Leeds: $180 Million Opportunity

[caption id="attachment_166" align="alignleft" width="150" caption="Chief Executive Officer, Iowa Soybean Association"][/caption]

Back in the 1980s, soybean farmer leaders across the United States were becoming increasingly concerned with the many challenges facing the soybean industry. A hodgepodge of state checkoff programs was not generating sufficient dollars necessary to open markets, increase demand or increase yield while lowering production costs. Part of the challenge was that not all soybean farmers across the country were contributing (farmers in Ohio and Indiana for example) and the flat rate per bushel was thought to be overly focused on production as opposed to increasing farm-gate prices.

Through efforts of the American Soybean Association, the 1990 Farm Bill included provisions for the creation of a national checkoff program. In September 1991, the United Soybean Board (USB) met for the first time to begin overseeing the national checkoff program. Half of the funds collected in each state stay with the state soybean board and the other half is forwarded to the USB for investments on issues of importance across the country and around the world.

Importantly, the rate of the checkoff was set at ½ of one percent of net market value and was the same for every soybean farmer. Through a series of referendum, farmers have strongly supported the continuation of the soybean checkoff since 1991.

However, few of us involved in 1991 envisioned a time when we would produce a crop in excess of 3.3 billion bushels with prices above $12/bushel. In 1991, the US produced a 2.2 billion bushel crop and the average price was $5.50/bushel. As a result of the tremendous growth in the size and value of the soybean crop, annual checkoff collections have grown from $80 million to $180 million/year.

The result is our $180 million opportunity – how do we ensure that all of these farmer dollars are invested wisely?

1. By acknowledging that we still have significant short and long-term challenges, some of which require significant additional investments to address.
2. By making sure that all investment decisions are related to, and driven by, well-thought out strategic plans.
3. By holding all researchers, staff and contractors accountable for results that are measureable and meaningful.
4. By conducting third-party audits and evaluations to ensure the financial integrity of every dollar.
5. By avoiding too many long-term commitments or building too large of an organizational infrastructure as we understand that these prices may not always remain this high. Farmers are also willing to build reserves if investment proposals do not meet their strategic goals and objectives.

Over the years, the soybean checkoff has accomplished much for U.S. soybean farmers. Although we cannot take full credit for the growth in the size and value of the soybean industry over the last 20 years, the soybean checkoff has certainly made a major contribution. If you would like to learn more about the current investments of the soybean checkoff drop me a call. I would be happy to discuss our $180 million opportunity with you.

-Kirk Leeds