Iowa Soybean Association (ISA) leaders spent the latter half of July in China, strengthening relationships with buyers and exploring new markets to help sell a potential record crop.
A common theme during ISA’s China Trade Mission, July 23-Aug. 1, was that demand from the world’s largest soybean buyer will continue to increase.
ISA participants included President Brian Kemp, who farms near Sibley; President Elect Tom Oswald, who farms near Cleghorn; CEO Kirk Leeds, Market Development Director Grant Kimberley and several soybean industry officials.
“Every time we go to China, or other countries, we’re meeting with new buyers and solidifying relationships with existing ones,” Kemp said. “It’s important for us to understand their culture and industries. By understanding Chinese buyers better, we can fulfill their needs.”
The ISA delegation received the latest information about soy demand and food policy from Chinese government and agriculture officials. They visited farms, processors and ports. The group traveled to the province of Inner Mongolia for the first time where they learned about the country’s burgeoning dairy industry and future needs for soybeans and soybean products, like bypass soybean meal.
“As far as soybeans, there’s lot of potential,” said Peter Mishek, president of Mishek Inc. & Associates, part of the trade mission staff.
Gov. Terry Branstad recently proclaimed August as Iowa Soybean Month. The designation recognizes soybean farmers for their contributions to the state’s economy and environmental stewardship.
Persistent work by ISA in the area of market development has increased profitability of soybean production in the state — the reason why the organization was formed 50 years ago. Agriculture and related businesses account for about one-quarter of Iowa’s $152.4 billion gross domestic product.
Oswald said trade missions definitely pay off.
“We spend a lot of time making people feel comfortable doing business with us and utilizing soybeans and soybean products sourced from Iowa,” he said. “Buyers know where to go for good quality.”
In mid-July, the U.S. Department of Agriculture projected national soybean production at a record 3.8 billion bushels, up 165 million from last year. U.S. soybean exports during the 2014/15 marketing year are projected at 1.675 billion bushels, a slight increase from the current year. About half will likely go to China.
Chinese soybean imports are expected to reach a record 68 million metric tons by the end of the current marketing year. Prominent Chinese government and agribusiness officials predict imports could reach 75 million metric tons next year and 80 to 85 million in five years.
“The reason for growth is our large population (1.3 billion) and we use more (soybean) oil than any other country. As the living standard has increased, we eat more meat. (Soybean) meal is used for livestock,” Lui Ren, director general of the foreign affair department for China’s State Association of Grain, said.
Kimberley said the blistering pace of Chinese soybean imports is slowing somewhat compared to recent years, but the nation’s economy remains strong and is growing.
“There will still be significant growth in soybean, feed and meat demand in China for at least another decade, if not more,” Kimberley said.