Thursday China sent a signal that it is committed to purchasing US soybeans in this calendar year. A delegation of Chinese soybean buyers on a relationship-building tour signed a letter of intent with U.S. soybean exporters at the Chicago Board of Trade for over 4.9 million metric tons of soybeans with Illinois companies.
Last year China imported nearly 12 million metric tons of U.S. soybeans. More intentions are expected at a delegation visit in Minneapolis Friday.
China's growing urban population and income increases China's livestock demand. United Soybean Board Chairman Curt Raasch says U.S. soybean imports predominantly go to China's livestock industry: 51% to poultry feed, 27% swine and 20% into aquaculture.
Phil Laney, American Soybean Association-International Market China warns US farmers need to keep supplying China's soybean needs with higher protein and oil levels. "It's important our producers keep an eye on that. We don't have that business locked up," he says.
China is the number one export market for U.S. soybeans with 435 million bushels, more than 40% of total U.S. exports, sold to China in the last marketing year. The delegation currently visiting the U.S. represents 67% of those 435 million bushels. Since 2002, the value of China's agricultural imports has more than doubled, with soybeans accounting for 30% of the increase.
U.S. soy has the fewest trade barriers among all world agriculture exports. Total U.S. soybean exports have nearly doubled since 1984, from nearly 598 million bushels of soybeans to over 1.1 billion bushels in 2005. Last year, exports of soybean and soybean meal hit the 1.4-billion-bushel mark, an ongoing upward trend.
"U.S. soybean farmers have been on the ground in China for 25 years, providing ongoing service to buyers throughout China with our contracted representatives," says Raasch. "We fund work on best management practices with processors and the swine, poultry and aquaculture feeding industries, and, most recently, we've been helping to grow demand in China by promoting soy protein to bakers, millers and food processors."
Building and maintaining relationships with these Chinese buyers will help ensure that U.S. soybean exports continue to grow and add to soybean farmers' bottom line.