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Why farmers are hoping you’ll wear soybean pants

Facing overstuffed silos and forecasts for another huge
harvest this year, U.S. farmers are trying to find new uses for
their corn and soybeans.

Robust demand for processed foods, animal feed and biofuels
isn’t keeping up with a record glut of crops in the U.S. and
around the world, after several years of bumper harvests and
largely benevolent weather. To sell the surplus, farmers and
trade groups are wooing new customers, from car makers to toy
companies.

In recent years, corn and soybeans have been added to the
recipes for Ford Motor Co.

F,
-0.88%

seat cushions, IKEA mattresses, Danone SA’s

DANOY, -0.28%

yogurt cups and Procter & Gamble Co.’s

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+0.17%

Olay moisturizers. Adidas AG’s Reebok brand
recently unveiled sneakers made with corn. Lego A/S earlier
this year said it was toying with using grain-based materials
to mold its famous bricks.

Industry groups also are calling for more research into new
ways that the crops could replace petroleum as a raw material
in industrial and construction applications.

“We’re sitting on a pretty good surplus,” says Paul Bertels,
vice president of the National Corn Growers Association, which
recently called for more research to put corn in more products.
“We stepped back and said, ‘We need to find new uses.’ ”

U.S. corn and soybean stockpiles swelled to a combined 10.35
billion bushels in the first quarter of 2017, a record. Soybean
futures have fallen more than 10% at the Chicago Board of Trade
since mid-January. Corn prices are also under pressure.
Analysts expect big harvests in South America to increase the
global glut, and the U.S. Department of Agriculture said in
March that U.S. farmers also are expecting record acreage of
soybeans this year.

Getty
Images


A
3D drawing pen uses PLA, a corn-based plastic material. The PLA
gets pushed through the tip of the pen so that it comes out
melted and then cools so the user can draw 3D objects with no
computer or software.

The hunt for alternative uses for grains and oilseeds isn’t
new. NatureWorks LLC, the world’s first and largest maker of a
bioplastic called PLA, started in 1989 as a Cargill research
project. But the multiyear glut, which has pushed many farmers
deeper into debt and some out of business, is adding urgency to
that work.

Argo Genesis Chemical LLC of Illinois recently developed its
own highly flexible, soy-made plastics for use in products like
road-paving materials, cardboard and diapers adhesives. The
company says such compounds can help shield manufacturers from
volatile oil prices.

“Long term, we see this being the way the plastics industry
moves,” says Steve Davies, spokesman for NatureWorks. “There’s
tremendous potential to grow.”

Ford


Several Ford models use seat cushions made from soybeans.

For consumers of these new products, the use of corn and
soybeans could be a positive. Many consumers are willing to pay
a premium for sustainability. Switching to raw materials that
can be grown year after year allows companies to tout their
“green” credentials, though researchers are divided over the
overall environmental impact.

Still, these new uses account for only a fraction of the output
in an industry geared toward cranking out billions of bushels a
year for animal feed, alcohol and food. Some 96% of global
agricultural land is used to produce food, feed and pastures,
according to trade association European Bioplastics. Crops for
bioplastics took up just 0.01% in 2014; rubber and cotton
plants along with crops for biofuel made up much of the
remainder.

“Those fringe uses of corn are so specialized that they’re
interesting, but really people are looking for uses that
develop 5 billion bushels of demand,” said Tomm Pfitzenmaier, a
founding partner at Summit Commodity Brokerage in Des Moines,
Iowa. “That’s where the big swing could come.”

But boosters see room for rapid growth, and point to ethanol’s
trajectory in the U.S. as an example. Less than 1% of U.S. corn
was used as ethanol in the 1980-81 crop year, according to the
Agriculture Department. In 2015-16, 5.2 billion bushels, or
38%, of the U.S. crop became biofuel.

Some food-security groups say redirecting grain and soybeans
toward factories takes away land that will be needed to feed a
growing global population. Others say the added value from such
alternative uses won’t trickle down to the farmers themselves,
since they aren’t the ones processing the grains into these
higher-priced products.

“A lot of these folks are going to continue to be caught in the
system where they’re getting a tiny fraction of what the final
product brings to the processors,” says Greg Fogel, policy
director at the National Sustainable Agriculture Coalition.
“That’s not going to solve the problems that currently exist
with the rural farm economy.”

John Motter, an Ohio farmer and chairman of the United Soybean
Board, says that for now U.S. farmers need all the buyers they
can find.

“Farmers are businessmen. We all take a longer view,” he says,
proudly pointing out that the seats in his 2013 Ford F-250
pickup truck are made from oilseed foam.

That’s the kind of business opportunity farmers want U.S.
companies to see in their fields. “Ford isn’t running soy in
their seats because they think it’s a neat thing to do,” says
Keith Cockerline, director of industrial uses at the United
Soybean Board. “It’s because they’re making money at it.”

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