South Dakota Soybean Producers Find Hope in Global Market Opportunities

Even in a difficult market environment due to ongoing trade challenges abroad, there's still plenty of room for optimism for South Dakota soybean producers. And not all of those good vibes are driven by continued growth in demand for biofuels, either.

According to Michael McCranie, the positive outlook has much to do with groundwork that has been laid by farmers through the work of U.S. Soybean Export Council (USSEC) and their qualified state soybean board. "You've got to remember that, in South Dakota, almost seven rows out of every 10 are exported," said McCranie during an interview at the recent Midwest Agricultural Export Summit hosted by South Dakota Trade. "It's imperative that South Dakota and, even at the national level, we have to export."

To that end, United States Department of Agriculture (USDA) figures estimate that roughly 54 percent of this year's soybean crop in the U.S. will be exported, underscoring the importance of nurturing relationships with key trade partners around the world.

The importance of trade relationships

McCranie farms outside of Claremont and formerly served as District 7 Director for South Dakota Soybean Research & Promotion Council. Today, he represents his home state as a director for United Soybean Board (USB) and chairs the USSEC board as well. He observed that challenges with U.S.-China trade relations have made it all the more imperative for USSEC to diversify global markets.

"You have to keep working at [relationships with prospective buyers]," said McCranie. "And even after you build relationships and you get business, you have to keep doing it."

South Dakota Soybean Research & Promotion Council District 1 Director Tanner Hento echoed these sentiments during the same interview. "The worst thing to do is go into coast mode," said Hento, a fifth-generation farmer from Avon. "So we have to keep showing up and making sure that while we expand other markets that we don't neglect the ones that we currently have."

In its efforts to tap into new and emerging destinations for U.S. Soy, USSEC utilizes market analysis tools to evaluate where its resources are going to be best allocated. "It's all data-driven," said McCranie. "You have to analyze all the different aspects of a market. Farmers' dollars are what fund [USSEC], and so we don't want those dollars to go to waste."

Trade missions play a big role in nurturing relationships with buyers in foreign markets. "It's really hard to form a relationship through a screen," said Hento, who most recently participated in a checkoff-sponsored trade mission to Vietnam. "Being able to promote the quality of U.S. Soy in person means a lot."

Sometimes it takes years for a trade relationship to bear fruit, but it's all part of the process to expand markets and support global demand for U.S. Soy.

Value-added agriculture supports farmers' bottom lines

One aspect of soybean trade that has caught the attention of many farmers is what Hento described as "value-added agriculture" and its impact on their bottom line. The term can be applied to many different facets of agriculture; in this context, it refers to the transformation of a whole soybean into one or more uses that returns more value to producers.

Take biofuels, for example. Because of demand for biodiesel, renewable diesel and sustainable aviation fuel (SAF), more and more domestic soybean processing facilities have come online in recent years. These plants extract soybean oil for use in biofuels, but they also produce soybean meal. The resulting surplus of soybean meal allows USSEC to reach new markets.

"We have instances where we are working with crushers that actually buy beans from all over the world, but they are small crushers," said McCranie. "And so what they're doing is they're importing meal as well to send to their customers because their markets have increased, but their crush has not. So they're grabbing that part of the market as well, which is a real plus for us."

Hento pointed to rising livestock production driven by growing appetites for protein in developing countries and demand for commercial soy-based products as real opportunities for soybean producers on the global market. "If we can get those products — all that oil, all that meal, all those end products made in the U.S. — then we can ship those directly to the countries," said Hento. "And that's what makes the difference."