Purpose of the China Trip

To develop province to state relationships with current and potential buyers and users of U.S. soybean products.


Delegation

The U.S. Delegation includes the Iowa Secretary of Agriculture, Bill Northey and leaders of the Iowa Soybean Association supported by officials of AGP (Ag Procsessors) and agricultural media.


Goal of the Trip

To increase Chinese awareness of the quality of Iowa soybeans and soy products to increase state sourced shipments to the Guangdong Province and to solidify relationships with private and government owned importing and processing companies in China.


Observations

China now imports forty percent of U.S. soybeans and has outstripped traditional buyers such as Japan, Mexico and Taiwan.

China imported over 435 million bushels (11.8 million metric tons) of soybeans from the US during the most recent marketing year, which was 40 percent of all US soybean exports.

Forty-five percent of U.S. soybean production was exported over last five years.

Soy exports were valued at over $10 billion U.S. dollars in 2006.

Over seventy-nine percent of Iowa soybean meal (SMB) leaves the state.

Iowa is the largest soybean producing state, accounting for 16 percent of U.S. soybean production.

U.S. SBM exports of 8.44 million metric tons in 2007.

Estimate SBM exports of 13.6 million metric tons by 2010.

In 2007, soybean oil (SBO) exports were 634,100 metric tons, up forty-five percent.

AGP processes or handles over twenty-five percent of Iowa's soybeans and have built a port at Gray's Harbor, Washington to increase speed of shipment to all Asian customers, including China. Midwest soybeans can be efficiently shipped via rail to Grays Harbor for quick loading and shipment to Asia. The route and facilities allow soybeans and soybean products to be delivered to China in approximately seven to ten days less time than other U.S. ports located in the Gulf of Mexico and far faster than South American soybean shipments.


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JCI Grains Conference in Shenzhen, China


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Iowa Observers in China-Our Most Important Market? Part 1


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Iowa Observers in China-Our Most Important Market? Part 2




Day 8 - Tourists in the World's Oldest Country

Thursday, April 3

OK, you can argue that Egypt and Mesopotamia are older, but what are they now? China goes back to ancient dynasties and then the tumultuous times of the twentieth century. Now a new China has clearly emerged but with a great reverence for its past.

Great Hall of the People

Digital Cameras Rule
The photos from National Geographic, news coverage and documentaries became reality for us as we boarded a bus and tried to see all we could in one day. From the Great Hall of the People in Tiananmen Square, when the communist party under Chairman Mao held forth, to the Forbidden City when emperors resided for centuries to the Great Wall built to keep out the Mongols to the Ming tomb when the emperors were laid to rest and given their needs for the next world. It is amazing how this society paralleled others around the world and how it went from being very closed to open to closed to open. Photos can say more than words as we journeyed through the layers and layers of palaces of the Forbidden city, walked on the very steep Great Wall and viewed the final resting places of the country's leaders.

Jackie Chan

Jackie Chan was There!
Yes, the star of action movies, who is huge here, was doing a commercial (we were told) with the Great Wall as a backdrop. Approach to the wall was almost impossible as hundreds crowded in for a look at the star.

Short Summary
We have completed a very active trip. I am near exhaustion. All are ready to come home. Like all promotion efforts, the energy goes in well in advance of the return coming back. Everyone was at every meeting. We made presentations and answered questions. We will now follow up through contacts with the American Soybean Association and AGP.

Northey and Mao Forbidden City

We board a plane and fly back into our own livesÉfor 37 hours it will remain the same day.

Secretary Northey summed it up this way: "When we got here and looked around we were pretty much authorities on China. Now that we've been here for a week, we realize that we know virtually nothing about this country." How truce but a little too much to grasp right now. Perhaps realizing what you don't know is the first step toward knowledge... Kenfucious

What do you think... I can handle it. kenroot@clearchannel.com




Day 7 - Grain Trade Looks Promising

Wednesday, April 2

We are pretty much into the swing of meetings and dinners and grabbing the occasional moment to shop. We are staying in a city that is growing beyond belief in a country that has the world's attention. We are in the right place at the right time and this delegation is doing its part to capitalize on that.

Chinatex logo

We met today with representatives of Chinatex, a much larger exporter and importer than COFCO because they also handle much of the manufactured good trade coming out of China. Pete Lombardo, trip coordinator representing AGP, says the clothing we were wearing probably was sold through Chinatex.

Again we find a group of savvy specialists who want to talk about US production of soybeans and other crops. They also want to know how much it costs to produce them. We give them numbers they could access from USDA, but find it interesting that they are tracking our cost of production. I did not sense resentment from the farmers, but some would love to tell the Chinese of the many years they made nothing except for the government payment to keep producing corn or soybeans.

One spokesperson for Chinatex, talking freely asked about winter wheat (grown primarily in Kansas, Oklahoma an Texas). He said: "We have heard that this crop is grazed by cattle and then produces grain. Is this a cruel joke or really true?" Ag Secretary Northey answered that it was true and drew me into the conversation to explain how it was done based on my Oklahoma background The Chinese are interested in everything about us with a bottom line of knowing how dependable a supplier we will be in future years. Projections that they will double their imports of soybeans seem realistic but there is great potential for corn imports beginning in 2009. If that is the case, it could be a floor under the market that augments ethanol use. That is exciting news to these growers who are here representing soybeans but realize our crops are tied together, even wheat.

Delegation with Chinatex Luan Richeng in center

An out of sequence note: Bill Northey, John Heisdorffer and I attended a dinner with representatives of Pioneer on Thursday evening. They have 20 people in China and several hundred in their joint venture company. Selling corn seed into this market is quite dynamic and profitable but the question is when China will start growing GMO corn. I asked if it appeared to be a contradiction to import GMO corn (which they do) but now allow their farmers to grow it? There was a quizzical "yes" as they are trying to bring a GMO corn through government approval. Interestingly it will be a "phytase" corn. Not sure of the spelling, but a GMO event that allows livestock greater use of phosphorous in the corn and less phosphorous in the manure. If this goes into production, it will be only for feed. (haven't we heard that somewhere before?) So we will see if China comes up with this in the next 5 years.

There was also discussion of the changing structure of Chinese farming. From all our sources, articulated by Bill Northey, China doesn't really have a problem letting farming operations get larger because they will be more likely to use technology and increase yields. When you are feeding 1.4 billion people, with more on the way, you can't get too sentimental about the culture of the countryside.

Our last big dinner was with Chinatex and we had a great discussion again. They presented me with a bottle of the high test white liquor that I have packed and hopefully will bring home. I did the same in 1981 and we only drank it on special occasions, It lasted seven years.