Golden Opportunity

STORY AND PHOTOS BY MATTHEW WILDE

It’s a golden time across the Atlantic Ocean for U.S. soybean farmers.

Not only is it the 50th anniversary of the soy industry’s market development efforts in Europe, but the U.S. has overtaken Brazil as the top soybean supplier in the continent, as well as the Middle East and North Africa. The U.S. is gaining soybean meal market share in the regions, too.

The challenge, farmers and industry officials say, is to maintain and hopefully build on recent growth spurred by the U.S.-China trade war. The 2018 U.S. Soybean Regional Trade Exchange — Europe and MENA (Middle East/North Africa) in late November was geared to do just that.

Nearly 300 soybean farmers and industry stakeholders attended the four-day event in Barcelona, Spain, hosted by the U.S. Soybean Export Council (USSEC). Participants toured local ports, a Bunge crush facility and a feed mill. The conference featured presentations from top-level government and industry officials and networking roundtables for buyers and sellers.

To mitigate soybean export losses to China, Iowa Soybean Association (ISA) President Lindsay Greiner and other farmers talked with soy importers and end users about the value and

quality of last year’s record U.S. crop pegged at 4.6 billion bushels. ISA provided $50,000 for the conference, which sparked other states to contribute so the event could be held, according to USSEC officials.

“I think the potential for growth of soybean exports to Europe and MENA is good, especially as livestock production increases,” says Greiner, a Keota grain and pig farmer. “We’re working to remain the preferred supplier when the trade war with China eventually ends and the day comes when our beans aren’t a bargain anymore.

“It starts with building stronger relationships with buyers,” Greiner adds. “Price is still a key factor.”

Due to Chinese demand, Brazil soybeans are fetching big premiums — $89 per metric ton more, on average, than U.S. oilseeds in October, according to government data. A drought last year drastically reduced soybean production and meal output in Argentina, the world’s No. 1 meal exporter.

As a result, U.S. soybean and soybean meal exports are up 210 percent and 17 percent, respectively, to Europe and MENA as of mid-December since the marketing year began Sept. 1, according to USSEC Regional Director Brent Babb.

Soybean sales for the 2018-19 marketing year to all three regions, led by Europe, are pegged at 3.67 million metric tons or nearly 135 million bushels as of Nov. 8, according to U.S. Department of Agriculture data. U.S. soybean meal exports total 650,000 metric tons (30.2-million-bushel equivalent) for the same period.

Egypt, Spain, Saudi Arabia, Nigeria and other countries have increased purchases of U.S. soy or are relatively new customers.

Lewis Bainbridge, former United Soybean Board chairman, says building and maintaining market share ultimately comes down to what the industry has stressed for 50 years in Europe and 40 years in MENA — the U.S. is a reliable supplier of quality, affordable, sustainably produced soybeans and soy products.

At the Bunge crushing plant in Barcelona, which is located at the city’s port, foreign material in bulk soybean shipments was a hot topic of discussion.

Bunge is the main soy crusher in Europe and Spain, with four plants, including one in Lisbon, Portugal. Spain imports 3 million metric tons of soybeans a year or more than 110.2 million bushels, USSEC data shows. So far this marketing year, all the country’s beans have come from the U.S.: 17.3 million bushels.

“I assured customers we’ll be a reliable supplier and all the farmers I know do a grand job producing clean beans,” Bainbridge says.

Bunge and Cargill crushing plants in Barcelona utilize 220,400 bushels of soybeans per day, USSEC officials say. The facilities produce 5,000 metric tons of soybean meal daily.

BonArea, a vertically integrated cooperative consisting of crop, feed and livestock production and grocery stores in northeast Spain, buys all its soybean meal to feed livestock from the two plants.

While touring BonArea’s Reus feed mill, farmers reminded plant officials about the advantages of U.S. soy in feed rations. Published studies show the high amino acid content of U.S. soybean meal contributes to high digestibility and energy value of feed.

Josep Ribo Ribalta, manager of feed production for BonArea, says economics dictate where crushers purchase soybeans. He’ll adjust feed rations and supplement synthetic amino acids as needed, depending on soy origins. Ribalta likes soybean meal made from U.S. oilseeds.

“We need your help with crops given our lack of production,” Ribalta reassured U.S. farmers. “This year,

U.S. market share will grow since the movement of soy changed with the trade conflict.”

That may evolve, he continued. “In the end, it depends on the crusher and price.”

USSEC anticipates the European Union will buy more than 10 million metric tons of U.S. soy this year, up from 7 million in 2017-18.

“We have the price advantage right now,” Greiner says. “Even if China starts buying from us again, we need to do our best to keep what we’ve gained and continue the upward trend.”

Contact Ann Clinton at aclinton@iasoybeans.com.