US soybean farmers fight trade war by exploring new markets

Global Business

US soybean farmers fight trade war by exploring new markets

In downtown Chicago, a fleet of buses prepared to escort a large group of international visitors through rural parts of Illinois.

CGTN’s Hendrik Sybrandy reports. 

“We have a team of 19 people from the Americas,” said one man from Mexico, one of many soybean buyers from around the world that were about to get an up-close look at how the crop is grown and processed in the top producing soybean state in the U.S.

“Whenever you can see your customer and promote your product, that’s all a plus,” said David Masching, a soybean farmer in Kankakee, Ill., one of the stops on the tour.

First stop was Scoular, a company that takes farmers’ grain and prepares it for market. Until the past few years, close to half of all U.S. soybean exports went to China. Mostly used for pig feed, soybeans have helped satisfy the country’s growing demand for protein.

“China is the big kahuna in the soybean world,” said Jim Sutter, C.E.O. of the U.S. Soybean Export Council.

As Sutter knows all too well, that world has been turned upside down by the U.S.-China trade war, and the 25 percent tariffs imposed on U.S. beans. Ten percent more is set to be added next month.

Soybean farmers have been among the hardest hit by tariffs. Meantime, an African swine flu outbreak is also cutting China’s demand for feed.

“So we have a bit of a perfect storm which unfortunately is a two-sucker punch to the grower,” said Curt Petrich, Chairman of the Specialty Soya and Grain Alliance.

Just as weather often forces farmers to improvise, growers, who tout the quality and sustainability of U.S. soybeans and America’s transportation networks, are now trying to attract new customers in places like Mexico.

“There’s a lot of hog population farms in my area and they’re growing big,” said Ricardo Moreno, a Mexican soybean buyer.

And Indonesia, where the soy food product tempeh is very popular.

“Tempeh is a source of protein for more than 265 million people,” said Made Astawan with the Indonesian Tempeh Forum.

With supply outpacing demand, soybean prices down and China and the U.S. in a trade stalemate, it’s no wonder so many shoppers showed up at Jeff O’Connor’s Kankakee farm.

“We never envisioned this lasting as long as it is but what it’s done is brought a great focus… that there’s a whole lot of other people in the world that need our soybeans,” said O’Connor.

This year’s Soy Global Trade Exchange brought 400 buyers from more than 50 countries to Chicago. The industry’s “What It Takes” initiative to move business to new markets was set back by this spring’s heavy rains.

“We’ve really lost the opportunity to fully make up for the sales to China,” Sutter said.

Brazil has also become a major U.S. competitor. Trade with China hasn’t dried up completely. Some soybeans continue to flow into the country as a result of goodwill purchases made earlier this year. A Chinese delegation even attended the trade show to keep a 38-year relationship going. Still, these are uncertain times for soybean farmers, who feel caught in the middle.

“To bake cake you got to break some eggs and right now we’re the broken eggs,” Masching said.

They’re trying to piece things together, as best as they can.

“We as U.S. soy farmers will continue to persevere,” said Derek Haigwood, U.S. Soybean Export Council Chairman.

“We’re not sitting here waiting to get back China back,” added Sutter.