By DOUG SCHMITZ
Iowa Correspondent

DES MOINES, Iowa — In what the United Soybean Board called the largest trade deal in U.S. history, a Chinese delegation last week signed 10 private contracts with the state of Iowa to buy 2.2 million metric tons of soybeans, valued at an estimated $700 million.

“(Iowa is) the No. 1 soybean producer in the U.S. and we continue to be, and we also produce the highest quality of soybean and most consistent supply,” said Ray Gaesser, president of the Iowa Soybean Assoc. (ISA), about the memorandum of understanding that China soybean officials signed in the Iowa State Capital Rotunda.

The contract signings were part of a multi-city tour by Chinese companies, and account for 70 percent of the 410 million bushels of soybeans that U.S. farmers are expected to sell to the Communist country during the 2007 market year.

The Chinese delegation was in Chicago May 14 to commence the U.S. trip, signing 17 contracts worth $2.07 billion with eight U.S. soybean export companies at the Chicago Board of Trade. Last week, China signed 27 contracts with U.S. soybean-related companies, totaling more than $2.7 billion.

As the nation’s leading soybean producer, Iowa will be growing the largest percentage of U.S. soybeans purchased. ISA, the United States Soybean Export Council (USSEC) and the Iowa Department of Economic Development (IDED) hosted the event.

“The ISA works with and funds projects with the USSEC, the American Soybean Assoc. and the United Soybean Board to actively increase export opportunities with China,” said Grant Kimberley, ISA director of market development.

USSEC said USDA data found that China’s soybean imports from all exporting countries grew from 381 million bushels in 2001 to a forecasted 1.1 billion bushels for 2007, with nearly one-third supplied by the U.S. Last year, China imported 435 million bushels of U.S. soybeans, representing about 40 percent of all U.S. soy exports and nearly 13 percent of the entire U.S. crop.

Assistant Minister of Commerce of the People’s Republic of China Wang Chao forecast China’s trade with the U.S. would even out by 2010. In 2006, U.S. exports to China totaled $55.2 billion, while U.S. imports topped $287.8 billion, leaving a trade deficit for the U.S. of $232.6 billion, the U.S. Census Bureau estimated.

Despite the historic signings, China has reneged on several trade compliances in the past, according to the World Trade Organization (WTO), which Sen. Charles Grassley (R-Iowa) has attempted to get China to fix since 2003.

But Kimberley said he wasn’t concerned about China compromising this deal.

“It is true that we do have some regulatory hurdles to address from time to time. China has presented some of the same hurdles to Brazil as well,” he said. “(But) when it comes to soybean trade, the Chinese have been very good trading partners.”

This farm news was published in the May 23, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.