By Dusty Sonnenberg, CCA, Ohio Field Leader: a project of the Ohio Soybean Council and soybean checkoff
When farmers look for new markets, and ways to receive a premium for their crop production, one option is growing an identity preserved (I.P.) crop.
“If you are growing a non-patented seed, you are actually raising an I.P. product that you could be paid a premium for,” said Fred Pond, of Pond Seeds in Van Wert County. “Seed production for larger companies is typically in the ‘I’ states (Iowa, Illinois, and Indiana) and already established, however smaller companies may be interested in contracting with local growers.”
If starting a contractual agreement for an I.P. crop, it is important for farmers to understand the expectations.
“When farmers consider business agreements to contract the production of I.P. crops, it is important to understand why the buyer is paying a premium for the product they are raising,” Pond said. “It helps to understand the risk and better calculate the costs and returns accurately.”
Premiums paid to growers can be based on several factors.
“Some I.P. crops can have lower yields than similar non-I.P. crops,” Pond said. “There are also identity preservation separation requirements.”
The separation requirements can extend beyond the stored crop in a separate bin. Identity preservation can also include field borders or buffer areas that cannot be planted, or if planted, cannot be harvested. It is common for an outside inspector to visit the site throughout the growing season.
The additional harvest and storage costs should be factored into I.P. crop production budgets.
“It is important to remember that seed producer contracts do not want any heat used on seed beans,” Pond said. “There may also be additional equipment that needs to be purchased. Many seed companies like growers to use belt conveyors versus auger systems to protect the seed quality.”
There may also be additional time and cost in applying fungicides, combine set-up and clean-out, as well as equipping storage bins with slotted floors for aeration purposes. Understanding where delivery locations are and how pricing works, such as the Chicago Board of Trade or local elevator prices, is an important consideration as well.
From a production standpoint, there are often specific planting dates and replant seed contract restrictions.
“Often farmers want to plant earlier for a higher yield,” Pond said. “With soybean seed production, the earlier planting produces seed that has lower quality, and there is also a greater risk of frost damage or crop loss. This is a problem when there may be limited seed available for replant.”
If the crop is to be grown organically, there will be additional requirements, such as specific fertilizer products that cannot be used, and added tillage and weed control costs versus a traditional chemical program.
Getting a contract
Most contracts are offered through a local seed business. Other options would be a grain facility that has a market for a specialty commodity. Bunge is one example of this. Ohio State University Extension often makes information available about new crop opportunities in Ohio. As a general rule, the larger agricultural companies do not do local seed production.
Most I.P. contracts are very specific about the delivery and product quality requirements.
“It is not uncommon or an I.P. contract to have a zero tolerance for contamination from other crop seed,” Pond said. “Contracts will detail clean-out I.P. requirements for planting, harvesting, transportation, storage equipment. This would include wagons, semi, unloading augers, grain systems and bins. Combine clean-out can be a 2- to 3- hour job. It includes cleaning out the feeder house, concave, rock trap, anywhere grain can get caught.”
Many crops require field inspections by outside agencies. One common group serving this purpose is the Ohio Seed Improvement Association. The inspections could occur at flowering, or as a mature crop. Typically, the I.P. contractor and inspector will need field maps. There are often harvest restrictions and set asides. They may also require greater buffers based on what the neighbors plant.
Field preparations and planting
Identity preserved contracts can be very specific about how and where a crop is grown.
“Farmers may be required to report a previous crop that was in a select field. As an example, farmers often cannot plant soybeans behind soybeans due to possible volunteer contamination,” Pond said. “They may be required to plant at a later date to lessen replant risk or increase germination of the new crop. There can be herbicide requirements, and setback distances from other crops as specified. As an example, hemp can have up to a 3-mile set-back from other hemp fields. Organic considerations also need to come into play for fertility and weed management.
The contracts will give details about in-season crop management.
“Each crop will have an approved weed level by type and amount,” Pond said. “There will be field inspections to evaluate disease levels, such as head scab or Phomopsis in beans. The timeliness of making an application to manage a disease or other pest can be critical. The joke is that barley always needs sprayed on Sunday at 10:00 in the morning because there is a big rain in the forecast. While it is not always the case, making sure that the options are in place either from a custom applicator, or a farmer having their own equipment is necessary. Crops like barley need monitored, especially around flowering and when weather concerns need monitored so a potential spray window is not missed.”
Contracts can also have herbicide restrictions.
“Farmers may be required to use specific herbicides and insecticides, or they could be prohibited from using a specific product,” Pond said. “There are also preharvest windows and issues with timing for ideal harvest for the seed or food value of the crop to consider, versus waiting for the harvest window and harvest later. It is important to think about if a fungicide or insecticide application is necessary to maintain quality, but still fit in the harvest window. This is especially a concern for food grade products. Sometimes there is not a good choice.”
Attention to detail at harvest includes more than just when the crop is at the correct moisture. “All harvest equipment needs to be thoroughly cleaned prior to harvesting the I.P. field,” Pond said. “Adjustments may be needed to the combine in the field to protect the seed quality.”
Preparing storage facilities is also important in advance. This can include applying insecticide or fumigation to the storage facility.
Moisture is something often not considered by farmers when evaluating a contract, but it does need to be monitored to deliver what the end user wants.
“The harvest moisture and monitoring changes moisture levels during the day can be critical,” Pond said. “The ground conditions may be great, but if the grain moisture gets too low, harvest may need to stop until the moisture is right, especially for soybeans.
“Often moisture can be managed using air versus adding heat. It just depends on the weather and contract details. Don’t expect to be able to harvest early in order to get in a double-crop after the I.P. crop.”
Storage and delivery
Many of the same factors considered during I.P. crop production pertains to the crop storage and delivery.
“It is important to keep crop at the correct specified moisture,” Pond said. “Monitor potential insects while the grain is in storage and be sure to clean delivery equipment prior to use.”