Market participants expect Chinese demand for corn and soybeans to continue rising, but a recent trade mission to the country provides a strong reminder of their growing appetite. Leaders with the Iowa Soybean Association (ISA) returned earlier this week from a trade mission to China and say the consensus is "if we can grow it, they will buy it."
Grant Kimberley, ISA Director of Market Development, tell us one Chinese feed mill manager expects China's soybean imports to rise from about 60 MMT to 80 MMT in the next three to five years, along with corn imports rising to 20 MMT to 30 MMT annual. Kimberley pointed us to a blog posting that serves as a diary of the trip that reads:
Iowa Soybean has cultivated a strong relationship with Zhu Kunming, who runs aquaculture farms and soybean processing. "Chairman Zhu" as he is affectionately called by American friends, is a man of small stature but huge enthusiasm. He talks loudly, walks quickly, engages everyone and makes any room buzz with his presence.
Chairman Zhu hosted our group for the most newsworthy dinner of the trip and a reason it is important to enter into social settings to converse with business leaders. We were sitting around a very large round table with the traditional glass lazy Susan to bring all dishes within reach, when one of our soybean leaders asked what Chairman Zhu thought China’s soybean imports would be in five years. He gave a calculated answer through our interpreters. "Eighty millon metric tons of soybeans, from all sources." That keeps the trend line going up but is still hard to fathom since China was a zero in the 1990’s and moved only to thirty million in 2008. This year they are at sixty million so the trend line flattens a bit but still continues its climb. He then said: "We will also buy thirty million tons of corn!" At that the room buzzed as growers and ag leaders had gotten a credible industry estimate that matched the high hopes of market analysts and dreams of trade promotion groups.
Following the meeting, Kirk Leeds, ISA CEO, took the affirmative on the soybean argument and agreed that the projection was well within reach in five years as it matched up with expanded feed usage. Bill Northey, Iowa Secretary of Agriculture, saw the growth in corn as "large, but realistic" with China already showing that it was not able to expand corn production even though it was shrinking soybean acres to do so.
There will be much more number crunching in the months and years ahead but Chairman Zhu stating to those who sell soybeans to him that he is going to buy much more in the years ahead, indicates the Chinese demand for protein is not slowing and the economic benefit of expanded meat production is high.
Jeff Stroburg, CEO of West Central Cooperative, based in Ralston, Iowa, called these: "Good times for U.S. farmers and a bright future ahead."