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Soybean producers continue to watch trade situation anxiously

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Midwestern farmers are seeing soybean prices fall as the U.S. and China remain at odds over trade and tariff issues.

Kirk Leeds, chief executive officer for the Iowa Soybean Association, says soybeans are one of Iowa’s top crops and this continued spiral in prices is disheartening. “China is very, very important for Iowa farmers,” Leeds says. “From soybean farmers in particular, they buy about 60% of all the soybeans traded in the world. Anything that causes a potential disruption in our ability to sell high-quality soybeans to a customer like China is very, very concerning.”

The initial concern came when the Trump Administration threatened to put high tariffs on steel and aluminum coming from China and China responded with threats of raising tariffs on a list of American goods, including soybeans.

“None of these tariffs are yet in place but just simply the threat of tariffs and counter-tariffs has been enough to drive soybean prices down,” Leeds says. “As you all know, at a time when farmers are already struggling to make ends meet, to have this kind of potential disruption in trade is very, very concerning.” Leeds says he and other members of the Iowa Soybean Association are in contact with the Iowa delegation in the U.S. House and Senate.

“The administration has promised that they will take a look at some way to compensate farmers for the loss of income,” Leeds says. “I’m kind of skeptical that we’re going to find anything that they’ll actually follow through on and anything that’s WTO-compliant. So, it’s really troubled times and uncertain times.”

Leeds says they’ve gotten tremendous support from both Iowa U.S. Senators Chuck Grassley and Joni Ernst as well as from the U.S. Ambassador to China, Terry Branstad, a former Iowa governor. Leeds says he’s taken around 25 trips to China over past 35 years, working to develop the trade relationship.

(By Pat Powers, KQWC, Webster City)

 

Iowa corn representatives host Asian Pacific rim trade team

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Roger Zylstra

A trade team from nations in the Asian Pacific rim is in Iowa this week, visiting a pair of ethanol plants, touring farms, and a feed mill in Grinnell.

Iowa Corn Board Promotion Director Roger Zylstra is hosting the group of government and industry representatives on his farm near Lynnville. He says they’re mainly interested in dried distiller’s grains, or DDGs, a byproduct of making ethanol.

“We’ve got a big feed mill here that feeds all of our local pigs and they use quite a bit of DDGs through that place,” Zylstra says. “They’re going to visit that mill and they’re going to visit our farm and talk to us about how we incorporate the DDGs into the feed.”

He says this visit takes on high importance, given the recent trade tensions between the U.S. and China. Zylstra says it also gives Iowa growers a chance to reestablish good relations with the Asian Pacific nations.

“We’re going to be the reliable supplier and we’re going to try to get the governments on both sides to cooperate as much as we can,” he says. “We’re here to provide the DDGs, the corn, the soybeans, the pork, whatever they need.” Zylstra says it’s a thrill to host these visits.

“That’s what Iowa Corn and the U.S. Grains Council, we’ve worked for years and years to establish and build the markets and the relationships that we have and continue to put a lot of emphasis on that,” he says. The trade group is also scheduled to stop at the Iowa Corn office and Iowa State University in Ames.

(By Jerry Oster, WNAX, Yankton)

 

Senator Grassley expresses support again for NAFTA

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Senator Chuck Grassley.

Ending the North American Free Trade Agreement would be, in a word, “catastrophic” to the Iowa economy, according to Iowa Senator Chuck Grassley.

The trade deal between the U.S., Canada and Mexico was reopened last summer for renegotiation. President Trump has made repeated critical comments about NAFTA and Grassley says the White House is well aware of his stance on the subject.

“Not only Senator Ernst and me but most agricultural state senators have made very clear how important NAFTA is to prosperity in agriculture,” Grassley says. “Just in Iowa’s case, Mexico would be the leading importer of Iowa corn.” Grassley remains optimistic the president will preserve, not scrap, the agreement.

“I don’t think that he’s going to end NAFTA,” Grassley says. “I think there’s tough negotiations going on now for the next two months.” Grassley explains why there’s a looming, unofficial deadline to complete efforts to fine-tune the trade deal.

“If there’s an agreement, it almost has to be made in the next two months, by the end of March,” Grassley says, “because you get into provincial elections in Canada, you get into national elections in July in Mexico and you get into our own midterm elections.”

President Trump mentioned NAFTA in passing during his speech Monday at the American Farm Bureau convention, only saying he’s “working very hard to get a better deal for our country and for our farmers and for our manufacturers.” NAFTA talks resume later this month between the three nations.

 

Trade trip increases optimism for return of ethanol, poultry exports to China

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Members of an Iowa trade delegation to China are expressing optimism that markets for trade of several products will be reopened with that country.

One of the big items is ethanol and the byproduct from the production of ethanol known as dried distillers grains or DDG’s.

Iowa Corn Growers Association president Kurt Hora, spoke about the issue during a conference call from the country.  “To be able to gain market access for those two products would be huge here in China. We know what a difference they’ve made to our livestock and our environment there in Iowa, and we know we can help them make a difference here,” Hora says.

He says they are also hoping to get broader acceptance of biotech corn. “We’ve been able to utilize biotech traits and looking for approval of the rest of the traits that’s helped us clean up our water and clean up our environment there in Iowa,” Hora says. “And we hope that they will embrace those traits and accept them so we can use them worldwide and get them over here.”

Iowa Ag Secretary Bill Northey.

Iowa Ag Secretary Bill Northey says China used to be a major importer of DDG’s, and Iowa as the nation’s leader in ethanol production has felt the loss of that market. “Losing that market for the DDG’s has impacted the profitability of our plants. Ethanol itself needs to come in here this market as well. There’s additional taxes recently on ethanol — so that is extremely limited now,” Northey.

The avian influenza outbreak that struck Iowa caused China to stop importing those birds. Iowa Turkey Federation executive director Gretta Irwin says she had some good talks with the Chinese representatives.

“The experience I think has been very mutual and very warm and friendly,” Irwin says. “And so for us in the turkey industry to have that opportunity to someday hopefully sell back into China a safe quality turkey product to meet their growing need for protein is very exciting for us.” It is the first trip for Irwin to China. She says they discussed importing turkeys for use in homes and also for commercial use.

“We’re seeing some very strong interest in fast food restaurants in China to be adding some turkey products,” Irwin explains. “So I am leaving here very optimistic and just very exciting for everything that we’ve been seeing here. It’s been an exceptionally wonderful experience.” Discussions are also underway on other poultry products such as chickens and eggs.

Kevin Stiles of the Iowa Egg Council says there are talks of exporting chickens from both countries. “I think we are in agreement that there are opportunities for U.S.D.A. to closely evaluate that opportunity for them to ship cooked poultry into the United States,” Stiles says. “And I think they realize that there are also opportunities for regionalization so that we can resume (shipping) poultry and poultry products into China.”

The regionalization he mentioned involves Chinese officials inspecting individual areas of the United States that were free from avian influenza and could import products. Stiles says they hope to eventually be able to export eggs to China.

“Several people we talked to thought that that was an opportunity. We’ve got some protocol that needs to be put in place,” Stiles says. He says they see that more of a long-term opportunity three to five years down the road. Stiles says the Chinese officials have been pleased with the added biosecurity since the bird flu outbreak and that has made the export of poultry more possible.

“We are getting close, I think they are appreciative of all that we do to guard against further outbreaks of avian influenza and limit any outbreaks that might occur,” Stiles says. “And so there’s a renewed confidence in our biosecurity efforts in Iowa and the entire United States.” Governor Kim Reynolds led the delegation to China.

Governor and commodity groups discuss several trade issues while in China

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Iowa Governor Kim Reynolds (in red) along with Ambassador Branstad and commodity representatives.

Governor Kim Reynolds spoke with reporters this morning from China where she hosted an Iowa reception along with representatives of most of the state’s commodities groups who are on the trade trip with her.

“We had about 150 people join us. It was a great opportunity for our commodity groups to meet with industry partners. We were blessed to have Ambassador (Terry) Branstad and his family join us for the reception tonight,”Reynolds says. Reynolds says they have also been visiting various agricultural operations in China.

“We had the opportunity to meet with the mayor of Shanghai and to continue to talk about partnerships and visit an aquaculture farm where the Iowa Soybean Association actually invested in technology to help with the production of the aquaculture at decreased cost and increased output,” according to Reynolds.

The governor says they talked about the reopening of the Chinese market to U.S. beef and how they want to continue to expand in that area. She says they also talked about export issues involving soybeans, corn and poultry.

“I think the group would share the sentiment that they felt that again progress had been made but that they needed to continue the dialogue to continue the resolution to continue moving opportunities forward,” Reynolds says.

Iowa Agriculture Secretary Bill Northey is also on the trade trip. Northey says having former Governor Terry Branstad take over as Ambassador to China makes a big difference in this trade mission. “And then to be able to see him absolutely totally engaged in his role as ambassador. He looks as natural as can be in that ambassador role. You realize how important it is for him to be in the position of this very important trading relationship and political relationship between the two biggest countries in the world — and then to have this great Iowa connection,” Northey says.

Northey says Branstad’s position and then having all the commodity groups together on the trip along with the governor has been a good thing. He says it has created many opportunities for conversations that they would probably not been able to have if they were traveling alone. Northey characterized the talks as “high level.”

He says the conversations have spanned many agricultural areas and that shows the importance being placed on agricultural trade from the federal level. “I also do believe that some of this that has been happening — whether its the biotech events, the beef trade, the rice opportunities that there are — rice isn’t going to impact a lot of Iowa farmers, but it certainly was movement toward better trade with China. Some of that is because the administration has pushed so hard to move some things that have been stuck for awhile,” Northey explains.

The conference call this morning happened at what was roughly 10 o’clock in the evening in China.

(Photo courtesy of the Iowa Soybean Association)

Tama plant first in Iowa to be approved to send beef to China

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Black Angus beef from Iowa Premium.

A meatpacking plant in Tama is the first in the state to receive approval to export beef to China.

The approval for Iowa Premium comes two weeks after the 13-year ban on U.S. beef imports to China was lifted. Iowa Premium CEO Jeffrey Johnson says the approval process is pretty similar to getting approval to ship anywhere else.

“The U.S.D.A. looks at your quality assurance assessment programs and your export verification programs, also there’s some grade labeling programs. They look at all of our programs — assess them and if they meet the standard for shipping to China — then they approve us,” Johnson explains. Johnson says they process Black Angus beef that they will send to China. He says the Chinese like all of the cuts from the cow.

Workers at the Iowa Premium plant in Tama.

“That’s the thing that we think is a good advantage for the beef industry in China, that they do take a breadth across the carcass. They don’t just take the middles, they don’t just take the ends, the take a good mix and China is going to be a real good partner for the beef industry,” Johnson says.

Johnson says they hope to send out the first shipments in a couple of weeks.

“We’re going to start with two container loads a week, hopefully build up to 4 to 4, so anywhere from 800,000  pounds to a million pounds a month,” according to Johnson. “Iowa Premium wants to have 34 percent of our meet going overseas. Because there are customers that want family farm raised Black Angus beef.”

Johnson doesn’t think starting up imports of beef again to China will impact the prices here in the U.S. “Cattle production if you look at the numbers is up across the U.S…I think that the industry is ready for the Chinese consumer,” he says. “It’s been coming, so the whole chain has to be prepared for it.” Iowa Premium has already been shipping some of its beef to other countries.

“South America, of course Japan is a great customer of ours today. We ship meat there every week,” Johnson says. The Tama plant employs 851 people right now working five days a week. Johnson says they can handle increased demand from China by adding a little more production to what they are already doing.

“Right now we do 5,500 head, we’ll do 6 days 6,600 head, and then we made do an additional 100 head a day just depending on the volume that we do. The company is built for expansion without building onto the building,” Johnson says.

He says they get all their cattle form family farmer-feeders in Iowa and neighboring Midwest states. Iowa Premium took over the closed plant in Tama three years ago and renovated and reopened it.

Photos courtesy of Iowa Premium.

Soybean growers back in Iowa after trade trip to China

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A delegation of Iowa soybean growers and industry officials is back in the state after a week-long trade trip to China.

Kirk Leeds, CEO of the Iowa Soybean Association, says the Iowans, including state Agriculture Secretary Bill Northey, met with Chinese officials to discuss growing agricultural trends between our nations.

“China’s been a tremendous growth country for the United States for a number of years and today, the Chinese buy 60% of all the soybeans traded in the world,” Leeds says. “It’s an important customer.” While Iowa is the nation’s top hog producer with about 23-million hogs a year, Leeds says China produces 600-million hogs a year and one of their primary feeds is soybean meal.

“The Iowa Soybean Association heads to China about twice a year to meet with customers and potential customers and to make sure that Iowa and U.S. soybeans are meeting the needs of the industry,” Leeds says. “We also go to make sure we understand the opportunities for growth.” President Trump will meet with China’s president tomorrow in Florida. Leeds says there is much attention focused on that meeting.

“There’s a lot of issues on the agenda from trade issues that are important to agriculture, certainly to North Korea and a number of other issues,” Leeds says. “There’s a lot of anticipation. Actually, there’s a lot of questions as we traveled across China about Mr. Trump, what’s he really like and does he really mean the stuff that he says.”

There is some worry, Leeds says, that the rhetoric from the presidential campaign is not reflected in trade policy. Leeds says he’ll be on another trade trip to China this summer. By then, it’s likely current Iowa Governor Terry Branstad will be the new U.S. Ambassador to China.

(Reporting by Pat Powers, KQWC, Webster City)

Senator Grassley concerned about Mexico and corn sales

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In response to Trump administration policies, a Mexican senator plans to introduce a bill directing that nation to stop buying American corn in favor of corn from Brazil and Argentina.

Iowa Senator Chuck Grassley says U.S. farmers should be concerned about the threat and he plans to discuss the situation today  in a Capitol Hill meeting with the head of the National Trade Council.

Grassley says, “That’s one of the points I’m going to make, that you’ve got to be pretty cautious about these renegotiations of trade pacts that we don’t get retaliation against agriculture.” Of the three key economic categories of manufacturing, agriculture and services, Grassley says agriculture is the only one where the U.S. has a surplus, or more exports than imports.

The North American Free Trade Agreement was agreed upon in 1994 by the U.S., Mexico and Canada, an agreement President Trump referred to as a “disaster” during the campaign. Grassley suggests when NAFTA was ratified, there may’ve been a different sentiment about America’s strengths.

“The United States is the #1 economy in the world,” Grassley says. “We can give a little more than we get, and maybe what Trump is up to is modifying that so the United States isn’t so much a giver nation now than it was.” President Trump met Monday in Washington with Canada’s Prime Minister Justin Trudeau. Trump said he wants only small changes in NAFTA in regards to Canada, adding, the bigger issues will be with Mexico.

“We already had a free trade agreement with Canada before we negotiated the three-way NAFTA agreement,” Grassley says. “We have pretty good trading relationships with Canada and I’m not sure we can do much better.”

Iowa is the nation’s top corn producer and Mexico is one of the top buyers of American corn. In 2015, Mexico bought nearly $2.5 billion worth of U.S. corn. Compared to 20 years before, just after NAFTA was signed, Mexico bought $391 million worth of U.S. corn in 1995.

Senators Grassley and Ernst react to president’s order on Trans Pacific Partnership

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Senator Chuck Grassley.

Some Iowans are worried about the impact on the state’s billions of dollars in exports after President Trump signed an order Monday to pull out of talks on the Trans Pacific Partnership.

Iowa Senator Chuck Grassley says trade is vital to several Iowa industries, chiefly agriculture, manufacturing and services.

“You’re playing with fire when you talk against trade agreements that maybe could be better for the United States,” Grassley says. “I wouldn’t make any judgments that Trump’s wrong for trying to get a better deal for America. If he can do that, I’ll support that.” Iowa exported more than 13-billion dollars in products during 2015 and Grassley fears Trump’s action could hurt the Hawkeye State’s options for overseas trade.

“Particularly with Japan, I think it will,” Grassley says, “but if he follows it up quickly with some sort of bilateral negotiation with just Japan, particularly to help agriculture, it would fill that vacuum.” Iowa sent one-point-one billion dollars in exports to Japan in 2015.

The TPP involves the U.S. and 11 other countries, including Canada, Mexico, Peru, Australia, New Zealand and Singapore. As promised during the campaign, Trump signed an executive order which pulls the U.S. out of future negotiations on the proposed partnership.

“It may sound like I’d just be blaming Trump maybe hurting Iowa,” Grassley says, “but let me tell you, TPP would’ve had a very difficult time in the Congress getting a majority vote even if Obama was president.” Grassley says people will appreciate that the new president is trying to get a better deal for American products.

“Who can argue with that, but we don’t know yet, but he’s going down that road,” Grassley says. “We’ll just have to wait and see. I hope he’s successful. In the meantime, I hope he doesn’t hurt American agriculture in the process.” Many agriculture commodity groups, including the Iowa Corn Promotion Board, supported the TPP as a way to stimulate trade.

Senator Joni Ernst.

Iowa’s other U.S. Senator, Joni Ernst released this statement on the action:

“I am disappointed in today’s executive action to withdraw the United States from TPP. With one in five jobs in Iowa dependent on trade, access to new markets is critical to our state’s economy.

“However, we must not let this stop our country from pursuing increased trade opportunities for our exporters. With the growing demand for our agricultural products across the world, it is imperative that we ensure a level playing field for American farmers and manufacturers to have a fair opportunity to compete in these markets.

“Under this new administration, I will continue to advocate for ways to work together toward a stronger trade agenda on behalf of Iowans.”

Iowa Ag Secretary expects more focus on farming from Trump administration

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Ag Secretary Bill Northey visits with Bill Tentinger of Le Mars.

Ag Secretary Bill Northey visits with Bill Tentinger of Le Mars.

President-elect Donald Trump won strong support during last week’s election from voters in rural America and Iowa Secretary of Agriculture Bill Northey thinks the new administration will put a new, much-needed focus on farmers and farming.

“I think there will be a lot of attention paid to agriculture,” Northey says. “I don’t think that means new support programs or those kinds of things. I think it’s just going to be a very free market-oriented administration, not looking to spend extra dollars but definitely looking at rolling back regulations that aren’t doing what they should be doing.”

While Trump is on record saying he doesn’t like most, if any, of the current trade agreements, Northey does not think it means Iowa’s many millions of dollars in ag exports are in jeopardy.

“In some cases, the trade agreements have been very, very important and in some cases, certainly there is enforcement that could be better,” Northey says. “Maybe future trade agreements can be better than what they are but we need trade.” Northey, a Republican, sees trade agreements as being highly beneficial to agriculture, especially to Iowa agriculture.

“I’ve heard some folks for President-elect Trump that have said they’re supportive of trade,” Northey says. “They need better enforcement and if other areas saw as much positive for trade as agriculture did, they would have been in favor of trade deals.” Northey says Iowa is “a good example of the things that can work” with respect to international trade.

(Story and photo by Dennis Morrice, KLEM, Le Mars)