SOYBEAN SALE TO CHINA INKED
Jun. 11, 2014
Source: Iowa Soybean Association news release
A purchase agreement signed today in Des Moines will result in four Panamax ships full of soybeans setting sail from the United States to China during the next marketing year.
China Jiusan, one of the largest soybean crushers in China, agreed to buy 200,000 metric tons of soybeans from Zen-Noh Grain Corp., a grain trading company based in Mandeville, La. The action occurred during a contract signing ceremony hosted by Iowa Economic Development Authority at the state capitol.
The deal is worth an estimated $100 million and was one of several contracts and memorandums of understanding (MOU) signed between Chinese government and business representatives and Iowa agriculture and business officials.
The Iowa Soybean Association (ISA) and the Iowa Department of Agriculture and Land Stewardship each signed a MOU of cooperation with the China Chamber of Commerce of Foodstuffs & Native Produce to foster even more agricultural trade between Iowa and China.
More than 50 people, including farmers and agriculture, business and government officials from Iowa and China, filled the Iowa Supreme Court Chambers to witness the signings.
Grant Kimberley, ISA market development director and central Iowa farmer, said the soybean purchase agreement and ceremony at this time of year is significant.
"China is securing soybean supplies early. And, it's a continuation of the strong relationship between Iowa and China established by Gov. Branstad and President Xi," Kimberley said.
U.S. soybean farmers exported a record 1.58 billion bushels in 2013, valued at nearly $28 billion. Soybeans are the nation's leading farm export.
With four months left in the current marketing year, soybean exports are on pace to set a new record. A growing middle class in the world's most populous country craving more protein is the major reason. Chinese pork production is up 39 percent since 2000, and soybean meal is needed to feed hogs.
ISA President Brian Kemp, who farms near Sibley, signed the MOU on behalf of the association and its 11,400 members. He said it forges a relationship of cooperation and transparency.
"China is our No. 1 customer. With that partnership comes a responsibility," Kemp said. "For soybean farmers, that responsibility is to grow a high-quality, reliable supply of soybeans while caring for soil and water quality. We're dedicated to continuous improvement."
According to Ross Trentadue, merchandiser for Zen-Noh Grain Corp., the company sources much of its soybeans from the Midwest via barge and rail. One in four rows of soybeans grown in Iowa is exported, officials said.
Continuing to build friendships with the top foreign buyer of U.S. soybeans is why ceremonies and farm visits are important, Kimberley said. The Chinese officials also toured the Kimberley grain farm near Maxwell. Grant and his father, Rick, have hosted several Chinese delegations.
Rong Weidong, vice president of the China Chamber of Commerce of Foodstuff & Native Produce, said the spirit of cooperation is alive and well between the two nations. The chamber works with grain buyers in China to determine the nation's needs.
"Through the signing ceremony, we hope to foster a partnership with Iowa and a better future for all of us," Weidong said.
ISA District 5 Director and Secretary Rolland Schnell agreed. The rural Newton farmer said building even stronger friendships with China will help soybean farmers and all Iowans.
That bond was evident today. It will take about 7.4 million bushels of soybeans to fulfill the contract signed today, which is more than what Schnell and fellow farmers in Jasper County produced last year (5.85 million bushels).
The delivery date is sometime between November and October 2015.
"Without a good relationship, they wouldn't have confidence in our soybeans," Schnell said. "The relationship will carry us through bumpy spots whether economic or political."
To learn more about ISA, go to www.iasoybeans.com.