Lee occupies a unique position in the College of Agriculture and Life Sciences. He joined the College early in 2001 as its first marketing coordinator for value-added products. Since then, he has worked closely with the Grain Growers Cooperative, a group of farmers formed in 1999 to develop new crops in North Carolina and new markets for existing crops.

Among the projects Lee has been most involved in is trying to sell small-seeded soybeans used to make a food called natto to the Japanese. It is an effort that illustrates the complexities of developing new agricultural markets.

At first glance, it would appear that North Carolina farmers would be well-positioned to penetrate the market for natto soybeans. That’s because of the work of Dr. Tommy Carter, a U.S. Department of Agriculture soybean breeder stationed at N.C. State University. Carter has developed several soybean varieties suitable both for making natto and for growing in North Carolina.

Carter describes natto as the Japanese equivalent of grits, adding that natto is a sticky, brown substance made from fermented soybeans.

Natto is a regional food, Carter says, eaten primarily in Southern Japan. Southern Japanese will typically spread a little natto over rice for breakfast. Natto can be found in Asian markets in the United States and is served at the Disney World Hilton Hotel in California, which is visited by a large number of Japanese tourists.

“It would fit into Japan about like grits do here,” says Carter of natto.

Carter began working to develop small-seeded soybeans suited to North Carolina about a decade ago, after a soybean broker who visited Jim Wilder, executive director of the North Carolina Soybean Growers Association, asked about the availability of small-seeded soybean varieties. Wilder in turn asked Carter.

“Until then, we’d never thought of [breeding] small-seeded varieties,” Carter said.

Carter remembered that a soybean breeder at Virginia Tech University had showed him a small-seeded variety he had developed, thinking the beans might be used on salad bars in this country. Carter contacted the breeder, who had one bushel of the beans left in a freezer. The salad bar idea hadn’t worked out.

The Virginia Tech breeder sent that last bushel to Carter, and starting with that bushel, Carter developed a new variety called Vance, which was released to growers jointly by N.C. State and Virginia Tech.

Carter later developed a variety called Pearl, while in the last two years, he has released four more small-seeded varieties and a large-seeded variety suitable for making tofu. Of the four recently released small-seeded varieties, two, called N 7102 and N 7103, appear suitable for the natto market. The other two are susceptible to an unsightly blemish that Japanese buyers don’t like.

But developing varieties suitable for making natto may have been the easy part. Marketing is the hard part, according to Carter.

“It takes a determined and sustained effort to market to the Japanese,” says Carter.

Carter and Lee were part of a North Carolina delegation that visited Japan in July 2001 in an effort to build relationships with Japanese buyers. Wilder of the North Carolina Soybean Growers Association also was a member of the delegation, as were representatives of the North Carolina Department of Agriculture and Consumer Services and Grain Growers Cooperative. A similar delegation visited Japan in July 2000 before Lee joined the College.

As a result of those trips, Lee and the Grain Growers Cooperative arranged contracts to grow about 2,000 acres of natto soybeans in North Carolina in 2001. In 2002, 1,700 acres of the soybeans were grown. Lee says natto soybeans are typically cleaned over the winter and shipped to Japan in the spring the year after they are harvested.

Lee has experienced some difficulty in 2002 finding growers willing to contract to grow natto soybeans, which illustrates the difficulty of developing a market for the soybeans.

Japanese buyers will pay a premium price for natto soybeans, Lee says, but that doesn’t necessarily mean there are huge profits to be made growing the soybeans. To begin with, Japanese buyers will not purchase genetically modified soybeans, and sellers must certify that their product is not genetically modified.

Certification involves time-consuming cleaning of equipment if the equipment is used to produce genetically modified soybeans and expensive testing of the natto soybeans, both here and in Japan.

Lee points out that most farmers who contract to grow natto soybeans also grow conventional soybeans, and when it comes to conventional soybeans, growers increasingly favor Roundup Ready soybeans, which are genetically engineered to resist Roundup herbicide.

It’s much easier to grow Roundup Ready soybeans, Lee says, than it is to grow conventional soybeans, which explains the popularity among growers of Roundup Ready soybeans. Spraying Roundup on the soybeans early in the growing season is usually all it takes to control weeds. Controlling weeds in natto or conventional soybeans that aren’t Roundup Ready is more time-consuming and costly. At the same time, Roundup Ready soybean yields are often a little higher than yields for conventional soybeans.

The bottom line, Lee says, is that growers must invest more time and effort to grow natto soybeans with roughly the same return they get from conventional soybeans. Other crops can also pose a problem. In 2002, for example, cotton appeared to be more profitable than in past years, and Lee says some farmers who might otherwise have contracted to grow natto soybeans decided to grow cotton instead.

Yet natto soybeans do appear to be a realistic alternative crop for some North Carolina farmers, which undoubtedly is why Golden LEAF, the foundation that is distributing tobacco settlement funds for projects designed to help tobacco farmers, has funded the efforts of the Grain Growers Cooperative. The cooperative has purchased the exclusive right to sell seed of the natto varieties Carter developed, while Golden LEAF grants were used to purchase equipment needed to sort soybeans prior to shipment.

Arranging contracts for North Carolina farmers to produce natto soybeans is one of the cooperative’s first efforts, says Lee, because the soybeans are seen “as an early opportunity to generate revenue for the co-op.”

Carter and Lee agree that natto soybeans represent a niche market. Carter says Japan’s entire consumption amounts to only a couple of hundred thousand acres annually. But both also see potential for natto soybeans in North Carolina.

“Who’s to know what might spring out of it,” says Lee of the effort to sell soybeans in Japan.