’s growing conditions. He admits it is still a work in progress, but he is optimistic they are getting closer and closer all the time with new northern varieties set to hit the market in the next few years.
“It’s not going to go (big quickly) like Saskatchewan. It’s not going to go like Manitoba. It’s going to go more slow and steady in Alberta,” says Bandara.
Jim Beusekom, president of Market Place Commodities, agrees. He says the economic outlook for soybean is certainly in line with canola, for example, at about $10-12 per bushel. With the new soybean crush plant established in Claresholm, Beusekom says the picture keeps getting better for Alberta soybean producers.
“The plant is currently crushing anywhere from 500 to 800 metric tonnes per week; which would represent somewhere in that 30,000-35,000 acres needed to run this plant at capacity,” explains Beusekom. “There is only about 10,000 acres in Alberta. So we need to see at least triple to quadruple that to make us self-sustaining with the province’s own supply of soybean crop. Naturally, we’d like to buy more soybeans in Alberta. We would like to see production increase in Alberta. If the seed dealers have the right seed varieties, and can promote the production from that stand point, then finding a market is not a problem.”
Unlike canola, soybean is crushed for the meal more than the oil. However, soybean produces both and has proven itself to be a valuable variety for cattle feeders.
“Until now, (with the establishment of the crush plant), there has not been a proper outlet for soybeans. Yes, you could always sell them and move them, but until the crush plant came along you were selling them back into Manitoba or the States (for processing), a negative basis zone. That did not make sense. Now you’ve got a plant here and an opportunity to grow soybeans that will be used right here in Alberta. It’s a value-added proposition all around,” says Beusekom.
Beusekom says what the soybean industry in Alberta needs now more than anything is for farmers to take up the challenge of increasing the total acres under production.
“Somebody has to start. I realize it is going to be a learning curve to understand the agronomy that goes behind it, and as far as harvest and things like that go. But I know farmers are very innovative. They are very good at what they do. And with technology today, they do a good job on many different types of crops that never used to be grown here. Soybeans haven’t made a lot of progress that way. We just need people to try it to get good at it, and I believe it will work.”
If the new Alberta specific varieties of seed Dr. Bandara is producing is one leg of the stool, and the establishment of Claresholm crush plant is another, the final leg has to be getting an insurance system in place to help soybean producers mitigate their risks. Until recently soybeans were not covered by crop insurance in Alberta.
Thanks to a new program called the “New Crops Insurance Initiative” established by Alberta Financial Services Corporation (AFSC) coverage for soybean production is no longer a limiting factor in the province. Ken Handford, a program development analyst with AFSC, is credited as one of the main architects of the New Crops Insurance Initiative.
“It was a mechanism AFSC brought in that allowed clients to have some level of insurance for crops that weren’t covered under traditional crop insurance,” explains Handford. “The whole idea is we wanted to give the producers a chance to grow and insure some of these (new) crops so AFSC would cover the risk for them.”
As Handford explains: The program does not work like traditional crop insurance.
“The coverage we offer isn’t your typical production insurance for soybean producers,” confirms Handford. “It is based on some of the main costs of production they have for growing the crop. So seed cost, the herbicide and fertilizer cost, and the fuel cost associated with various tillage operations. We also brought in, along with this, and because land is a major component of it, we actually put in what we call the land cost factor, which is really analogous to what they would see for a cash rent type approach.
“We also make a distinction between dryland and irrigated land. On the irrigated side we actually cover them for the cost of putting water on.”
According to Handford the process for making a claim is slightly different as well.
“They way we calculate the losses for the crops, it’s not based on what happens with that specific commodity they are growing. Since we don’t have enough information about these commodities, what we are using is the losses they have on other insured crops with AFSC. So the indemnities are done on a proxy basis… Most of the crops are available for the subsidized hail endorsement as well.”
Handford says he can see no reason why soybeans can’t make greater inroads into Alberta agriculture in the future. It is definitely one the specialty crops AFSC feels has the potential to go mainstream and eventually become enrolled in standard crop insurance, as it already has been in other provinces.
“This program just gives (producers) the opportunity for spreading the risk so they are not completely on the hook for all the risk if they are trying grow something new.
“If we have some sort of backstop like this program it will help to mitigate some of that risk they will be facing,” says Handford.