Chinese leaders made commitments to purchase $4.31 billion worth of U.S. soybeans during signing ceremonies that took place February 15 at the World Food Prize Hall of Laureates in Des Moines, Iowa. The commitments signed in Des Moines total to more than 8.62 million metric tons or 317 million bushels. More soybean commitments are expected to be signed in Los Angeles as the Chinese delegation travels there after it leaves Des Moines on February 16 to complete the remainder of its U.S. trip.
"Iowa's soybeans farmers are pleased to welcome our friends from China back to Iowa," said Iowa Soybean Association (ISA) CEO Kirk Leeds. "We want to say 'thank you for the business' and to continue to build upon these strong relationships. We have led delegations of farmer leaders from Iowa and other states in the U.S. to China and we host groups from China every year. Today's signing ceremony is another indication of the value and importance of these relationships. With the additional signings later this week in Los Angeles, we are hopeful the total numbers will set a new record for U.S. soybean commitments made in one signing trip."
China has been a great trade partner and key customer for U.S. soybeans
The Chinese delegation, led by Bian Zhenhu, president of the China Chamber of Commerce for Import & Export of Foodstuffs, Native Produce and Animal By-products (CFNA), indicated its intentions to purchase U.S. soybeans by signing 15 contracts with U.S. companies, including ADM, AGP, Bunge, Cargill and CHS, among others. Iowa Secretary of Agriculture Bill Northey participated as witness to the signing ceremony.
"China has been a great trade partner and a key customer of Iowa soybeans, and this agreement shows a commitment on both sides to continuing that relationship," says Northey. "Iowa farmers are tremendously productive and exports are vital to the economic health of our state with more than $7 billion in agricultural exports. China is a rapidly increasing portion of that total, and it is important we continue to build on that strong partnership."
The Sino-U.S. Agricultural Trade Cooperation Conference and Soybean Contract Signing Ceremony was hosted by the Iowa Soybean Association (ISA), U.S. Soybean Export Council (USSEC), United Soybean Board (USB) and the American Soybean Association (ASA), and attended by U.S. soybean industry representatives, USDA officials and Iowa leaders and dignitaries, in addition to Chinese guests who included the Ministry of Commerce, People's Republic of China (MOFCOM) delegation headed by Assistant Minister Mr. Yu Jianhua and the Hebei Provincial Commercial Delegation.
Mutually beneficial relationship between U.S. soybean farmers and China
Other leaders participating in the ceremony also made remarks about the significance of the ceremony and the mutually beneficial relationship between U.S. soybean farmers and China. "China consumes around 25% of the U.S. production of soybeans," said Roy Bardole, USSEC chairman and a soybean farmer from Rippey, Iowa. "As the soy family continues to work to position U.S. soybeans as the best value in the world, my fellow farmers look forward to providing China and other global markets with a quality product. We look forward to many more years of working together."
Xiaoping Zhang, who accompanied the visiting delegation as the China country director for the American Soybean Association's international marketing program, said, "Chinese government officials and soybean buyers attach great importance to trade relations with the U.S. for a reliable supply of soybeans to feed the world's largest population, whose living standard continues to improve. The 30-member delegation represents 45% of total U.S. soybean exports in FY10/11, and they have actively participated in the U.S. soybean industry's promotional activities both in China and in the U.S. to sustain and increase the demand for soy products. In addition to this signing ceremony, they have looked forward to meeting with the U.S. soy industry to develop a closer relationship with and better understanding of the efficiency of the U.S. industry."
U.S. produces 35% of world's soybeans; 55% of U.S. soybean crop is exported
The U.S. produces approximately 35% of the world's soybeans. Since 1991, global soybean demand has increased 151%. Soy is the No. 1 U.S. ag export with roughly 55% of the U.S. soybean crop exported. In 2011, 40.859 million metric tons of U.S. soybeans were exported. Of that, 24.368 million metric tons, or approximately 60% of U.S. soybean exports, went to China in 2011.
The signing ceremony was part of a three-day visit by a large and influential Chinese delegation of trade and commerce dignitaries. The visit was initiated at the request of Chinese vice president Xi Jingping, who visited Iowa in 1985 and wished to return to the state where he had experienced Midwest hospitality. Xi Jinping is expected to become president of China later this year or early next year when the current president retires.The Chinese delegation's trip has also included a stop in Chicago, where they visited the Chicago Board of Trade and met with some market analysts, a visit to an Iowa farm, and a meeting with Governor Branstad and Lt. Governor Reynolds at the Iowa Capitol. On departure from Iowa, they will make stops in Los Angeles for another signing ceremony, before going to Hawaii and then home to China.