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Growers, Meet Your Biggest Customers | China’s Becoming More Affluent and Urbanized


Visiting a soybean field in China is a bit like visiting Mecca for U.S. farmers. The first domestication of the soybean plant dates back to northeastern China in the eleventh century B.C. The soybean was developed there as a source of high-protein food.

Three Iowa soybean farmers recently had the opportunity to meet farmers in China, and see their soybean crop for themselves.

During an Iowa Soybean Association (ISA) trade mission, the farmers visited northeastern China where most of the soybeans there are grown. Iowa farmers who were part of the trade team included Delbert Christensen, ISA past president, from near Audubon; Randy Van Kooten, ISA president, of Lynnville; and ISA’s Director of Market Development Grant Kimberley, who also farms near Bondurant.

Interestingly, the view from the airplane as it touched down in Harbin, China, wasn’t that different from landing at the Des Moines airport. Large cornfields extend as far as the eye could see, planted right up to the airport grounds.

If soybeans are the crop with such history for China, why is so much corn grown? And why, if China can grow soybeans, is that country the U.S.’s largest soybean customer?

Consider that China purchases roughly 25%of U.S. soybean exports. U.S. soybean exports to China this past marketing year exceeded 844 million bushels – astounding, considering China didn’t import any soybeans before 1996.

“Most of this demand is driven by soybean-meal demand,” says Xiaoping Zhang, deputy director of the American Soybean Association International Marketing in China. “Since 1990, Chinese soybean-meal consumption has increased 3,000%. More Chinese citizens with more money eat more meat, and this trend will continue for the foreseeable future.”

China’s population is not only growing, but becoming more urbanized. Soon, for the first time, half of China’s population will be urban, which impacts both production and demand.

Despite China’s size, its percentage of arable land is relatively small. Given the huge increase in demand, it’s no wonder that it now must rely on imported soybeans to meet demand.

In addition, about 60% of Chinese farmers save their seed, reducing yield capacity, says Zhang. And most multinational corporations hesitate to bring their best technology to China for fear of patent infringement. “While researchers and the government are improving yields, it’s not happening fast enough to meet Chinese demand,” adds Zhang.

Projected consumption growth

Iowa produces nearly as many soybeans as China. While Iowa’s soybean production averages 13.5 million metric tons (mmt), it’s estimated that China’s total soybean production is about 15 mmt, but has been as low as 12.5 mmt.

“The projected growth of soybean consumption here is remarkable, and we will need good partnerships with the Chinese to meet the needs of this country’s growing population,” says Christensen.

The trade team first visited the Heilongjiang province, which produces 33% of China’s soybeans. The farm visits in that province were a study in contrasts. From a visit to a 40,000-acre, state-owned farm to a 40-acre family farm, the scale was notably different, but the farmers’ pride in their operations was a common thread.

The State Farm Land Reclamation Bureau of Suihua MA Liuhe, a large-scale, state-owned farm. A demonstration farm for mechanization, the 40,000-acre farm supports about 600 households. The farm aims to become fully mechanized by 2012. Average soybean yields there are roughly 40-45 bu./acre; corn yields average approximately 140 bu./acre.

The second farm the ISA delegation visited was in the Dayong 4 village of the Hulan district, where the team met the woman who runs the 40-acre farm.

“The soybeans in this region have very consistent quality and seem to suffer little disease or insect pressure,” says Van Kooten.

Overall, the Iowa farmers were surprised by the quality of the soybeans they saw despite the fact that Chinese farmers don’t have access to U.S. soybean technology. “The plants are quite tall with a large number of pods, ranging from one to four beans per pod,” observes Van Kooten. “The varieties are determinant with more widely spaced nodes and differently shaped leaves, but the plants appear to be very healthy and should yield well.”

In the Jilin Province, the government encourages farmers to grow corn. The group saw soybeans grown in strips between corn crops, along road ditches and even in narrow dividers between rice fields.

While soybeans are a valuable crop in the Jilin Province, corn is king in that area. According to one of the guides, corn is called “jade rice” in that region. Again, the soybean fields ranged anywhere from a few acres to huge fields divided into strips, with a number of farmers growing their crops there cooperatively.

The Iowa farmers were surprised to learn that most farmers in that area bring their crops to the elevator at 30% moisture. Because they are guaranteed a price by the government and need the money, they hurry to deliver their crop and collect their payments.

“The scope and size of the market demand here is unbelievable,” says Kimberley. “It’s important to develop relationships to make sure the U.S. is the market of preference for Chinese buyers.”

While it was fascinating for the farmers to see soybean fields in China, they were clearly most impacted by the time spent with the farmers, their families and other villagers.

“This visit put our jobs in a whole new light,” says Van Kooten. “It’s important to remember where the crop is going, and that we’re feeding families here and across the globe.”  


February 2011

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