Sign In | Create an Account | Welcome, . My Account | Logout | Subscribe | Submit News | Contact Us | Home RSS
 
 
 

U.S.-China $6.6 billion soybean deal benefits Minnesota

January 28, 2011
Story by Jenny Kirk

During the official state visit to the United States recently, China President Hu Jintao squeezed in time to meet with Minnesota Gov. Mark Dayton and other state legislators, Minnesota Department of Agriculture Commissioner Dave Frederickson and other leaders of farm organizations at the Minnesota Department of Agriculture in St. Paul to discuss the soybean industry.

After heading to Chicago, Hu Jintao and a delegation of 19 representatives from China signed a letter of intent for the purchase of more than $6.6 billion in U.S. soybeans.

According to 2009 data MDA, soybeans account for 61 percent of the U.S. agricultural exports to China, followed by a small percentage of red meat (4 percent), poultry (3 percent) and dairy products (1 percent).

"China is our No. 1 trading partner," said Shannen Bornsen, international resources manager of MDA. "For the U.S. as a whole, China's definitely one of the largest consumers. With Minnesota being one of the biggest soybean-growing states, you can understand the double-whammy. Last year, our agricultural export to China was estimated at $900 million in total value."

The agricultural market growth has skyrocketed since 2007, when the agricultural exchange between Minnesota and China was reported to be approximately $350 million.

"This was a huge deal for us," said Jim Call, a soybean farmer and Minnesota Soybean Research and Promotion Council board member. "The $6.68 billion deal equates into 423 million bushels of soybeans. It's the single largest buy that China has ever done. We produce around 200 million bushels in Minnesota, so it's more than doubled our production."

Call, who farms in the Madison area, also serves as chairman on the United Soybean Board's (USB) international marketing committee and was present for the meetings in St. Paul and Chicago.

"It was pretty exciting," Call said. "There were representatives from a lot of companies. Soybeans came out pretty good on the deal."

Fifty percent of the soybeans produced in Minnesota and the U.S. need to be exported, Call said.

"When you look out at a field, think of it as every other row that has to be exported," he said. "That's why China is such an important market for us."

While the deal with China helps avoid a production surplus, China obviously benefits as well.

"It's great to know that we're able to help them out, too," said Steve Brusven, a Cottonwood farmer who represents Yellow Medicine County on the MSGA board. "People in China need protein. They want more protein in their diet, so they're eating more meat."

Soybeans from Minnesota that are slated for export to China are transported by rail to the West Coast, where they're loaded onto a cargo ship. From there, the soybeans are delivered to the many processing plants along the coast of China.

"They'll buy the whole bean and then process it and make their meal and oil," Brusven said. "That offers them more jobs that way. They'll use soybeans for their aqua culture, animal production and for things like flour for bread."

The USB has had an office in China for 29 years for research and to assist with agricultural needs. Brusven said the partnership has been a positive one.

"We've helped them get the right formula for things, like the genetics of their hogs," Brusven said. "We brought over the necessary breeds of chickens, too. We've helped them to grow and be a better and more efficient producer."

Bornsen didn't get the chance to travel to Chicago, but thought the meeting in St. Paul shed a positive light on future interactions between the two countries.

"It was a wonderful opportunity to put a spotlight on international business," Bornsen said. " I think it just shows that both countries have a dependency on each other. We just hope the trade atmosphere continues to stay open from a business perspective."

 
 

 

I am looking for:
in:
News, Blogs & Events Web