Soybean
The One Pager Business Plan for Soybean
The One Pager Business Plan (Soybean)
Presented in bite size and easy to understand language, The One Pager Business Plan highlights the basic insights and considerations that helps you to decide if and how to engage in agricultural ventures.
Soybean in The World
Soybean (Glycine max) holds a position of utmost significance among global crops, primarily cultivated for its oil and protein content. The current global yield stands at approximately 176.6 million tons of beans across an expansive cultivation area of 75.5 million hectares. While the crop is predominantly nurtured under rainfed conditions, the practice of irrigation, particularly supplemental irrigation, is experiencing a steady rise in adoption.
Soybean in Nigeria
In the year 2022, Nigeria's soybean meal production was approximated at 680 thousand metric tons. Throughout the period from 2010 to 2021, the soybean meal yield in the nation exhibited a consistent upward trend.
Producing Regions
| North Central | Niger, Benue, Kogi, Nasarawa, and Kwara |
| North West | All the states across the region |
| North East | All the states across the region |
| South West | Oyo, Osun, Ogun, Ekiti, and Ondo |
SWOT Analysis
Strength: Available base resources of land, labour and know-how.
Weakness: Challenges in securing finances for newcomers entering the industry.
Opportunity: A burgeoning market driven by a growing population and the expansion of food industrialization.
Threat: The influx of imported soybean derivatives and the inherent market volatility.
PESTLE Analysis
Political
Economic
Social
Technology
Legal
Environment
Technical Consideration
Soybean cultivation involves a maturation period of 3.5 to 5 months before it's ready for harvest. This process demands minimal intensive technical and agronomic oversight; however, it does require consistent and routine monitoring throughout its growth phases.
In Nigeria, farmers can achieve noteworthy yields ranging from 1.7 to 2.5 tons of soybeans per hectare during harvest. This level of success hinges on meticulous management and unwavering adherence to Good Agricultural Practices (GAP).
Adopting influential agricultural approaches such as globally recognized such as.
In Nigeria, farmers can achieve noteworthy yields ranging from 1.7 to 2.5 tons of soybeans per hectare during harvest. This level of success hinges on meticulous management and unwavering adherence to Good Agricultural Practices (GAP).
Adopting influential agricultural approaches such as globally recognized such as.
Use of high-quality planting materials
Precise application of fertilizers
Integrated approach of herbicides and pesticides
Appropriate spacing and optimal crop density
Proper harvest and Post-Harvest Handling
Operations
A medium holder farm can be managed with a lean operational framework of not more than 5 people, mostly contract with little overhead cost. Most administrative tools for such tasks as bookkeeping, project management and reporting can be sourced freely
Risk
North East, North West, North Central: Environmental risks in Soybean production in the north include climate variability (rainfall patterns and temperature) leading to poor yields, soil degradation, and security issues.
Mitigant
Medium ProbabilitySouth West: Possible pest and disease outbreaks could occur. This can in turn lead to loss of potential yield and increased cost.
Mitigant
Medium Probability
Generally, there is an average technical knowledge of the cultivation, field management, harvest and post-harvest of the value chain experience and expertise.
Mitigant
Low Probability
North East, North West, North Central: Low invasion of pest and outbreak of diseases.
Mitigant
Low ProbabilitySouth West: High pest invasion and outbreak of diseases.
Mitigant
High Probability
Lack of inadequate financial supports to the farmers when it is needed for cultivation.
Mitigant
Medium Probability
North Central: Concentration of local market and Processor (Minimal).
Mitigant
Medium ProbabilityNorth West, North East: Concentration of local market majorly.
Mitigant
Medium ProbabilitySouth West: Concentration of both local and Industrial/ commercial market.
Mitigant
Low Probability
North West, North East: Low price per ton / Negative price movement.
Medium ProbabilityNorth Central: Price per ton is usually the prevailing market average movement.
Low ProbabilitySouth West: High price per ton / Positive price movement
Mitigant
Medium ProbabilityEconomics of Production (July 2023)
| Assumptions | |
| Land Area to be cultivated | 1ha |
| Expected Yield (tons/ha) | 2.8 |
| Price per ton (₦ / ton) | 370,000 |
| Activities | Description | Qty/ha | Total Quantity | Unit Cost (₦) | Total Cost (₦) |
| Land Value / Land Preparation | Land lease or depreciation value | 1 | 1ha | 15,000 | 15,000 |
| Ploughing | 1 | 1ha | 38,000 | 38,000 | |
| Harrowing / Ridging | 1 | 1ha | 35,000 | 35,000 | |
| Inputs needed | Improved Seed | 25 | 25kg | 1,600 | 40,000 |
| Knapsack Sprayer | 1 | 1pc | 7,000 | 7,000 | |
| Pre-emergence | 2 | 2 litres | 4,000 | 8,000 | |
| Post-emergence (systemic) | 3 | 3 litres | 3,500 | 10,500 | |
| Pesticide | 4 | 4 litres | 3,500 | 14,000 | |
| NPK 15:15:15 | 4 | 1 bag | 24,000 | 24,000 | |
| UREA | 1 | 1 bag | 21,000 | 21,000 | |
| Murate of Potash | 2 | 2 bags | 21,000 | 42,000 | |
| Farm Service / Labour Requirement | Planting | 1 | 1ha | 18,000 | 18,000 |
| NPK application | 4 | 4 mandays | 2,000 | 8,000 | |
| MOP + UREA application | 4 | 4 mandays | 2,000 | 8,000 | |
| Spraying pre-emergence | 1 | 1ha | 10,000 | 10,000 | |
| Spraying post-emergence | 1 | 1ha | 10,000 | 10,000 | |
| Spraying Pesticide | 1 | 1ha | 10,000 | 10,000 | |
| Manual Weeding | 1 | 1ha | 20,000 | 20,000 | |
| Harvesters | Cutting | 1 | 1ha | 15,000 | 15,000 |
| Threshing and Bagging | 30 | 30 bags | 1,000 | 30,000 | |
| Harvest Logistics | 30 | 30 bags | 4,000 | 12,000 | |
| Others | Monitoring and Evaluation (Using Tellagri) | 1 | 1ha | 4,000 | 4,000 |
| Miscellaneous | 1 | 1ha | 5,000 | 5,000 | |
| Finance | Cost of Funds | 10% | 40,450 | ||
| Insurance | 3% | 12,135 | |||
| Grand Total | Total cost of cultivation | 40,450 | |||
| Expected yield | 3 | 3.0 | |||
| Cultivation cost per ton | 152,362 | ||||
| Market price per ton | 370,000 | ||||
| Expected Revenue | 1,036,000 |
| Margin / Ha | 578,915 |
| Margin / Ton | 192,971.67 |
| Total Revenue (TR) per ha | 1,036,000 |
| Margin per ha | 578,915 |
| Rate of Return on Investment (RRI) | 127% |
| Capital Turnover (CTO) | 56% |
Profitability of Production (July 2023)
| Parameters | South West | NE, NW, NC |
| Total cost of cultivation | 499,835 | 457,085 |
| Expected yield | 3.0 | 3.0 |
| Cultivation Cost / ton | 158,388 | 152,362 |
| Market Price / ton | 390,000 | 370,000 |
| Expected revenue | 975,000 | 1,036,000 |
| Margin / ha | 499,835 | 578,915 |
| Margin Per ton | 166,611 | 192,971.67 |
| Rate of Return on Investment (RRI) | 105% | 127% |
| Capital Turnover (CTO) | 51% | 56% |
Conclusion
In Nigeria, each geographical area possesses distinct characteristics and nuances concerning the Economics of Production (EOP) and profitability of the Soybean value chain. The table above illustrates that the potential net profit within the Soya value chain is most significant in the Northern regions of the country.
This phenomenon can be attributed to the presence of both local and industrial/commercial markets in these areas. The intense competition between these markets within these regions amplifies the demand for Soybean, consequently leading to an uptick in the price per ton.
