Planting Seeds Around the World:

Though it may be stating the obvious that export markets are incredibly important to soybean growers, and China is by far the largest market with 895 billion bushels of whole soybeans exported in 2011, what may not be as apparent is where the other half of the 1.6 billion bushels travels when it leaves the Midwest. 

While it may not be a close race, Mexico comes in second place in total exports. According to the U.S. Census Bureau, our neighbors to the south imported 124.3 million bushels of soybeans and 198,172 metric tons of soybean oil in the 2010-2011 market year. Mexico is also a top importer of U.S. soybean meal, with 1,493,651 metric tons.

“In the 2011 fiscal year, the Americas region accounted for 20 percent of the total U.S. soy exports on a soy-equivalent basis,” explains Francisco de la Torre, director of Latin America and the Caribbean for the United States Soybean Export Council (USSEC). “Of that 20 percent, Mexico represented 75 percent of the soybeans, 26 percent of the soybean oil and 29 percent of soybean meal exports.” 

The Mexican market is a $2 billion market for U.S. soybeans, oil and meal and a $400 million for value-added soy products, like soy protein concentrate, soy protein isolate and soy flour.

“With the value-added component, Mexico offers a very diverse export opportunity for the United States and helps to keep U.S. crushing and processing plants running,” de la Torre says.

For the most part, Asian countries continue to dominate the export market. Japan, Taiwan and Indonesia heavily contribute to the $21 billion soybean export industry, importing approximately 202 million bushels last year. 

Other emerging markets can be found in Europe and the Middle East. Spain imported 28.6 million bushels of soybeans, with Egypt closely trailing at 27.8 million bushels, with areas in Northwest Africa also becoming more visible.

“The Maghreb region has growing potential for U.S. soy products,” Mark Andersen, USSEC director for Europe/Maghreb region, says. “In Morocco, the United States currently has 100 percent market share in soybean meal, and soybean oil is preferred for human consumption. Tunisia looks to be a growing market for U.S. soybeans and the United States already has a 67 percent market share; full-fat soybean growth is also a promising market for Tunisia. 

“Algeria is currently the fourth largest U.S. soybean oil market, but there is growth potential and the country offers opportunities for soybean meal. Libya also has a possibility of becoming a U.S. soy market, due to recent political and economic changes.” 

According to John Lindblom, director of South Asia for USSEC, Vietnam is the fastest growing market for feed and animal production in South Asia, creating a large market for soybean meal. While the United States has competed with Indian and South American sources, which have historically been more competitive on prices and logistics, two recently opened crushing facilities in Vietnam will significantly shift the market from an imported meal market to an imported bean market, creating greater opportunity for the United States to compete.

“The Bunge facility is connected to the new Bunge/Itochu EGT export terminal in the Pacific Northwest,” Lindblom says. “Eventually a sizeable portion of beans for the Vietnam plant will be shipped from the Pacific Northwest facility. This will favorably affect Iowa as many of those beans will originate from western Iowa across to Nebraska.”

Soybean farmers and industry experts have never underestimated the importance of building and maintaining relationships with these important buyers, wherever they may be. Multiple times a year, farmer leaders head overseas for face-to-face meetings and trade teams, particularly from Asia, can often be found in famers’ fields at harvest time each year.

“Farmer leader trips abroad and foreign buyer trips to the United States serve three main purposes: building a customer relationship, creating a personalized image for the U.S. product and preference building,” Jim Sutter, CEO of USSEC, says. “When visiting U.S. farms, soy companies and processing plants, foreign buyers see firsthand the quality of the crop, the efficiency of the U.S. soy processing system and the sustainable practices being used, which also aids in building preference for the U.S. products. When it comes to preference, the trips play a very important role since business relationships have been established and the foreign buyers know about the U.S. soy industry in greater depth than could be achieved without the visits.”

Brian Kemp, Iowa Soybean Association (ISA) director and soybean farmer from Sibley, Iowa, has gone on four trade team missions with ISA, visiting Japan, Hungary, Turkey, the Philippines and Indonesia. Kemp agrees with the importance of building personal relationships with possible soybean buyers.

“It’s important for foreign buyers to know that U.S. producers will take the time to visit them in their own countries and many of them appreciate the opportunity to tour our operations when they visit the United States,” Kemp says. “If everything is equal, I feel they will purchase soybeans from those they have built the relationships with.”