Chinese buyers agreed to purchase more than $5 billion worth of soybeans today leading up to a historic Iowa agricultural trade mission to the country next week.
About two dozen contracts were signed by some of China’s largest processors to buy 460.3 million bushels of U.S. soybeans – or roughly 80 percent of last year’s record Iowa soybean production. The signing ceremony, co-sponsored by the Iowa Soybean Association, occurred during the 2017 Global Agricultural Commodity Industry Summit at the Des Moines Embassy Club.
ISA Board member Jeff Jorgenson of Sidney said the big soybean buy is a good sign China will continue to be the dominant buyer worldwide. He’ll join Iowa Gov. Kim Reynolds and more than 20 other state agricultural leaders during a trade mission to China July 19-28 to boost demand for Iowa-grown grains, meat, milk and eggs.
“China is such an incredible market for us,” said Jorgenson, a soybean, corn and livestock producer. “I’m looking forward to representing Iowa agriculture and telling more buyers and officials that we’ll continue to be a supplier of quality, sustainable soybeans and other ag products.”
In addition to a near-record one-time purchase of U.S. soybeans — the all-time high was 484.2 million bushels in 2015 — China agreed to buy 371 million tons of pork and beef during the summit. China recently lifted its ban of U.S. beef after the Mad Cow score more than a decade ago.
Whether whole soybeans arrive by boat or in the form of red meat in China, ISA Board member April Hemmes of Hampton said helping feed the nation of 1.4 billion people benefits Iowa farmers.
The government projects a record 2.1 billion bushels of soybeans will be exported this year; more than 1 billion to China. Sixty million bushels of soybeans were exported via red meats in 2016, officials said.
“That’s very important to us,” said Hemmes, who recently returned from a trade mission to China with the United Soybean Board. “China is urbanizing and its citizens are becoming more affluent. They want more protein, and that means more soybeans.”
Wang Yunchao, general manager of COFCO Oils & Fats Western Specialization Platform, said protein and vegetable oil consumption in China is rising at a fast pace. COFCO (China Oilseed & Feed Corporation) is the nation’s largest soybean processor and signed several purchase agreements today.
China imported a little more than 3 billion bushels of soybeans in 2016, Yunchao said. He expects imports to hit 3.3 billion bushels next year.
“Consumption of protein is growing,” Yunchao said. “I’m optimistic it will continue.”
Iowa Lt. Gov. Adam Gregg said Iowa has cultivated a 30-plus-year friendship with China, which is now the state’s fifth-largest export market. It was spearheaded by former Gov. Terry Branstad, now trade ambassador to China, and will continue to be cultivated by Gov. Reynolds and the current administration, he said.
“I have no doubt the contracts (signed today) will enhance the partnership between our people for mutual benefit,” Gregg said.