Organizations representing U.S. soybean producers are pledging to fight for greater access to export markets in China, the European Union and in any country willing to pay a premium for a better soybean.
“The U.S. soybean industry can't walk away from countries just because they present a challenge,” said Corwin Fee, Knoxville, Iowa, soybean farmer and trade policy and international affairs chair with the American Soybean Association.
“Forty-seven percent of our soybeans are exported. We are committed to defend the major markets that are important to us. At the same time, we're are focusing on other markets.”
“U.S. soybean farmers are at a crossroads,” added Jerry Slocum, United Soybean Board international marketing chairman and soybean producer from Coldwater, Miss. “We need to discover where the premium markets are in the world for soybeans and soybean products.”
Slocum, speaking during a recent media teleconference, added, “We need to make sure we gain the larger share of those markets. We have to concentrate on the countries that will pay the most for the product.”
Both Slocum and Fee cited growing competition from South American soybean production and GMO issues in China as major factors in stepping up the fight for market access. Here's a summary of ASA/USB efforts to promote soybeans.
CHINA — According to Phil Laney, ASA regional director for China, the country's trade polices are confused and at time contradictory to its own objectives.
“The Chinese GMO regulations are very unlike the GMO regulations that we have in Europe, which came from a consumer movement,” Laney explained. “These regulations were implemented by the Chinese government specifically to control soy imports and get a better price for its own soybean crop.
“But Chinese domestic production provides only 60 percent of its total needs. China is going to have to import 10 million to 12 million tons of soybeans a year. Otherwise, its crushing industry will shut down and its edible oil supply and feed industry will be greatly deficient.
“I believe pressure from our government and Chinese crushers is going to force them to open the import door for soybeans.”
While China is the most cost-conscious of trade partners, “we have large customers who are willing to pay a premium for them,” Laney said. “It's hard to put a value on it, perhaps $5 to $7 a ton or more, but part of that is the quality advantage they perceive in the U.S. bean.”
China is now the world's largest soybean importer and the largest U.S. soybean customer. Last year, it imported 210 million bushels in U.S. soybeans. In the current year, China's already imported 110 million U.S. bushels with another 28 million bushels in sales on the books.
SOUTHEAST ASIA — The Philippines are a big customer for prized U.S. soybean meal, noted ASA regional director John Lindblom.
“One reason the market has been so steady is our efforts to differentiate the U.S. product from competitive products. We've done a lot of feeding studies for cattle, pigs, chickens and even aquaculture, to show the attributes of U.S. soybean meal which set it apart from non-U.S. soybean products in regard to the performance of the animal and profitability of the net user.
“We can create a premium that people are willing to pay for the U.S. soybean meal over competitive soybean meals.”
MIDDLE EAST — The question many people have been asking Chris Andrew, ASA regional director for the Middle East is to what extent the events of Sept. 11 have affected U.S. soybean exports here.
Surprisingly export sales are up 50 percent over last year in U.S. beans, oil and meal purchases. However, “I don't think there's been any cause or effect at all from Sept. 11.”
Andrew said that ASA efforts have raised quality consciousness in the region “quite a bit. The more sophisticated companies tend to buy only U.S. meal. They're capable of capturing the value-added benefit in their feeds and they realize they can produce a better-quality feed if they pay for better U.S. quality up-front.”
CARIBBEAN REGION — According to ASA regional director Kent Nelson, “After Hurricane Michele damaged crops in Cuba, the United States sent 2.3 million bushels of soybean equivalents into the country, a $30 million sale.
“Cuba is the wild card. It could easily buy 250,000 to 300,000 metric tons of soybean meal each year, which would put in the top five in the world for soybean meal.
“Cuba has indicated that it wants more soybean meal from the United States although it wants a little more freedom from current financial constraints imposed by the United States. But the opportunities are clearly there.”
MEXICO — “There are advantages to trading with a country so close because we have very inexpensive freight costs compared to our competitors,” said the ASA's Mark Andersen. “NAFTA has also brought import duties down dramatically. Beginning in 2003, there will be zero duty, not only on soybean/soybean meal but also on finished products.
“Mexico perceives that the United States has the best soybean and the best meal and it remains a significant market for us,” he said.
EUROPEAN UNION — Exports to the European Union are up this year by about 14 million to 15 million bushels, despite problems with devaluations in the European currency, the Euro. “We have benefited from the EU's regulatory stance to ban meat, animal fats, fish meal and bone meal from all livestock rations,” said Dieter Kundrun, ASA regional director for northern Europe.
And EU's soybean processing industry seems to be unconcerned about the consumer movement against GMO products.
“The EU is importing record amounts of biotech soybeans at this time,” he said. “Two-thirds of the U.S. beans that go there are Roundup Ready. Ninety percent of the Argentine beans that go there are Roundup Ready. The trade said about 20 percent of the Brazilian beans that go there are Roundup Ready.
“We're told the consumer doesn't want them, yet the trade keeps buying Roundup Ready beans and putting them into their foodstuffs. There's less than truthful labeling in Europe. That's no secret. We will continue to fight to make sure that the EU market stays open to biotech crops.”
RUSSIA AND THE FORMER SOVIET UNION — “Russia continues its economic reforms, economic indicators are improving and there are hopes of joining the WTO in the next year or two,” said Michael Modich, ASA representative for Russia.
“Soy oil is the number one imported vegetable oil. In 1997, only 7 percent of all vegetable oil imported by Russia was soy. Last year, it was about 45 percent. About 80 percent of the oil is coming from Europe. Of course a lot of that is processed with U.S. beans.
“In the last three years, Russia has invested $200 million in oil processing,” Modich noted.
INDIA — “When ASA opened an office in India five years ago, the country was exporting 2 million to 2.5 million metric tons of soybean meal to Southeast Asia and in direct competition with the United States,” said Virgil Nedema, ASA regional director for the country. “That figure is going down.”
“The message we're trying to get across to India on the food side is that there is a protein deficiency among the lower segment of the population that can be addressed by providing better quality vegetable protein (from U.S. soybean producers.”
In addition, “there is a shortage of good protein for the poultry, dairy and aquaculture industries. We're getting the message across. Consumption of soybean meal has increased 100 percent in the years we've been working there. In another three to four years, India will be out of the business of exporting soybean meal.”
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