U.S. national and state agricultural commodity leaders from Iowa held a virtual town hall meeting on July 30 to discuss the future of agriculture, with a focus on trade and supply chains. With major in-person state agriculture town halls postponed, this conversation aimed to help farmers in Iowa, which is an agricultural hub, learn and share their views with commodity association leaders. This conversation was part of the AGTalks town hall series focusing on predominant agriculture producing states and came at a time when U.S. agriculture’s competitiveness is impacted by trade uncertainty with China, the COVID-19 pandemic, and the increase in non-U.S. trade agreements with overseas customers that Iowa and other key states have traditionally served. Panelists shared challenges, new opportunities, and fielded questions from soy industry representatives.
Jim Sutter, CEO of the U.S. Soybean Export Council (USSEC), served as a panelist during the event. Sutter described collaboration across the ag industry and farmer resiliency during these unprecedented hardships, explained ways that USSEC has strategically pivoted to engage with customers and stakeholders virtually around the world during this time (conducting 80 webinars reaching nearly 25,000 attendees), and reiterated that U.S. Soy remains open for business as a reliable supplier to its customers during the pandemic.
Kirk Leeds, CEO of the Iowa Soybean Association, hosted the virtual meeting and Sara Wyant, Editor and President of Agri-Pulse, served as panel moderator. In addition to Sutter, participating organizations included Growth Energy, Center for Biorenewable Chemicals (CBiRC) at Iowa State University, National Corn Growers Association, Vermeer Corporation and Farmers for Free Trade.
The State of U.S. Soy
The last few years have been challenging, Sutter acknowledged, but stressed the dependability of U.S. farmers who have remained committed to providing soy for food, fiber, fuel and other products for consumers around the world in a safe, sustainable, and effective manner.
U.S. soy organizations have continued their work of providing stability by building demand and expanding global market access. “Specifically, our job at USSEC is to differentiate, build preference, and ensure market access for U.S. Soy around the world,” Sutter explained.
Normal export percentage of the U.S. soy crop is around 60%. At the end of the 2018/19 marketing year, U.S. soy stocks reached a high level at more than one billion bushels as prolific production and reduced exports caused a decrease in soybean prices.
To increase preference for U.S. Soy during this period, USSEC launched the What it Takes initiative in July 2018 to build demand for U.S. Soy in non-China markets. While the U.S. soy industry has long been focused on market diversification, it ramped up its efforts as the situation with China unfolded. USSEC has intentionally focused both on existing relationships abroad and investing in new ones to evolve emerging markets. Sutter pointed to Bangladesh, Pakistan, and Egypt as successful examples of emerging U.S. soy markets. While these markets are showing major growth, he cautioned, “It takes time and there’s no silver bullet.”
At the same time, export competitors are growing aggressively. In particular, Sutter said that the spread is narrowing between Brazil and the United States in both production and export capability, but the sustainability, reliability, and quality of U.S. Soy remains paramount for its customers.
U.S. Soy Remains Optimistic
While recently there have been some renewed tensions between the U.S. and China, USSEC is focusing on the importance of maintaining these prosperous relationships with its Chinese customers, where U.S. Soy has collectively been working for 40 years. “Having the kind of environment where the Chinese want to continue to make purchases and having them feel like there’s a mutually beneficial relationship in place, I think that will make the [Phase 1] agreement last,” Sutter said. “We believe the relationship we built is still in good shape because we haven’t missed a beat.”
Sustainability is another key differentiator that the panelists discussed. U.S. soy sustainability is the result of the great care that American farmers take to protect and nurture their land as they produce their crops each year, coupled with soil conservation programs encouraged by the U.S. Department of Agriculture (USDA) since 1935. In 2013, USSEC responded to customer requests for a supply of documented and certified sustainable soy and worked with a multi-stakeholder team that included global customers, NGOs, exporters, and U.S. soy growers to develop the U.S. Soy Sustainability Protocol (SSAP). This tool verifies the sustainability of U.S. Soy that is exported and has been positively benchmarked against the European Feed Manufacturers Association (FEFAC) soy sourcing standards and approved by the Tokyo Olympic Procurement Committee for soy sourcing at the upcoming Olympic games, now planned for 2021.
And the demand for sustainability is only continuing to grow. “Right now, during the COVID-19 pandemic around the world, I see more and more international buyers and consumers concerned about where their food comes from and I think sustainability is part of that concern,” Sutter stated. Year to date, 40% of U.S. soy exports are verified under the SSAP, making it the largest sustainability verification scheme in the world.
Long known for its strong emphasis on face-to-face relationships, USSEC has swiftly shifted to virtual events during the pandemic. The organization, which averages about 200 conferences and events per year, has worked hard to maintain connections with its customers and stakeholders virtually. Between April and August, 80 events have already taken place or are scheduled. 25,000 participants have been involved in these virtual events, including influential U.S. decision makers who have served as speakers such as U.S. Secretary of Agriculture Sonny Perdue and Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney. So far, Sutter reports, USSEC has received positive feedback that participants are learning more about U.S. Soy and are anxious to purchase it. “I think right now people are open to innovation and open to new ideas,” he said. According to post-event surveys, 93% of attendees said they learned why purchasing/using U.S. Soy is profitable for their businesses.
Long-term soybean demand is also on the rise. Sutter said global soy demand is growing an average of four percent annually, equivalent to 11 million tons or 400 million bushels per year. “We are going to need the equivalent of another U.S crop to supply the world in 10 years’ time,” he stated.
“What we need is to ensure that the U.S. is operating on a level playing field with our competing exporters and that the U.S. continues to be a leader in openness and reliability as an exporter,” Sutter concluded. “We know our farmers produce a sustainable product and we have a great export supply chain.”