U.S. Soy Inks $100 Million Deal with China
- General News
The U.S. soy industry signed a purchase agreement on June 5 to sell 200,000 metric tons of soybeans to China. The deal is worth an estimated $100 million and will result in four Panamax ships full of soybeans setting sail from the United States to China during the next marketing year.
USSEC and the Iowa Soybean Association (ISA) hosted the Chinese delegation in Des Moines, Iowa on June 4 and 5. USSEC CEO Jim Sutter gave opening remarks at the signing ceremony, which was held at the Iowa State Capitol. Iowa soybean farmer Laura Foell, Secretary of USSEC Board of Directors and United Soybean Board (USB) Director, expressed appreciation to the Chinese team for their business and noted that one out of every four rows of U.S. soybeans is exported to China.
ISA President Brian Kemp, who farms near Sibley, signed the memorandum of understanding on behalf of the association and its 11,400 members, saying the agreement forges a relationship of cooperation and transparency. “China is our No. 1 customer. With that partnership comes a responsibility,” he said. “For soybean farmers, that responsibility is to grow a high-quality, reliable supply of soybeans while caring for soil and water quality. We’re dedicated to continuous improvement.”
The contract between grain traders in the United States and China is for soybeans planted this spring and for delivery after the harvest. Grant Kimberley, ISA market development director and central Iowa farmer, said the soybean purchase agreement and ceremony at this time of year is significant. Such deals are typically signed in the fall and are larger. "Any signing this time of the year is still important since it is well in advance of harvest and it demonstrates the demand in China remains strong as they try to secure supplies early," he said.
Soybeans are the leading farm export in the U.S. and U.S. soybean farmers exported a record 1.58 billion bushels in 2013, valued at nearly $28 billion. With four months left in the current marketing year, soybean exports are on pace to set a new record. The major reason for such growth is the demand for more protein from China’s growing middle class. Chinese pork production is up 39 percent since 2000, and soybean meal is needed to feed hogs.