By DOUG GRAVES
CHESTERFIELD, Mo. – Stay-at-home orders didn’t slow interest in the U.S. Soybean Export Council’s two-day global conference as 2,000 global customers from nearly 100 countries joined digitally.
This two-day event, The U.S. Soy Connection: Global Digital Conference and Situation Report, highlighted to international customers the strength of U.S. soybean farmers and the soybean value chain.
“U.S. Soy remains open for business despite uncertainty due to the novel COVID-19 virus,” said Jim Sutter, CEO of the U.S. Soybean Export Council (USSEC). “USSEC has swiftly adapted to the current circumstances and evolved our focus to connect with customers virtually and demonstrated that our entire supply chain is working to ensure a sustainable, safe and reliable supply of soy for global customers.”
As we continue to navigate these unprecedented times, it’s more important than ever that we demonstrate to current and potential international customers the strength of our farmers and the benefits of buying U.S. soy.”
Monte Peterson, USSED chairman and a North Dakota farmer, gave a farmer’s perspective on producing soybeans during this pandemic dilemma.
“It’s business as usual,” Peterson said. “Obviously, agriculture has been under some uncertainty probably for the last few years, but this is something completely new and is an uncertain time. What has lent to the success for U.S. soy has been our ability to engage and put together relationships with our trading partners around the world. Collectively, farmers and the exporters create a wonderful opportunity to be able to supply the global industry.”
Trade regions was a key topic. Brent Babb, USSEC regional director (Greater Europe and Middle East) and Roz Leeck, USSEC senior director, regional director (North Asia Region) provided insight into those soybean markets.
“The overall demand situation in Japan and South Korea is largely unchanged from last year,” Leeck said. “We haven’t seen any significant demand destruction, and Japan is right on target year after year. South Korea is down a little bit, and that’s a result of very inexpensive Brazilian soybeans that are competing with us a little bit more.”
According to Leeck, the soybean oil sector in Japan and South Korea is struggling due to reduced use in the hotel, restaurant and industrial use sectors. He estimates a five to 10 percent decline in use in both countries as a result of COVID-19. Leeck added that the U.S. has more than 70 percent market share with those nations combined.
Another item key to the two-day conference was that of diet change. Babb says consumers in his trade region are turning more toward poultry, pork and eggs for their diets, “and that’s also good for soybean demand,” Babb said.
“The supply chain in working. Of course, there’s some anxiety about ports and suppliers maintaining good working order, but so far they have with minor exceptions here and there. It’s been a very busy time for the feed industry and supplies have been OK. The feed industry has actually increased from earlier in the year, especially in animal agriculture as poultry, eggs and pork in Europe have continued to increase the production and consumption of those products. Higher priced red meat, beef and lamb products have decreased. It’s very similar in the Middle East and North Africa region. Overall, these nations have been in touch with us on the supply availability from the U.S. and continue to buy.”
Thomas Mielke, Oil World editor and CEO, and Emily French, ConsiliAgra managing director, addressed the “Phase 1” agreement between the U.S. and China that was unveiled in mid-January. Both were reasonably optimistic that China would meet its obligations. An important first step, Sutter says, is removing the tariff on U.S. soybeans.
“The purchases that China is making these days are coming from Brazil because that’s the market that is really trying to push out their crop,” Sutter said. “I think it was the opinion of the experts that we had at our conference that by the middle of this year, sometime between May and August, we should see the Chinese move to the U.S. and start sourcing soybeans here.
“We are still optimistic that China will live up to the ‘Phase 1’ agreements. It will be heavily done in the last half of this calendar year because it was a calendar-year shipment period. Whereas, the U.S. oftentimes looks at a marketing year, which ends the end of August for soybeans, so we won’t fulfill the ‘Phase 1’ quantity in this marketing year, but in this calendar year is what we need to look at.”
Also discussed were containers, as there was much concern about shipping container availability due to the pandemic. During a panel discussion at the conference, a representative of an Illinois grain company said it hasn’t had a problem getting containers.
“We have heard about worries about container supplies from people but I don’t know how severe the actual constraint is on our ability to ship with containers,” Sutter said. “Clearly, we need to get the containers flowing around the world, and I think first we had the tariff situation, which maybe caused some surges to take place as people wanted to ship things at certain times to beat a tariff going into effect, and then clearly the COVID-19 situation has probably limited some container movement as well. Certainly, there have been some delays, but nothing that has truly caused a major supply issue for our importers.”
Other prominent panelists participating in this two-day conference included Soren Schroder, former CEO of Bunge Limited. Schroder discussed the reliability and innovation of U.S. agriculture. Joel Schreurs, Director of the U.S. Soybean Export Council and American Soybean Association. Schreurs is a soybean farmer from Minnesota.
“Technology makes us considerably more efficient,” Schreurs said. “Every two-and-a-half-acre parcel of land on our farm has a different prescription as far as what fertilizer is needed and what the crop itself will utilize. We maintain records each year to learn how to be better stewards of the land, which benefits the environment and enhances our yields.”