April, 19} 2 



THE I. A. A. RECORD 



Page Five 



Facts About Soybean Marketing 



Annual Meeting of Growers' Association at Decatur Reveals Details of 1931 Crop Sales 



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How the organized soybean grow- 

 ers of Illinois handled 60 per cent 

 of the 1931 commercial crop produced 

 in the state largely on a profit-sharing 

 basis with the larger 

 processors, was re- 

 vealed at the annual 

 meeting of the Soy- 

 bean Marketing As- 

 sociation in Decatur 

 March 10. President 

 John W. Armstrong 

 presided. 



Organized only 



two years ago, the 



Association now has 



J. W. Armstrong a membership of 



more than 4,000 



growers. Up to March 1 it had handled 



1,J13,150 bushels of soybeans. 



The 1931 soybean crop was har- 

 : vested in the face of a demoralized mar- 

 ket for soybean oil and soybean oil 

 meal, the two principal products in 

 processing soybeans. The association 

 early in the fall made a substantial ad- 

 vance to members of approximately 90 

 per cent of the country selling price 

 , at that time. Subsequently the associa- 

 - tion made an additional advance. 



The profit-sharing agreement was 

 worked out with the co-operating proc- 



■ essors by which the latter financed the 

 -. storage and advance on the 1931 soy- 

 bean crop. Many non-members who 



■ sold tlieir beans early last fall realized 

 only 19 to 20 cents net. They are not 

 now in a position to profit by the 

 recent upturn in prices. 



Raised Market Level 



The Soybean Marketing Association 

 has had a decided influence in raising 

 the open market level on soybeans. 

 After a conference with co-operating 

 processors last fall, the Association 

 opened up a brokerage department to 

 handle these processors* bids on a com- 

 mission basis. The processors agreed to 

 go just as far as possible in advancing 

 the market price. As a result of these 

 bidding operations, the Association defi- 

 nitely forced the market up to 40 cents 

 per bushel between Oct. 20 and Nov. 

 15, 1931. 



Your organization was instrumental 

 in another way to help bolster markets. 

 Manager W. H. Coultas told the mem- 

 bers. Early in November the Associa- 

 tion closed a deal to export 50,000 bu- 

 ; shels of soybeans to Germany, being 

 the first handler of soybeans to enter 

 the exporting field. The exported beans 



brought a higher price than those mar- 

 keted at home because shipments from 

 Manchuria practically dried up when 

 China and Japan went to war. More 

 recently an additional 150,000 bu. were 

 sold to a foreign buyer at a very satis- 

 factory price which will enhance the 

 members' final returns for pooled beans. 



■ . Smith Reviews Facts 



Further details of the soybean mar- 

 keting association's operations in han- 

 dling the 1931 crop were disclosed by 

 Earl C. Smith, president of the manage- 

 ment board, the last speaker on the aft- 

 ernoon program. He went back to the 

 beginning of the soybean association 

 and quoted H. G. Atwood, chairman 

 of the board of Allied Mills, who raised 

 the question when the subject of a con- 

 tract between the association and the 

 processors was considered: "Will farm- 

 ers stick together and live up to a con- 

 tract? That is the only question. Will 

 they stick if losses are incurred, or 

 only when everything goes smoothly 

 and the price is high?" 



"I am glad to say to you today," 

 continued Smith, "that the soybean 

 growers have stuck together. The or- 

 ganization is larger by more than a 

 thousand members than it was a year 

 ago. More beans were delivered this 

 year than last. This fact is a great 

 tribute to the co-operative spirit ex- 

 isting among the farmers of Illinois. 



"Co-operative marketing can't sell 

 all of the commodity at the highest 

 price. I want to say emphatically that 

 your association returned to its members 

 more money for the 1930 crop than 

 the average received by non-members 

 during the year. And I will say now 

 that unless the market for soybean oil 

 and soybean meal goes much lower the 

 average settlement to members for the 

 1931 crop will be larger than that av- 

 erage received by all non -members for 

 their beans. 



Rumors Only 



"When we began negotiating for the 

 sale of the 1931 crop last fall there 

 were rumors of a 35 cent per bu. price 

 bein^ offered by one processor. We ran 

 this down and later learned from the 

 individual who had spread the report 

 that he was not authorized to offer 3 5 

 cents a bushel, but that 25 cents was 

 as much as hir^~Qompany could pay. 

 With that and muctj other information 

 we contracted with two processors for 

 a 30-cent per bu. minimum price and 



entered an agreement that if the price 

 went up we would profit to the extent 

 of 50 per cent of the increased returns 

 from the sale of soybean oil meal and 

 soybean oil. 



"The market went to 22 to 24 cents 

 per bu. less the elevator handling charge 

 which in the soybean territory averaged 

 around 3.5 cents. As a result non- 

 member growers who sold their beans 

 at that time got from 19 to 20 cents a 

 bu. But our processors stood by their 

 contract in spite of the fact that the 

 non-co-operating processors were buy- 

 ing beans from non-members for con- 

 siderably less. Ovtr in Indiana where 

 the growers are not organized, beans 

 sold for three to four cents less than in 

 Illinois. And when the Indiana growers 

 got wise to the true condition they sent 

 a delegation to our office and begged 

 us to allow them to get in on our con- 

 tract. This we could not do because 

 the outlet did not justify such action. 



Why the Price Jumped 



"You may wonder why the price 

 later jumped to 38 cents per bu. We 

 got word from an exporter at New 

 York that Germany was interested in 

 buying soybeans. Through an exchange 

 of telegrams we learned that we could 

 sell 50,000 bu. to net Illinois growers 

 38 cents at the country elevator. This 

 was the first export sale on record. 

 Your organization, because it had a 

 large quantity available ready to sell, 

 was enabled to take advantage of this 

 situation. We recently completed a 

 second sale of beans to Germany of 

 more than 150,000 bu. to net a trifle 

 over the country point price in Illinois 

 today. 



"People who are opposed to co-opera- 

 tive marketing for selfish reasons always 

 like to tell about the high price some- 

 one sold for. But they never mention 

 the low price that the majority of non- 

 members got for their crop. What we 

 get for the rest of our beans in storage 

 will depend upon the price of meal and 

 oil between now and the time the last 

 of our holdings are sold. On exported 

 beans we are getting 75 per cent of 

 the profits above the guaranteed mini- 

 mum. The processors get the rest. 



"Some of our enemies are charging 

 that the Soybean Association fixed the 

 price of beans at 20 cents a bu. when 

 the advance was finally determined. I 

 know that before our advance price 

 was announced non-members were net.- 

 ting 19 to 20 cents per bu. for beans 



