DES MOINES, Iowa — A 30-member delegation from China agreed to purchase $4.31 billion in U.S. soybeans during signing ceremonies on Feb. 15 at the World Food Prize Center in Des Moines.

“Iowa’s soybean farmers are pleased to welcome our friends from China back to Iowa,” said Kirk Leeds, Iowa Soybean Assoc. (ISA) CEO. “We want to say ‘thank you for the business’ and to continue to build upon these strong relationships.

“We have led many delegations of farmer leaders to China and host multiple groups from China every year,” he said of the 15 signed commitments, which totaled more than 8.62 million metric tons (mmt), or 317 million bushels.

The signing ceremony was part of a three-day visit by Chinese trade and commerce dignitaries, which was initiated at the request of Chinese Vice President Xi Jingping, who visited Iowa in 1985. Led by Bian Zhenhu, president of the China Chamber of Commerce for Import & Export of Foodstuffs, Native Produce and Animal By-products, the delegation signed contracts with U.S. companies that included ADM, AGP, Bunge, Cargill and CHS, with more soybean commitments signed later the following week in Los Angeles.

Leeds said he’s hopeful “the total numbers will set a new record for U.S. soybean commitments made in one signing trip. Today’s signing ceremony is another indication of the value and importance of these relationships.”

As a witness to the Sino-U.S. Agricultural Trade Cooperation Conference and Soybean Contract Signing Ceremony, Iowa Agriculture Secretary Bill Northey said China “has been a key customer of Iowa soybeans, and this agreement shows a commitment on both sides to continuing that relationship.

“Iowa farmers are tremendously productive and exports are vital to the economic health of our state, with more than $7 billion in agricultural exports. China is a rapidly increasing portion of that total, and it is important we continue to build on that strong partnership.”

Hosted by the ISA, the U.S. Soybean Export Council (USSEC), United Soybean Board and the American Soybean Assoc. (ASA), and attended by U.S. soybean industry representatives, the ceremony included USDA officials and Iowa leaders. Chinese guests included the Ministry of Commerce, People’s Republic of China delegation headed by Assistant Minister Yu Jianhua and the Hebei Provincial Commercial Delegation.

“China consumes around 25 percent of the U.S. production of soybeans,” said Roy Bardole, a Rippey, Iowa, soybean farmer who chairs the USSEC.  “As the soy family continues to work to position U.S. soybeans as the best value in the world, my fellow farmers look forward to providing China and other global markets with a quality product.”

Xiaoping Zhang, who accompanied the visiting delegation as the China country director for the ASA International Marketing, said the delegation had looked forward to meeting with the U.S. soy industry to “develop a closer relationship with and better understanding of the efficiency of the U.S. industry.

“Chinese government and soybean buyers attach great importance to trade relations with the U.S. for a reliable supply of soybeans to feed the world’s largest population, whose living standard continues to improve,” he said.

The United States produces approximately 35 percent of the world’s soybeans. Since 1991, global soybean demand has increased 151 percent, with soy being the leading U.S. agricultural export, accounting for roughly 55 percent of U.S. crop exported. 

In 2011, 40.859 mmt of U.S. soybeans were exported. Of that, 24.368 mmt, or approximately 60 percent of U.S. soybean exports, went to China.

The delegation represents 45 percent of total U.S. soybean exports in fiscal year 2010-11. The soybeans are expected to come from last fall’s harvested crop, with the 2012 crop to be planted this spring. They are expected to be shipped in fiscal year 2012-13.

Virgil Schmitt, Iowa State University extension field agronomist in Muscatine, said China purchases $7 billion worth of products every year from Iowa. “We export about a third of the products we produce here, and of that, China consumes about 15 percent,” he said in a Feb. 18 interview with Public Radio International. “China is our largest customer.”

Some U.S. farmers and other observers, however, remain skeptical of the trip, given the exponential rise of Chinese dominance in the U.S. market. Charles Dobbs, ISU professor of modern Asian history and resident expert on China, told the Iowa State Daily on Feb. 15 he thought the recent visit wouldn’t achieve much.

“A pleasant visit won’t affect how China calculates its policy and needs any more than it will affect how America does the same,” he said.

Instead, Dobbs told the student newspaper the visit was nothing more than simply a strategic move by both President Obama and Xi “to gain more popularity at home.

“Xi wants to show other Chinese leaders and the Chinese people more generally that he has the heft to lead China and to represent the Middle Kingdom on the world stage,” he said. “Obama, similarly, is using the visit at least in part to deal with domestic issues, especially his reelection prospects.

“He is saying and will continue to say what Americans want to hear – even though it likely will have no effect on Xi and the collective Chinese leadership,” Dobbs added.