Chinese Traders Tour US Crops

OMAHA (DTN) -- A team of Chinese traders representing eight large soybean importing companies, include state-owned COFCO (China National Cereals, Oils and Foodstuffs Corporation), Jiusan Group and privately-owned Hopefull Grain and Oil Group, visited soybean fields in the U.S. western Midwest recently. They checked soybean yields and quality this harvest season to support their purchase of new-crop soybeans.

The Pacific Northwest "is becoming more important for Chinese importers these years, because it is closer to the China market," said Fenglei Dou. Dou is the purchasing manager of Feed Ingredient Trading Ltd., an importer of soybeans, soybean meal and dried distillers grains in south China's Guangdong province.

"As a feed company, we understand that higher quality soybean create more value to my clients. Visiting the Midwest area helps us to understand more about the soybean quality situation of U.S soybeans," he said.

The group started the trip from Fargo, North Dakota, traveled south to South Dakota, Minnesota, Iowa, and then turned west to Nebraska and Kansas. After the tour, the group went to the West Coast to visit a grain terminal owned by Ag Processing Inc. (AGP), a grower-owned cooperative, in the Port of Grays Harbor, Aberdeen, Washington.

Lewis Bainbridge, who farms with his son, Matt, in Ethan, South Dakota, got a unique perspective about the Chinese market in the last few weeks.

Two weeks before the Chinese group visited the U.S., Bainbridge had visited the Chinese buyers when he was part of a delegation the American Soybean Association sent to China.

"We are happy to see Chinese companies keep buying our beans, especially beans produced in my region and we know this will keep going up," said Bainbridge.

Bainbridge was also happy about crop conditions and told the visitors his soybean yield is close to what he had last year. Bainbridge also showed visitors his cover crop. He explained how U.S. farmers use sustainable practices on their farms to ensure high-quality beans are produced for domestic and international clients.

For some of the visitors, this was their first time visiting U.S. farms. Zijian Song, purchasing director of COFCO, paid attention to every detail of farming where he visited.

"I trade U.S. soybeans, but the production situation here is far more advanced than what I think in China," said Song. "I was surprised to hear Nebraska farmers report their dryland yield was around 60 bushels per acre and their irrigated land yielded more than 75 bushels." Song was worried about the crop condition in the west side of the Corn Belt earlier because of summer's drought conditions.

"We are in the middle of harvesting and the yield of 70 to 80 bushels in my farm," said Greg Greving, of Chapman, Nebraska. Greving is an ex-officio member of the Nebraska Soybean Board. "I have received Asian visitors many times and I'm happy to have them come back again and ride with me in my combine."

"This is the 10th year, AGP and the region's state soybean organizations have hosted the soybean sampling tour throughout the region," said Peter Mishek, managing consultant of Mishek Inc. in Omaha.

"During the past 10 years, we brought more than 120 Chinese buyers to visit our farmers, cooperative elevators, as well as soybean organizations of Iowa, Kansas, Minnesota, Nebraska, North Dakota, and South Dakota," Mishek said.

"The idea is to build very good direct business relations with importers, educate our customers, and foster friendship. In the meantime, we have collected and analyzed more than 4,000 samples from farmers and elevators throughout the western U.S. soybean production region," he said.

"Our study shows that soybeans produced in this region and exported from PNW are enriched in limiting essential amino acids and have other attributes more important to feeders than simply higher crude protein content."

Essential amino acids are key factors in the feed ingredients that help livestock to grow and gain weight. Essential amino acids are amino acids that cannot be synthesized internally by animals and must be supplied from diet.

"Not only do we organize this trip each year in the U.S. Midwest, our team travels to China every year to promote our soybeans and introduce our soybean research results to the Chinese feed manufacturing and animal integration clients. The main idea is to let the clients understand that soybeans they bought from PNW bring more nutritional value to their customers and livestock production, because of the higher protein quality, not necessarily quantity," Mishek said.

He added market participants normally think that soybeans from Brazil and U.S. Gulf have better quality compared to PNW soybeans, confusing protein quantity (total amino acid content) with protein quality (the presence and balance of essential amino acids).

Many Chinese and SE Asian soybean buyers have gained a better understanding of the northern U.S. and Midwestern soybeans' physical quality by witnessing the U.S. soybean harvest and handling, Mishek said.

They get a better understanding of soy protein quality by sharing research during these sampling trips the past 10 years, Mishek added. The goal is simply to improve PNW soybean and soybean meal exports and markets for soybean producers, he stressed.

(ES/SK )

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