On A Mission: How Trade Visits Impact Demand For U.S. Soybeans
There’s no downplaying the significant role exports play for U.S. soybean farmers. The USDA reported that the United States exported a record $24.7 billion in soybeans in 2021, which was 7 percent higher than the previous year.
And while sales to China have rebounded in recent years, new and emerging markets have pushed U.S. soybean sales to record-high levels. In 2021, sales to Mexico increased by a whopping 42 percent year-over-year (YOY). Three other countries among the top 10 export markets for U.S. soybeans — Japan, Indonesia and Taiwan — posted YOY increases of 27, 22 and 21 percent, respectively.
Soybean Checkoff Invests In Trade Relationships
Leaders at South Dakota Soybean Research and Promotion Council are keenly aware of the impact exports have on profitability for South Dakota farmers.
“Over 60 percent of U.S. soybeans are exported,” says Dawn Scheier, who farms near Salem, South Dakota, and serves as District 3 Director. “That is why it is important that we make sure we're having good communication with our customers around the world.”
One of the things driving global demand for soybeans is increased meat consumption as incomes rise in developing nations. More livestock production calls for more high-quality, protein-rich feed, and soybean meal has built a strong reputation in this regard.
Another driver is the rise of biofuels — including biodiesel, renewable diesel and sustainable aviation fuel (SAF) — as the market explores more environmentally responsible alternatives for our transportation and energy needs.
Scheier is a firm believer in the benefits of trade tours sponsored by state and national soybean checkoff organizations and the opportunity they create for U.S. farmers to assert the value of their product.
She has participated in trade visits with the South Dakota Soybean Research and Promotion Council as well as through her role with World Initiative for Soy in Human Health (WISHH) over the past decade.
These tours typically offer U.S. farmers the opportunity to visit with key stakeholders abroad in countries that have been identified as either new or emerging markets. Meeting participants include grain buyers and traders, executives from processing plants and feed mills, and major players in the livestock and biofuels sectors. Together, they discuss topics like on-farm practices and soybean quality as well as how soybeans are used across particular industries in that country.
Conversely, trade visits can also bring some of these international stakeholders to the U.S. to learn more about soybean production firsthand.
“I still talk to people from past trade visits,” says Scheier, who most recently attended a U.S.-hosted trade tour last fall in the Upper Midwest featuring visitors from three different continents. “You’re building relationships. Building relationships really helps to build trust.”
And with that trust, of course, comes the increased likelihood that international trade partners will look to the U.S. when purchasing soybeans.
Growing Demand for Sustainability
One of the most important issues that comes up during soybean trade visits is that of sustainability; there is both growing consumer demand and increased governmental regulation around environmentally responsible on-farm practices.
From Scheier’s point of view, this creates a unique opportunity for U.S. soybean producers. In an international playing field where U.S. soybean growers must compete with the likes of Brazil and Argentina, being able to assert our own sustainable practices with potential buyers is paramount.
“We're doing a lot of practices that are really good for the environment: precision farming, no-till and min-till, cover crops,” says Scheier.
She also notes that soybeans are a sustainable product in and of themselves, with benefits ranging from carbon capture and nitrogen fixation to new uses that have the potential to replace petroleum-based products.
“We’re able to show that we can feed the world by being good stewards of the ground that we farm,” says Scheier. “That’s why we’re a good source.”
Looking Ahead to New Markets
Now that COVID-19 concerns have subsided some and international travel is back on the rise, trade tours are back at the forefront of these relationship-building efforts.
China, which imported 96.52 million metric tons of soybeans in 2021, obviously continues to loom large as the dominant export market. But it is also clear that many other countries are emerging as growing markets for U.S. soybeans.
With this in mind, South Dakota Soybean Research and Promotion Council remains focused on building relationships with these key players in the Middle East and North Africa, South and Southeast Asia, the European Union and elsewhere.
“We want to make sure we have good, diverse markets for the U.S. farmer,” says Scheier. “It’s a long-term investment.”