Maintaining strong agricultural trade relations with China is a priority for the Iowa Soybean Association and the purpose of an ISA delegation’s visit to the country of 1.4 billion people March 16-25.

Led by ISA President Bill Shipley of Nodaway and President-elect Lindsay Greiner of Keota, the delegation is meeting with U.S. Ambassador Terry Branstad at the U.S. Embassy in China, and with key Chinese officials representing soybean processors and feed companies.

“China consumes 60% of global soybean production, and Iowa farmers are a key supplier,” Shipley says. “With U.S. commodity prices sliding and other countries ramping up production, this is precisely the wrong time for the U.S. to retreat as a trusted source of high-quality soybeans.”  

Tariff on steel imports could spur retaliation
While preparations for the visit began last year, the timing of this month’s discussions is opportune. Farmers are increasingly concerned about trade disruptions between the U.S. and China caused by steep tariffs on steel and aluminum imports. President Donald Trump announced the tariffs in early March: a 25% tariff on steel imports and 10% on aluminum.

The White House is also considering putting tariffs on imports of Chinese technology and telecommunications resulting from a “Section 301” intellectual property investigation.

ISA and other farm and commodity organizations are worried about potential retaliation from China and other countries. “U.S. exports of ag products, including soybeans, are likely to be targeted in potential retaliatory measures by China and other nations,” Shipley says.

1 in 4 rows of Iowa beans go to China
Last year, Iowa’s 42,000 soybean farmers produced 562 million bushels of the oilseed. The crop is valued at more than $5 billion. Nearly one of every four rows of soybeans grown in Iowa is destined for China. Nationally, U.S. soybean exports to China totaled 1.3 billion bushels in 2017 valued at $12.4 billion.

 “China, which wasn’t even in the market for soybeans 16 years ago, is now our largest customer, purchasing more soybeans than all others combined,” Shipley notes. “Iowa soybean farmers, with support of their association and investment of the soybean checkoff, have developed strong relationships with Chinese soybean buyers, industry representatives and the Chinese government.

“We are committed to maintaining such relationships while navigating these unsettled times,” he says. “Our time in China offers the opportunity for us to share this important message personally.”

Tariffs on steel imports will hurt ag
Imposing tariffs on steel and aluminum may help U.S. steel workers and the steel industry, but the potential damage to the overall economy might be greater, says ISA Chief Executive Kirk Leeds, a participant in the Iowa delegation visiting China. “Unfortunately, given the importance of exports to U.S. farmers and the overall farm economy, ag trade is often the first casualty in any trade war or retaliation.”

ISA continues to work with Iowa’s congressional delegation in communicating concerns about the way tariffs are being proposed and their potential impact on soybean farmers and U.S. agriculture.

“It’s clear underlying challenges remain in overall trade relations between China and the U.S., and for that matter between trading partners around the world,” Leeds adds. “The best strategy for maintaining strong trade relations between China and the U.S. is to make sure that both sides continue to fully engage in conversation, negotiations and open dialogue. That’s what we do during our time in China.”

Iowa farmers are optimistic that U.S. and Chinese government officials will expand, not restrict, trade in the future.  “We excel in producing high-quality grain and meat, important staples for a Chinese population that is increasing and becoming more affluent,” Leeds says. “The best option is to keep trade flowing.”

For more information, visit iasoybeans.com.

Source: Iowa Soybean Association

Soybean production and consumption: Iowa, U.S. and China

Important facts about Iowa soybean production and Chinese soybean consumption include values and population trends.

• Iowa farmers produced 562 million bushels of soybeans in 2017; the per-acre average was 56.5 bushels.

• Iowa farmers account for 12.7% of the nation’s annual soybean production. Farmers in the U.S. produced 4.4 billion bushels of soybeans in 2017 with an average per-acre production of 49.1 bushels.

• The value of Iowa’s soybean crop exceeds $5 billion; nearly 42,000 Iowa farmers grow soybeans.

• Soybean production in Iowa brings together several major sectors including seed, equipment, processing, and livestock and poultry production.

• Market analysts forecast the number of acres planted to soybeans in Iowa and the U.S. in 2018 could surpass corn for the first time in nearly 35 years.

• Nearly one out of every three rows of U.S. soybeans go to China. Iowa and Illinois are the top two producers.

• U.S. ag exports were valued at $140.5 billion in fiscal year 2017. Soybeans accounted for about 17% of the total, or $24 billion.

• China, which wasn’t in the market for soybeans 17 years ago, is now the largest buyer of U.S. soybeans. Nearly 2.2 billion bushels of U.S. soybeans were exported in 2016-17, says USDA. More than 1.33 billion bushels were sold to China, the U.S.’ top export customer, or roughly 32% of U.S. production. U.S. soybean exports to China in 2017 were valued at almost $15 billion, up from $14.2 billion in 2016-17.

• China is home to 10% of the world’s arable land and 18% of global population (more than 1.4 billion people). It’s estimated that 300 million to 400 million Chinese will join that nation’s middle class in the next decade, a number equal to the population of the U.S. This growing affluence will increase demand for protein, as 60% of China’s population is urban (839 million).

• China is an important and growing market for Iowa farmers. Whole soybeans arrive by boat or in the form of red meat in China, helping feed the nation of more than 1.4 billion people.

• Soybeans are crushed into soybean meal in China to feed its 730 million pigs; Chickens are the second largest consumer of meal. China is the world’s No. 1 egg producer. Soybean oil is also needed for cooking in China.

• Nearly one of every five rows of soybeans grown in Iowa is fed to the more than 38 million pigs raised annually in Iowa (or almost 116 million bushels). Every pig raised in Iowa (about 20 million at any one time) eat about 138.5 pounds of soybean meal. Roughly, there are 48 pounds of soybean meal per bushel of beans.