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Taiwan buyers sign on to buy $1.56 billion in U.S. soybeans


DES MOINES, Iowa — Members of the Taiwan Agricultural Trade Goodwill Mission have signed a letter of intent to purchase U.S. soybeans worth $1.56 billion, in an Oct. 1 signing ceremony at the Iowa Capitol.

“Taiwan is a valued, long-term trading partner and I appreciate this delegation coming to Iowa to demonstrate their intent to make significant purchases of U.S. soybeans over the next year,” said Iowa Agriculture Secretary Mike Naig.

Along with Lt. Gov. Adam Gregg, the Iowa Soybean Assoc. (ISA) and the Iowa Economic Development Authority (IEDA), Naig welcomed the delegation, noting the long-term trade relations between Taiwan and the United States.

“Today’s signing is welcome news for Iowa farmers in the midst of harvest,” he added. “It is critically important that we work to continue building markets and expanding export opportunities for our state’s farmers and businesses.”

Tim Bardole, ISA president-elect, signed the letter of intent with Taiwan Vegetable Oil Manufacturers Assoc. Chair Yau-Kuen Hung to buy between 118 million-144 million bushels of soybeans during the current marketing year.

Iowa’s soybean production is projected at a record 590.4 million bushels. “As the sixth-largest export market for U.S. soybeans valued at $586 million in 2017, Taiwan remains an important trade market for Iowa and the U.S.,” said Debi Durham, IEDA director.

The IEDA’s International Trade Office leads multiple trade missions throughout the year worldwide, including to Taiwan. These are aimed at expanding existing and emerging markets for Iowa products and identifying foreign-direct investment opportunities in the state.

According to the IEDA, Taiwan is Iowa’s 13th-largest trading partner, with exports estimated at $170 million in manufactured and value-added goods in 2017. In the first half of 2018 alone, Iowa exports to Taiwan increased 46 percent when compared to the previous year.

Iowa ranks second nationally in soybean production. If realized, 2018 would be Iowa’s largest production on record (24 million bushels more than the previous record of 566 million set in 2016).

Bardole said Taiwan’s commitment to increase soybean purchases by 22 million to 37 million bushels this marketing year – nearly the equivalent of northeastern Iowa’s production – couldn’t have come at a better time. Exports to China, the world’s largest buyer, have essentially ceased after the country placed a 25 percent tariff on U.S. soybean imports and other products in retaliation for U.S. duties on Chinese goods.

He said it’s crucial to increase U.S. soybean market share with existing customers and find new ones to move the huge crop.

“It’s been a rough six months as a soybean producer,” said Bardole, a Rippey, Iowa, farmer. “To be able to sign an agreement with Taiwan, which is pledging to buy additional soybeans nearly equal to a crop reporting district, is truly an honor.

“Trade is so important, given how much we produce. The sales will be reflected in lower ending stocks and hopefully better prices ahead.”

According to the U.S. Soybean Export Council (USSEC), impending purchases will boost U.S. market share in Taiwan to nearly 90 percent, with the value of the increased soybean purchases estimated at $216 million-$360 million.

Hung said buying more U.S. soy is a way to solidify an already strong relationship between the countries and secure an excellent protein source for Taiwanese consumers at a great price.

“We came to Iowa because it’s such a great state and a stable producer of high-quality soybeans,” he said. “The price is quite competitive now.”

Since 1998, Taiwan has participated in 11 missions to the U.S., which has resulted in about 1.2 billion bushels of soybean sales worth an estimated $12.5 billion. The small island nation, with a population of just over 23 million, imported nearly $3.7 billion worth of U.S. farm products in 2017, the ISA said.

About a quarter of the size of Iowa in landmass, Taiwan is the sixth-largest market for U.S. soybeans and the seventh-largest for U.S. agricultural products.

U.S. Rep. Steve King (R-Iowa) accompanied the Taiwanese trade mission team on farm visits, and expects the country to follow through on their purchase commitments. “I’m convinced they won’t fall one bushel short, which is significant to Iowa farmers,” he said.

The delegation’s itinerary also included visits to New York, Washington, D.C., and Minnesota.