The U.S. Soybean Export Council’s (USSEC) North Asia region is comprised of China, Japan, Taiwan, and Korea and is home to 1.5 billion consumers and a growing middle class. Paul Burke, USSEC regional director for North Asia, discusses a demand for U.S. Soy that’s growing alongside prosperity in a region where per capita soy consumption is the highest in the world.

Q: How is U.S. Soy used in North Asia?

A: After it’s crushed, U.S. Soy is primarily used in the animal feed industry, feeding pigs, chickens and fish. North Asia is a very large soybean meal marketplace. We’re basically feeding the pigs, chickens and fish that consumers buy. In addition, the consumers use soybean oil to cook that meat. And frequently they’re adding soy sauce and soy paste to it. So they’re consuming soy for breakfast, lunch and dinner.

Q: What attributes do North Asia buyers look for when selecting soy?

A: They are looking for a reliable, consistent supply. The U.S. provides that every year. They also look at the quality of the soybean meal; amino acids, consistency in digestibility and in protein levels. It’s a reliable ingredient for feeding their animals.

Q: How important is sustainability to customers in your region?

A: Sustainability is a new concept in the region. More and more people are beginning to recognize how they can use it in their marketing messaging and to add value to their product without having to pay more for it. It will become an important factor as we move forward.

Q: How would you describe the relationship between the U.S. Soy industry and North Asia buyers?

A: The U.S. soybean industry has been active in North Asia for 60+ years. Our first office was opened in Japan in the 1950s. Over the course of those years, we’ve played a critical role in providing management expertise and transfer of technology to the feed and food industries. We’ve had a long-term relationship with the trade in North Asia. That’s the crushing industry, importers, animal feed industry, down to the value-enhanced soy processors. Only through a long-term relationship can you play that beneficial role of providing information that they need, addressing the technology gaps they have. That’s how USSEC services the market.

Q: It sounds like relationships are integral to the U.S. Soy business?

A: Relationships are an intangible aspect of everything we do. It’s critical to develop that personal relationship between the U.S. suppliers and the importers and end-users. This is something that the U.S. soybean industry does on a much larger scale than our competitors. Having activities that bring together the suppliers, the sellers, the importers and the processors is critical to developing mutual trust and understanding. 

Q: Is this why North Asia buyers find it worthwhile to make the long trip to the United States to tour U.S. soybean farms?

A: They come to the U.S. because they want to see what the crop looks like. They want to get out in the fields, they want to measure from their own perspective what they’re hearing in the media and they want to hear the producer’s perspective. The U.S. farmer is a small business person who puts his livelihood on the line every day by the decisions he or she make about how they’re going to plant, what they’re doing to market their crops, and how they’re going to price what they take to market. That information is highly sought after by importers and processors.

Q: Other than meeting U.S. soybean farmers, what reasons do North Asia buyers have to be confident in their decision to buy U.S. Soy?

A: North Asian importers and processors have a high degree of confidence in the U.S. Soy supply system because they’ve seen year in and year out that the U.S. is able to supply their needs. One good example, in 2012 we experienced our last very serious drought in a large area of the United States. Yet we were still able to bring to market the fourth largest soybean harvest in history. That demonstrates the reliability of the U.S. Soy supply.

Q: Would you say the future is bright for U.S. Soy demand in North Asia?

A: Looking into the future in North Asia, there’s a lot of upside. The obvious player is China. We see the Chinese population, about 300 million people, moving from the countryside into the city. They’re going to increase their incomes and improve their diets, their demand for animal protein and vegetable oil. That’s like moving the population of the United States from a lower-income livelihood to a middle class livelihood. Imagine if 300 million people in the U.S. were to increase their animal protein and vegetable oil consumption by 30 percent. That’s the upside potential and we’re going to see that in the next ten years. 

Q: Any growth areas besides China?

A: Korea is a large country with a large middle class and their Gross Domestic Product is growing about 4 percent per year. They’re going to continue to improve their diets. They’re going to continue to want access to U.S. Soy products, identity preserved products, but also soybean oil. I also think there’s good potential that Korea will be the number one import market for U.S. soybean oil.

Q: Can you share an example of a challenge USSEC helped a customer solve?

A: There was a situation in which the Chinese aquaculture sector was experiencing a bottleneck in growth. We were wondering how to continue to expand the utilization of soybean oil in the marketplace. We collaborated with Auburn University, introducing a technology called Intensive Pond Aquaculture, or raceway aquaculture. This has the potential to break the bottleneck in terms of expanding the yields farmers will receive, also lowering their costs in a highly sustainable way. The farmers in China rapidly recognized this technology and are adopting it very quickly. This is one small example of how U.S. soybean farmers, with support from USSEC, are solving problems for the industry for North Asia and increasing the utilization of U.S. Soy. 

Q: If you were talking to a prospective buyer who had not yet tried U.S. Soy, why would you encourage him or her to consider it?

A: When an importer asks why he should purchase U.S. Soy, the first thing we talk about is the U.S. soybean farmer being a committed partner to them in their future success. Then we talk about the U.S. Soy Advantage. We want them to be confident that the U.S. Soy industry is going to continue to provide them with what they need.