When it came time for ZeaKal to expand to the United States, traditional markets didn’t make much sense. The New Zealand-based trait technology company had developed a soybean variety that offered up to 15% more oil, and increased protein by up to 3 percentage points without a yield drag or need for additional inputs.
“We had created something that really benefited every end user of that soy,” said Han Chen, cofounder and CEO of ZeaKal.
Originally looking to sell to a larger company, Chen found the major seed companies weren’t set up to monetize value-added traits and instead were participating in a market driven by scale and efficiency. “So, we set out to create an integrated supply chain that could really bring everything together,” he said.
Chen looked to decommoditize his product, focusing on value throughout the ecosystem.
What Is Decommoditization?
The Nebraska Farm Bureau defines decommoditization as “producers who work through contracts, local markets, and other avenues to produce a commodity with an attribute or quality to more directly supply a consumer demand.” In short, taking out the middleman between producer and consumer.
The rapid increase in productivity of crops, such as corn and soybeans, has meant traditional commodity markets often require low-cost production for growers to see profits. The growing trend toward decommoditization offers new opportunities to grow high-value crops for hyperspecific markets.
“It really comes down to differentiating your product from someone else,” said Stephen Nicholson, Rabobank’s global sector strategist for grains and oilseeds.
Meredith Operations Corp.
Finding Opportunities to Decommoditize
A whole host of industries offers contracts for specialized crop production. Non-GMO crops, specialized crops for livestock feed ingredients (e.g. high-oleic soybeans), and low-carbon crops are just a few examples.
However, finding those opportunities may take time. The added value of specialized crops often results from low supply, meaning those already involved in contracts may be reluctant to share information with those looking to get started.
“If you get a lot of people involved in a product, then you tend to drive down the price,” Nicholson said. “So, finding those opportunities may be difficult.”
As with any contract, careful consideration of requirements should be made before signing. Look for specifications such as management expectations, storage requirements, and delivery points.
“The most important thing is to understand who your buyer is,” Nicholson said. “Make sure the buyer is legitimate, has the financial wherewithal to pay you, and is committed to the product.”
Making the Switch
While all contracts are different, most farmers participating in decommoditized programs can expect more intense management needs.
“We’ve made corn and soybeans almost foolproof to produce,” Nicholson said. “When you get into a decommoditized or specialty crop, you’re likely going to have to commit more management resources.”
Contracts may require specific planting or harvest dates, as well as check-in periods to evaluate crop performance throughout the growing season. Contracts may also specify how pesticides and other inputs are managed.
Matthew Chapman, who grows Pioneer-branded high-oleic soybeans in east-central Indiana, said he has found success by planning farther in advance. “Our mistake that first year is we didn’t decide until December to try the high-oleic beans,” he said. “We should have started in the fall, right after corn harvest. Trying to plan a season and a half ahead has made a big difference.”
Additional steps, such as fall-applied herbicides, may be necessary for effective pest control.
Challenges, such as weather, can impact crop performance and quality. Be sure to understand quality specifications the contract outlines, and have a Plan B in case of shortcomings, Nicholson said.
Peers and the local Extension may have the experience to help with the shift in management. Robust programs often have agronomists on staff to help with planning and unexpected challenges.
“Don’t be afraid to ask for help, particularly in the first couple [of] seasons you’re doing a brand-new crop for your farm,” Nicholson said.
The Benefit
Decommoditized programs offer new ways to increase profits by offering premiums for high-value crops with low supply.
“I think a lot of growers feel like there’s only two tools for them to become more profitable,” ZeaKal’s Chen said. “They either need more land to increase their operations, or they need to play a riskier game of financial leverage by playing the market.”
Chen said neither option addresses the problem at hand, as more grain entering the commodity market ultimately depresses prices further. Instead, Chen said his company is working to build an integrated supply chain, providing support throughout the growing seasons, as well as more stable end profits.
“We want an end market with predictability that’s not directly tied to commodity markets,” he said. “It’s going to be somewhat hedged, and they [farmers] can participate in a kind of diversified revenue stream as a result.”
ZeaKal has partnered with companies such as Perdue Agribusiness, Nutrien Ag Solutions, and Gro Alliance to create high-value local grain markets. The program is to start in the Delmarva region encompassing parts of Delaware, Maryland, and Virginia. Participants buy seed directly from ZeaKal, deliver harvested soybeans to a local Perdue elevator, and receive premiums tied to improved oil composition.
Premiums vary among crops and year to year. Soybean grower Chapman said he saw premiums for high-oleic soybeans drop from $2.20 in 2023 to $1.75 in 2025, although he added he’s hopeful profits will stabilize as the program develops.
“As the market matures, we’re constantly finding new uses for the high-oleic beans and external benefits we didn’t originally intend,” Chapman said.
Products Set Apart
While specialty products may be more expensive for the end buyer, their value distinguishes them from lower-cost alternatives. The dairy industry, for example, has seen greater milk fat concentrations from cows fed high-oleic soybeans. Analysis published in the Journal of Dairy Science found that a 2,000-pound dairy cow could see an additional $130,000 a year when substituting high-oleic soybeans in her feed ration.
“We’re seeing a big change in our annual costs,” said Brian Preston, a southern Michigan dairy farmer who said high-oleic soybeans are now part of his feed rations. “Our feed costs are going down, and our milk income is going up.”
Higher-value products also set producers apart from their counterparts and elevate them within the market.
“I don’t want to be the cheapest producer in the world,” Chapman said. “That’s a race to the bottom. … I want to produce the best value, the most protein, and the best logistics in the world to keep our customers happy.”
Other Forms of Decommoditization
While growing specialty varieties of standard crops is the most common form of decommoditizing production, other options are available. Adding something completely new to the rotation can offer a diversified income stream.
Steve Nicholson, Rabobank global sector strategist for grains and oilseed, said he believes Midwest farmers could learn from regions known for fruit and vegetable production such as California. “The problem [in those regions] is water supply,” he said. “In the Corn Belt, we have plenty of water. Obviously, the weather isn’t as attractive, and we couldn’t produce year-round, but we have the root soils and the water. Could we produce those crops other places can’t produce any longer?”
Farmers have experimented with crops such as canola, hay, and pumpkins in the past. Programs offering premiums for production changes, such as low-till or reduced fertilizer applications, have also become popular.
“I grew up in Iowa, and we always joke about raising four crops: corn, soybeans, corn, soybeans,” Nicholson said. “What can we do differently to change that rotation?”