DeLong sends genetically unmodified soybeans overseas

By TOM DAYKIN

Milwaukee Journal Sentinel - Wisconsin

Posted: Sept. 25, 2008

Clinton - The fields of soybeans around this small southern Wisconsin village blur into the landscape for drivers whizzing past on nearby I-43.

But many of those beans are carefully grown, harvested and packaged to ensure they don't come into contact with genetically modified seeds. Such care makes them more valuable to food companies in Japan and other Asian countries.

The result is a Wisconsin export with added value. The DeLong Co., based in Clinton, plays an important role by linking farmers with companies that process soybeans into tofu and other foods.

"It gives us a premium," President David DeLong said of the conventional, unmodified soybeans.

The company sells seed, fertilizer and supplies to farmers, and it buys their soybeans and corn before selling the grains to food processors. DeLong Co. also provides trucking services to the agriculture industry and is a wholesale distributor of pet food, livestock feed and other products.

The company, in its fourth generation of DeLong family ownership, has 250 employees, including about 110 employees at its headquarters and grain elevator in Clinton, about 10 miles east of Beloit. It has $508 million in annual sales, giving it a spot on the Wisconsin 75, a list of the state's largest privately held companies compiled yearly by Deloitte & Touche.

DeLong Co. buys corn and soybeans from farmers throughout the Midwest. It operates 10 grain elevators, where corn and beans are stored and packaged before being shipped to the company's customers. The elevators are in Wisconsin, Illinois and Ohio, including four facilities that DeLong Co. bought this year in northern Illinois.

Some grain purchased by DeLong Co. is used for livestock feed. But the more profitable crops are those that are processed into foods consumed by humans.

At the top of this food pyramid are soybeans that are not genetically modified.

No trace left behind

Companies such as Mitsui & Co., which operates a large Japanese food processor, cater to customers who don't want foods tied to genetically modified organisms. Those companies are responding to concerns raised by consumers about so-called GMO foods, even though they've gained approval from U.S. regulatory agencies.

To meet those demands, DeLong Co. works with farmers to make sure their fields are cleared of genetically modified soybeans before a crop is planted.

"The key there is to make sure the seed is pure when it's planted," DeLong said.

The machines used to harvest the soybeans, and the augers at the grain elevators used to help sort and package the beans, also must be completely cleaned of any earlier exposure to genetically modified crops, he said.

The companies buying the soybeans have tests that can detect GMO traces, and even the smallest amount can lead to a spurned shipment, DeLong said.

DeLong Co.'s employees are extensively trained in those cleanup procedures. Those are necessary steps to make sure the non-GMO crops command higher prices that buyers are willing to pay, he said.

Genetically modified foods have been certified as safe by the U.S. Food and Drug Administration. But some consumers, particularly those in foreign countries, harbor suspicions about such foods, said Brad Barham, a University of Wisconsin-Madison professor of agriculture and applied economics.

The best available scientific research "doesn't validate those concerns," Barham said. But they still drive buying decisions.

"Perception matters in marketing," Barham said.

Global markets

DeLong Co. ships 80% of its grain overseas. The company first began exporting grain about 25 years ago to diversify its customer base.

The proportion of overseas grain shipments grew gradually for several years, with demand increasing substantially five years ago after the U.S. dollar declined in value compared with foreign currencies. A weaker dollar makes U.S.-produced goods cheaper for foreign buyers, which helps stimulate overseas sales.

Also, global soybean demand has been rising rapidly since 2000. The driving forces are an increasing world population, economic development in China, and a reduction in U.S. soybean production as more farmland is devoted to corn sold for ethanol, according to Mitsui & Co.

DeLong Co.'s dependence on global markets takes it a long way from its late-19th century origins. The business started in Clinton by selling supplies to local farmers and gradually expanded to other communities. In Wisconsin, DeLong Co. operates grain elevators in Darien, Janesville and Evansville.

Continued growth in U.S. farm exports are a key to the company's future, DeLong said.

Meanwhile, DeLong Co. has put tiny Clinton on the global trade scene. Foreign customers frequently fly into Chicago's O'Hare International Airport and make the 90-minute drive to small-town Wisconsin and its surrounding countryside.

Farmer Case Metcalf, who grows soybeans for DeLong Co., has hosted some of those Asian customers at his Rock County farm.

"They like to see where their food comes from," Metcalf said. "I've never seen anyone come from Milwaukee to see where their beans come from."

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