Fall 2011

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529 Million Bushels of Soy Traded at European Conference

The United Soybean Board’s (USB’s) Global Opportunities (GO) program helped to host the first-ever buyers conference for the European market, where 529 million bushels of soy were traded. The Berlin-based conference, titled Soybean Meal Trade Europe, brought together exporters, importers, feed associations, end users and commodity experts from Europe and the United States to discuss world commodity supply and demand issues.

Rick Stern, a soybean farmer from Cream Ridge, N.J., and a member of the GO committee, attended the conference with several other USB representatives.

“Conferences like this one help to bring together buyers, sellers and producers of soy,” says Stern. “Making face-to-face contact is a priceless opportunity for us U.S. soybean farmers that enables us to tell our story.”

Estimates predict that the European feed market will need 470 million tons of feed to continue to affordably supply nutrition for its livestock, poultry and aquaculture sectors. Since international trade will be a large part of meeting this demand, discussion at the conference focused on European economic and political issues regarding agriculture, the benefits of soy-based feeds and sustainability in animal agriculture.

U.S. Soybean Farmers Stand to Benefit from Canal Expansion

The Panama Canal plays a major role in moving U.S. soybeans to export markets. A larger shipping lane on the canal will

likely open in 2014, and this expansion holds the potential to increase the competitiveness of U.S. soy, according to a United Soybean Board (USB) Global Opportunities (GO) program study released this fall. The study examines the effect the Panama Canal expansion could have on the U.S. soy industry.

“Much of the talk about the impact of the Panama Canal expansion has been speculation,” says USB Vice Chair and GO committee chair Vanessa Kummer, a soybean farmer from Colfax, N.D. “The soybean checkoff initiated this study to assemble credible data and scenarios that will allow U.S. soybean farmers and the rest of the U.S. soy industry to better understand and prepare for what may result from a much larger Panama Canal.”

The study, recommended by the checkoff-funded Soy Transportation Coalition and coordinated by the GO program, expects a bigger Panama Canal to:
•    More than double the average area that draws U.S. soy and grain destined for international markets to the Mississippi River for barge transit to central Gulf of Mexico ports. Currently at 70 miles from the river, the area could expand to 150 miles.
•    Increase by nearly a third the total volume of U.S. soybeans and grain moving through the Panama Canal to export markets.
•    Result in an approximate 35-cents-per-bushel savings for elevators within the range of central Gulf of Mexico ports, assuming the ports will dredge to ensure at least a depth of 45 feet to handle larger ships capable of moving through the expanded canal.

“This report shows that, at present, 44 percent of U.S. soy exports move through the Panama Canal,” says Kummer. “But it also points out that major transportation infrastructure challenges exist in the United States that could limit the anticipated benefits of the canal expansion.”

In 2011, USB made investment in transportation infrastructure one of its two priority issues.

Russia and Ukraine: Competitors or Customers?

Historically, countries surrounding the Black Sea have not been major importers of soybeans, but Russia’s economic improvement from 2000–2008 benefited the country’s agricultural sector. During the last decade, a 78 percent growth in Russia’s animal agriculture resulted in more soybean production to meet animal-feed demands.

The animal agriculture sector has also increased substantially in Ukraine, also in the Black Sea region. However, the checkoff-funded study shows that the country, which used to be part of the Soviet Union before independence in 1991, currently produces sufficient quantities of soybeans and soybean meal to meet its demand for animal feed. While the United States has increased its export share of that declining market, the study suggests that it will be very difficult to make headway in Ukraine, which could eventually become a U.S. competitor for soy in Middle Eastern and North African markets because of its underutilized, highly fertile farmland.

“There is potential in the area, and Ukraine has the opportunity to be an export market for U.S. agricultural products,” says Vanessa Kummer, vice chair of United Soybean Board (USB) and a soybean farmer from Colfax, N.D. Kummer visited the Black Sea region this year to attend the Black Sea Grain and Oilseed Conference. “But Ukraine and other countries in the Black Sea region also have the potential to be competitors of the United States for growing and exporting grains and oilseeds,” she says.

“Ukraine is a country that is trying to transition from its past Soviet Union days into a more open economy, but has not completely moved into the global marketplace,” adds Kummer, who also serves as chair of USB’s Global Opportunities (GO) program.

The study concludes by recommending that USB and the soybean checkoff undertake promotional and marketing efforts to underscore the advantages of biotech soybeans and U.S.-produced soybean meal in anticipation of a decline in Ukraine’s domestic-processing capacity.

To view the entire Assessment of Agricultural Development in the Black Sea Region (Russia and Ukraine), click here.

Study Identifies 20 African Countries as Potential U.S. Soy Customers

Of the nearly 50 countries constituting the area in Africa below the Sahara desert, not all hold potential opportunities for

U.S. soy exporters. However, by using a selection matrix to rank the countries based on relevant variables, a study prepared for the United Soybean Board’s (USB’s) Global Opportunities (GO) program produced a list of countries ranked according to their potential for soy exports, ranging from extremely high to extremely low potential.

Taken as a whole, this region of Africa imported more than 1.1 million bushels of soybeans in 2010, down from a 2007 peak of nearly 6 million bushels sourced predominantly from Argentina. Soybean meal imports have been comparatively static, with nearly 36 million bushels imported from Argentina. The United States exported approximately 9,500 tons of soybean oil to the region, constituting less than 2 percent of total soybean oil imports, which represents a smaller market than competing palm oil sourced from Malaysia and Indonesia.

Countries identified by the study as having among the highest potential for U.S. soy exports include Ghana, Kenya, Nigeria, South Africa and Tanzania. USB GO Chair Vanessa Kummer and Past Chairman Phil Bradshaw met this fall with soy-industry value chain contacts in Ghana during a week of intensive meetings to identify growth opportunities in a country that is increasingly becoming a gateway to West Africa and central and southern Africa.

“I came away from Ghana impressed,” Bradshaw says. “The government was stable, and their desire to work with us equals their need for soy protein. I think the potential for growth down the road, both in Ghana and this entire region, could be sizable. If we can establish ourselves in Ghana as a gateway to the region, we could be in a great position for years to come.”

Soy Competitors United to Benefit Industry

Soybean farmers from the United States met with fellow soybean farmers from Argentina, Brazil, Paraguay and Uruguay as part of the International Soybean Growers Alliance (ISGA). Members of this organization remain committed to meeting the growing demand for soy while providing a safe and sustainable product. These farmers also plan to work together to speak to large buyers of soy.

Global Opportunities (GO) committee member Dale Profit, a soybean farmer from Van Wert, Ohio, attended an ISGA meeting this fall in Rosario, Argentina.

“Even though we are competitors in many ways, it’s important for us to work together with other soybean-producing countries on issues that affect the global soy industry such as sustainability and biotechnology acceptance,” says Profit. “There’s good discussion when we are all able to come together to work on issues.”

Several subjects were discussed at the ISGA September meeting, including collaborating to improve regulatory processes in China and the European Union (EU). Members have agreed to investigate the possibility of a joint United States and South American mission to the EU to meet with decision makers and discuss the regulatory process. Both U.S. and South American farmers could benefit from wider acceptance of soybeans improved through biotechnology, which the EU has been hesitant to allow.

While in Argentina, Profit also took part in the fifth Mercosur Soybean Conference, which focused on markets in China and India.

Keeping U.S. Transportation Improvements on Track

A group of soybean farmers tried to level the bumpy condition of the nation’s transportation infrastructure at the Soy Transportation Coalition’s (STC) 2011 annual meeting held recently in Savannah, Ga. Farmers representing soybean organizations from 11 states along with two national organizations who serve on the STC elected 2012 officers, received updates of transportation studies underway and deliberated and ranked new ones designed to improve public and private investment in U.S. roads, bridges, railways and ports. Soybean checkoff funds help export more than every other row of soybeans grown in the United States.

The group heard an update on two checkoff-funded transportation studies nearing completion. They include:

1.    The first phase of a study examining the local impact of a catastrophic failure of locks and dams on U.S. rivers, scheduled to be completed in January.

2.    A farm-to-market study that will explore the journey of U.S. soybeans from the farm to customer and investigate transportation choke-points along the way. U.S. soybean farmers and other representatives of the U.S. soy industry originated the project as part of the biennial soy industry CONNECTIONS meeting in 2010.

“The farmers who serve on USB determined increasing investment in transportation infrastructure should be a top priority for the soybean checkoff,” says Dale Profit, Ohio farmer and one of three United Soybean Board (USB) directors who serve on the STC. “This work remains critical if the U.S. transportation system will be able to provide us with a competitive advantage compared to soybean farmers in other parts of the world.”

USB’s Global Opportunities (GO) program provides partial funding for specific transportation-related studies recommended by the STC. In addition to Profit, other USB GO Committee farmer-directors who serve on the STC board include Dwain Ford of Illinois and Jared Hagert of North Dakota.

Other action the STC took at its annual meeting included:

•    Funding a study to examine what kind of transportation infrastructure rural America will need in the future and, if too expensive, what kind of new solutions American agriculture may need to explore.

•    Voting to research a bylaws change that could establish two-year term limits for each position of the STC executive committee.

•    Reelecting Iowa farmer Ed Ulch as 2012 STC chairman, Ohio farmer Patrick Knouff as vice chairman and Kansas farmer Jerry Wyse as secretary-treasurer.

The STC’s next meeting takes place Wednesday, Feb. 29 prior to Commodity Classic in Nashville.

Farmers Named to Serve on USB Global Opportunities Committee  

A new committee will help continue the work of the Global Opportunities (GO) program in 2012. Newly elected USB Chair Vanessa Kummer, a soybean farmer from Colfax, N.D., appointed the following farmer-leaders to the 2012 GO committee at the USB annual meeting held recently in St. Louis:

– Laura Foell, GO chair, soybean farmer from Schaller, Iowa
– Bob Metz, GO vice chair, soybean farmer from West Brown Valley, S.D.
– Bill Beam, soybean farmer from Elverson, Penn.
– Dwain Ford, soybean farmer from Kinmundy, Ill.
– Richard Fordyce, soybean farmer from Bethany, Mo.
– Jared Hagert, soybean farmer from Emerado, N.D.
– Dale Profit, soybean farmer from Van Wert, Ohio
– Jim Stillman, soybean farmer from Emmetsburg, Iowa

“As chair, I am excited to lead this group as we work to bring coordination and collaboration to USB efforts in understanding issues associated with our industry both domestically and internationally,” says Foell.

The GO program has several studies under way to uncover more about the U.S. soybean industry and increasing profitability potential for the entire value chain. Results from a study on the U.S. lock and dam system, a complete look at the U.S. farm-to-end-user transportation system, and a review of U.S. farmers’ freedom to operate are all expected in early 2012.