The Soy Industry Scrapple

My good friend Ed Winkle shared some thoughts on his blog this morning regarding the ongoing “family feud” in the soybean industry between the American Soybean Association, the United Soybean Board, the US Department of Agriculture, and the newly-formed United States Soybean Federation. Confused? For context, go back to our Lindsay Hill’s on-the-spot reporting from December’s Soy Connections Conference, when ASA first announced they were asking USDA to investigate allegations of mismanagement and questionable dealings with the USB’s handling of the soybean checkoff. Lindsay was one of the only journalists on the scene, and provided the first reactions of soy industry leaders to the situation.


Subsequently, the USDA has agreed to undertake the investigation, which will undoubtedly take quite a bit of time to complete. The allegations involved are quite serious, and as such, the investigation and/or audit will be quite serious, also. I haven’t written a great deal about this from a commentary perspective; our reporting on the issue has been related strictly to the facts of the story as it were. After reading Ed’s thoughts, and after listening to Orion Samuelson on This Week in Agribusiness with his “Samuelson Sez” commentary, I feel obliged to share some thoughts.


First off, having interviewed several of the leaders of both the United Soybean Board and the American Soybean Association, I am convinced of two things: first, that I trust the farmer-leaders elected to represent growers at the top levels of both organizations; and secondly, that this investigation and audit is necessary. As a proponent of the checkoff concept, I firmly believe that from time to time it is necessary to prove the strength and support of our commodity checkoff programs. In some instances in the past we’ve seen referendums won, in very recent memory we witnessed the checkoff philosophy upheld in the Supreme Court, and in this case, we need to see that the oversight of USDA can insure the best interests of farmers are represented.


Farmers are investors in these commodity promotion and research programs; by investing their checkoff, these producers are insuring the continued success of their industry, and helping to further their own hopes for profit potential in the marketplace. As Orion points out, the success of marketing campaigns like Beef: It’s What’s For Dinner, Pork: The Other White Meat, and Got Milk? prove the efficacy of farmer-led promotion in building demand. However, if farmers question the stewardship of their checkoff investment, these programs can not long survive.


I have faith in the good-hearted intentions of men like Rob Joslin, a friend and neighbor who serves as First Vice President of the American Soybean Association. When you listen to Rob speak on this issue, it is very clear that he is extremely concerned about the long-term well-being of the checkoff. To those who assume ASA is involved in some simple spat or smear campaign, I tell you that when I listen to Rob, I have no doubt that he’s been presented with evidence of challenges he feels must be addressed for the checkoff to continue its good work.


If agriculture as an industry engages in a “shoot the whistleblower” mentality on this issue, all of our checkoff programs are in danger. An organization of the size and scope of the United Soybean Board managing the vast financial resources of the soybean checkoff must be able to withstand the scrutiny of sunlight and transparency. While all of us would likely prefer that agriculture’s laundry not be aired in the public eye, in this case the disinfectant of sunlight might be just what the doctor ordered.


The impartial investigators at USDA’s Office of Inspector General will get to the bottom of this issue, and while I believe that ultimately the farmer-leaders of both organizations will help craft a resolution that will benefit the long-term best interests of soybean farmers, there is no doubt that all involved will experience short-term pain. The critical point of inflection is to ensure that the seriousness of the situation is not obscured by petty infighting or accusatory name-calling. As Rob Joslin put it so eloquently, as a farmer, the leaders of ASA have nothing to gain by scuttling their own checkoff program.


As to another critical point Orion makes in his weekly commentary, there is indeed one thing we don’t need in our industry, and that is another commodity organization. It seems that each time we have a difference of opinion within a particular policy debate, a group of the disaffected strike out on their own to form some manner of splinter group. I receive on a daily basis press releases and information from three separate non-checkoff “national” beef organizations, two different corn organizations, two general farm organizations, and now two different soybean groups. The formation of the US Soybean Federation, it’s leaders suggest, is because ASA has “lost its focus” on the policy arena in Washington. I can tell you from our reporting on the Farm Bill Debate and other federal policy discussions that ASA’s farmer leaders are very much focused and engaged in the policy arena in our nation’s capitol.


The newly elected officers of this USSF group, founded by three states, admit that they were actually launching their splinter group in response to ASA’s request for a USDA investigation. To this reporter, that admission is a questionable motive for launching a competing policy-driven association. At least two of the three founding states (Mississippi, Missouri, and Minnesota) are served by organizational staffs that operate both the membership organization and the checkoff board. This is an important note given that the vast majority of of a farmer’s investment in the soybean industry is via the checkoff. Look at it this way: if you raised 100 acres of soybeans at 40bu/acre and sold those beans for $10/bushel, you paid (at the rate of .05 percent of the value of the beans sold) somewhere in the ballpark of $200 in checkoff assessments. If you paid your Ohio Soybean Association dues this year, you paid at most $75… Beyond that, every farmer who markets soybeans pays the checkoff assessment, while membership in a state soybean association is voluntary. For the staff and board members of the three states attempting to fracture the organized soy universe, obviously the dollars and cents make sense in terms of attempting to discredit ASA as a means of supporting the checkoff.


At the end of the day, my advice to all farmers is to keep your powder dry and reserve judgment on the leaders of both the American Soybean Association and the United Soybean Board. I’ve long believed that in the case of an argument between two parties, the truth is almost always somewhere in the middle. In this case, the USDA will thoroughly investigate and audit the situation with the best interests of all producers in mind, make their rulings and recommendations, and a suitable resolution will come to pass. In the meanwhile, neither the accused nor the accusers should be shunned or disavowed. And when all is said and done, this too shall pass, and agriculture will prosper for having once again reaffirmed that the checkoff system works to the benefit of all farmers.