OSC Reps Explore Asian Market

October 6, 2015 Ohio Soybean Council

Good customer service can go a long way and create valuable returns, whether it is a restaurant, an airline or even foreign trade. International markets play an important role in the supply and demand chain for U.S. soybeans and the best way to maintain and grow those markets is with happy customers.

In late July, a group of representatives from the Ohio Soybean Council (OSC) spent a week in Asia to meet with current consumers of U.S. soybeans and explore potential opportunities for new partners. Those involved were Steve Reinhard, OSC board member and Treasurer from Crawford County; Dave Dotterer, OSC Board Member and Demand Committee Chair from Wayne County; Tom Fontana, OSC Director of Research and Education; and Kirk Miller, a global consultant contracted with OSC.

The group began their journey in Tokyo where they were joined by Paul Burke, who serves as the North Asia regional director for the United States Soybean Export Council (USSEC). USSEC serves as an international marketing partnership for stakeholders in the U.S. soybean industry. They work closely with foreign partners to create and expand the uses of U.S. soybeans.

While in Tokyo the group visited a number of customers utilizing Ohio soybeans including a container port facility that handles soybeans coming into Japan and a tofu manufacturing facility. While non-GMO, or food grade, soybeans are considered a niche market, they represent around 10 percent of Ohio’s soybean crop – a significant amount compared to other states.

“We met with customers in Japan who already purchase Ohio food grade soybeans to thank them and encourage them to continue importing our soybeans,” said Dotterer. “They indicated they have been pleased with the quality of our soybeans and expressed interest in the possibility of new varieties being developed in the future.”

Japan is a very important customer of Ohio food grade soybeans. Being high in protein with a desirable sugar profile, Ohio farmers produce high quality food grade soybeans desirable for making tofu and soymilk. Keeping up with the demand for new varieties is one of the reasons OSC works closely with researchers at The Ohio State University including Dr. Leah McHale, who heads up the soybean breeding program.

In China, there continues to be some opposition to approving specific traits developed with biotechnology, including high-oleic varieties and those with 2-4D herbicide resistance.

“Approval of biotechnology will be very important to the future and continued growth of the sale of U.S. and Ohio soybeans to China. We met with several groups to listen to their concerns and work toward an understanding of this issue,” said Dotterer. “USSEC has been working on biotechnology approval and other projects to increase China’s demand for U.S. soybeans.”

One of those projects focuses on the Chinese aquaculture industry and technology that will allow them to raise fish more efficiently and more intensively with less of an environmental impact. Intensive pond aquaculture utilizes feed derived from soy and integrates in-pond raceways, or simulated rivers. Increasing aquaculture production is a necessity to feed China’s growing population and an opportunity to increase market share for U.S. soybean farmers.

“Much of the soybeans exported to China are actually used for animal feed. We visited a swine processing plant and feed mill while we were there. It’s great to be so far away from home and see Ohio soybeans being processed for feed,” said Dotterer.
The group also met with leaders at the American Embassies, in both China and Japan, who briefed them on the current political and economic outlook and the impact on the future of soybean imports.

“Overall, we had a lot of good conversation about the future of the market in the next 3-5 years and the type of protein and oil content, as well as quality, they are looking for in soybeans. There are a lot of companies that want to buy U.S. soybeans and that translates to great opportunities for Ohio farmers.” said Reinhard.

The USSEC predicts China should be importing 4-5 million more metric tons of commodity grade soybeans per year for the next 3-5 years, primarily for feed, as the rural population moves to urban areas. In that time span, it is also possible their demand for food grade soybeans will exceed their domestic production of soybeans for human consumption and open doors for more imports.

“These opportunities are possible because of relationships that have been built over the last 10-20 years between Ohio soybean farmers and international customers. OSC has been funding projects for a number of years to help grow the market and more recently USSEC has expanded the efforts,” said Reinhard. “But when all is said and done it comes down to the fact that Ohio grows good quality soybeans. We have the right climate, the right soils, and the right people involved. The quality is consistent, transportation and logistics are stable. It’s relationships, good quality and good service.”

Article Tags: Global Utilization