Soybeans are in a sweet spot to take advantage of emerging markets

While the world economy struggled through COVID-19, the soybean industry did not.

September’s WASDE and crop production reports showed U.S. production at the equivalent of 1 million metric tons per day. U.S. Soybean Export Council CEO Jim Sutter says that this puts soybeans in a sweet spot.

“60 percent of the soy that leaves one country and goes to another ends up in China,” Sutter said. “That makes them a real powerhouse, in terms of the overall global trade in soybeans.”

China did not begin importing soy until 1995, but Sutter says that the Phase One Trade Agreement has been a good thing.

“As far as the actual trade goes, I think it’s unlikely that China will import half of the two year commitment of the Phase One deal in the first year. I think that was their intent all along,” he said. “The deal was signed in January, they had a lot of business already on the books with South America supplying them the first half of the year, but we are seeing this really pick up. We have a record level of shipments and open sales at this time of the marketing year.”

As trade with China begins to pick up, USSEC has been working to diversify trade opportunities with emerging markets.

“These are places that have large populations, growing economies, and very low per capita consumption of protein. We believe those will be the markets of the future,” Sutter said. “We see as people’s incomes rise they want to consume some more protein and they want to consume some more cooking oil, and soybeans are a perfect fit to deliver that.”

Those markets include Egypt, Bangladesh and Nigeria. Sutter says that the key to advancing the growth is sustainability, something the United States is known for through its family farms.

“You don’t get to be a fourth, fifth, sixth generation farm if you’re not farming sustainable,” he said.