Article Archives

30 Years Ago

Monday, February 1, 2021
filed under: Historical

        Soy Oil and the Price of Sunflower / By Don Lilleboe — “What . . . determines how much the processor — i.e., the major sunflower crushers located in Minnesota and North Dakota — is willing or able to pay for sunflower seed? Numerous factors are involved, of course — all of which revolve around supply/demand. Some of them are perennial influences (such as production levels and stocks of soybeans, sunflower and other major oilseeds; others more periodic (such as competition fro seeds from the birdseed sector).
        “There are three major factors a sunflower processor has to consider when setting his daily bids for seeds from the countryside: (1) At what price can he sell his sunflower oil? (2) At what price can he sell the sun meal byproduct? (3) At what level of efficiency can he extract the oil from the seeds?
        “Though soybean is the world’s leading source of vegetable oil, the oil from the soybean is actually a byproduct. Most of the soybean’s value is derived from its meal. Sunflower’s value, however, comes mainly from its oil. Whereas oil extraction rates are 18-20 percent, with sunflower 40 percent or more of the seed, by weight, will consist of oil.
        “That’s why the single most important factor in determining the local price bid for sunflower seeds is the value of their oil. As a rule, 75-80 percent of the value of oil sunflower seeds is in the oil.
        “The best barometer of that value is the soy oil futures price at the Chicago Board of Trade. Because the soybean industry is so large — and because the soybean is the leading source of vegetable oil and soy meal is the world’s dominant protein meal — the CBT soy oil futures board reflect more than simply soybeans. It simultaneously serves as a register of the value of all leading world vegetable oils, such as sunflower, canola, cottonseed, palm and peanut. Each oil functions outside the soy oil price; but it usually follows, fairly closely, the ups and downs of soy oil.”

        Kansas Elevator Enjoying Its Sunflower Ride / By Don Lilleboe — “The growth of High Plains sunflower acreage during the latter 1980s and first year of the 1990s has been a real business boon for a number of the region’s seed suppliers, elevators and merchandisers. Just ask R.A. True.
        “True manages Mueller Grain Company of Goodland, Kan. Being located near the Kansas/Colorado border — in the heart of the High Plains sunflower belt — has helped Mueller become a major warehouse for the region’s sunflower crop — both oil-type seeds and confections. At a time when storage of CCC grain stocks has declined dramatically, sunflower has provided firms such as Mueller Grain with a welcome alternative.
        “ ‘The history of this operation is that we were warehousemen,’ True explains. ‘The U.S. government was our largest customer; we always stored wheat. Now we don’t have the wheat the store, so we’ve been learning how to store sunflower.’
        “Acting strictly in a warehouse role in 1985, the first year the company handled sunflower, Mueller shipped out numerous unit trains of oil-type ’flowers to the hungry Mexican market. It continued to utilize its natural freight advantage into that market, at times offering its own contract to farmers. At first, a strong 80 percent of the oil sunflower handled was contracted prior to delivery. ‘Now I would guess it’s just the opposite,’ True says. . . .
        “The shrinkage of the Mexican market during the past few years found Mueller Grain — which boasts a total storage capacity of 3.0 million bushels — searching for an alternate outlet for the standard oil-type production. True found it in the birdseed sector.
      “ ‘We were faced with a relatively large crop here and really no place to go with it,’ True explains. ‘So we began getting acquainted with . . . people in the birdseed business. We didn’t want to give up on sunflower, since it had been so good to us.’
        “True estimates that of the oil-type sunflower handled by Mueller Grain during the past two years, probably 70 percent has gone into the birdseed market.”

      Cattail Management Helping Both Waterfowl & Sunflower / By Don Lilleboe — “Cattail management is now part of the ‘battle of the birds’ in the Dakotas, with the coalition consisting of USDA’s Animal Damage Control Unit, the National Sunflower Association, various sunflower growers and other landowners, several departments at North Dakota State University and South Dakota State University — and, some might be surprised to hear, the U.S. Fish & Wildlife Service (FWS).
        “At the core of this effort is the recognition that cattail-filled wetlands often provide the primary roosting habitat for large blackbird populations depredating sunflower fields. If that roosting habitat is significantly reduce, the theory goes, the blackbirds will move out of that area in search of another roosting site. From all indications, the theory is accurate.
        “The ‘war of the cattails’ presently is being conducted on two fronts within North Dakota: (1) The Fish & Wildlife Service has developed several programs under which it assists landowners in removing cattails by cultural or mechanical means. (2) Scientists with the Denver Wildlife Research Center of the USDA Animal and Plant Health Inspection Service (APHIS) are conducting research on the control of cattail populations via aquatic herbicides.
          “The FWS effort in South Dakota is just getting underway, though not cattail-specific in its approach. A grazing program has been instituted, and there’s a ‘fair market rental’ program available to landowners interested in restoration of drained wetlands. In addition, South Dakota researchers are generating data pertaining to the USDA-APHIS studies.”