Minnesota farmer vertically integrates to meet customer demand
Drew Parsley knew the good times wouldn’t last. When soybean prices were climbing to near-record levels in the late 2000s, he began planning for ways to weather the storm that would inevitably come when prices dropped.
His solution to vertically integrate and market soybeans directly to overseas customers has paid off.
Nearly 10 years ago, Parsley, who farms in extreme northern Minnesota, near Warroad, began reaching out to soybean brokers in Japan and Korea who had demand for U.S.-grown soybeans. His initial contacts grew into relationships, which led to market opportunities. Parsley now grows, containerizes and direct-markets food-grade soybeans used for sprouts and natto.
“This is our seventh year of vertically integrating,” Parsley says. “When beans were $15, we were looking for a way to be profitable when they were $8. We saw this as a good plan to position us for when prices go down. We took the opposite approach and developed our program before prices dropped.”
Forward thinking is nothing new to the Parsley family. Parsley’s father was one of the first to raise soybeans in southeastern North Dakota before he moved to Warroad in the 1970s. The elder Parsley again became a soy pioneer by raising some of the first soybeans in the area. Today, the Parsleys also grow malting barley, turf-quality grass seed, and both GMO and food-grade soybeans.
Located so close to the Canadian border, their growing seasons are cool. Finding soybeans that buyers wanted and could grow in those conditions presented a challenge.
“It took some time to find varieties that met their needs and worked well here,” Parsley says. “Once we found them, we knew we had a plan that could work.”
Parsley hires out the soybean cleaning and bagging, but has on-farm facilities to containerize and ship food-grade beans that he and six other nearby farmers grow. The vertical integration meets customer demand and helps the bottom line.
“Getting premiums above Chicago Board of Trade prices keeps us profitable in tough years,” Parsley says. “It enhances the peaks and levels things out when prices are bad.”
Parsley knows buyers regularly get calls from farmers interested in growing specialty soybeans as a way to offset low prices and to seek premiums. Having a long-lasting relationship and track record of meeting customer demand leaves Parsley in an enviable position; buyers are more likely to stick with him because of the relationships they’ve developed.
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