Japanese connection helps Stonebridge succeed in non-GMO market

Iowa soy exporter rolls with the soybean cycles

When Steve Ford was growing up in Japan, soy was not one of the foods that showed up on his dinner table. But today, food-grade soybeans are Ford’s bread and butter. His company Stonebridge Ltd., headquartered in Cedar Falls, Iowa, is a major supplier of soybeans to Japan and the US, dedicated to “matching the perfect soybean to our customer’s needs.”

Focus on organic and non-GMO
Fluency in Japanese and familiarity with Japanese culture have certainly helped Ford establish a strong connection with his overseas client, which accounts for 45% of his market (another 45% is concentrated in the US, with 10% in Europe).

Stonebridge contracts with approximately 200 farmers in 13 US states and 22 cleaning facilities/growing areas. It sells to manufacturers, trading companies, and wholesalers who are constantly on the lookout for a better soybean. About 85% of the business is done by contract.

“Everything we do is done back to back,” Ford said. “We get orders first and then tell our farmers to start growing…contracting is done from December to April, harvest from September to November, and then we ship through October of the following year."

Approximately 25% of Stonebridge’s business is organic; the remaining 75% is identity preserved and non-GMO.

“Manufacturers want an organic product, so we found organic soybean farmers,” said Ford. “The market for organic products is increasing very dramatically, although the number of organic soybean farmers has decreased. It’s frustrating–the feed industry for poultry and cattle is soaking up the organic acres.”

In fact, Stonebridge gets a fair amount of its organic product from China, including meal for feed as well as food-grade soybeans. The company’s organic markets are mainly in the US with Europe and Japan’s demand for organic relatively small.

All of Stonebridge’s soy is non-GMO. “It’s market-driven,” Ford said. “The industry leans to non-GMO, especially in tofu, soymilk and food ingredients. However, although the future for soy looks terrific, and our business is growing nicely, customers may have to pay more for non-GMO soybeans. We need to pay farmers a premium for non-GMO.”

Started at Pioneer
Ford began his “soybean career” at Pioneer Hi-Bred, which was looking in 1993 for a Japanese-speaking employee to handle the food grade soybean program.

“Pioneer jump-started me in this business,” Ford recalled.

Two years with Pioneer led to four at another export company, and in 1999 he founded Stonebridge Ltd. The transition was easy, he says, because Pioneer had gotten out of food-grade soy and corn, so he had customers already lined up.

Ford initially tried to attract Japanese manufacturing companies but discovered most didn’t have the needed import/export experience, so he turned to the wholesale niche as well as major trading companies.

Anticipating and fine-tuning customers’ soy needs is a bit of a juggling act. “We look for protein, sugar levels, seed size and yields—certain soybeans only grow well in certain areas—so several “maturity zones” are used to get the quantities we need,” said Ford.

The lifetime of a soybean is about three to five years, before it’s time to look for a new one with better yields. “We’re looking all the time,” Ford said. “It takes 7-10 generations to develop a new variety, so we’re looking 2-3 years out in working with seed companies. I’d say we’re working with about 20 different varieties of beans at any one time.”

Weather challenges, rising transportation costs
What have been Stonebridge’s biggest challenges? Weather, especially year’s floods and tornadoes, in the Midwest has caused crop yield upheavals whose impact can’t be measured yet. “Soybeans have a way of healing themselves better than corn, though,” Ford said. “They’re hardy.”

Rising transportation costs are having an impact as well, in addition to a shortage of export containers and space on ships heading overseas.

“It’s global economics,” Ford explained. “There’s so much trade between the US and China, it’s more cost-efficient to send the containers back and forth from the West Coast rather than move them all the way to the Midwest. It’s a problem.”

But Stonebridge has some fairly unique advantages that Ford hopes will keep its business strong. “We don’t own any cleaning facilities, so we aren’t locked into growing in specific areas. That means we can avoid weather and pest-related issues and not count on any one local farming community. If we have quality issues, we can just go to a different farming area. We can move on a dime. From the customer’s perspective, that gives us more latitude and increases the likelihood that they’ll get a better product.”

And finally, being able to speak the language and navigate the culture gives Ford a marketing advantage over other contractors/exporters.

“I think it lends a level of trust in negotiating business deals,” he said. In a fluctuating economy with ever-changing client needs, that cultural connection could go a long way.

© Copyright The Organic & Non-GMO Report July/August 2008.