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Iowa strengthens Taiwanese soybean ties

By Staff | Oct 2, 2009

Signing a trade agreement Monday morning for the next two years is Don Elbernd, president of the Iowa Corn Growers Association. Looking on is Yau-Kuen Hung, chairman of the Feed and Industry Association in Taiwan. The signing was held in the foyer of the new headquarters facility of the Iowa Soybean Association in Ankeny.

ANKENY – Fifteen members of a goodwill trade mission gathered at the new Iowa Soybean Association building in Ankeny Monday to sign a letter of intent to continue importing U.S. soybeans through the next year.

With the mural of an idyllic Iowa farm scene serving as a backdrop, the ceremonial letter-signing took place in the new building’s foyer. The event in essence committed the Taiwan delegation, who represented soybean traders, processors and livestock feeders, to purchasing 3.2 million metric tons of soybeans, about 118 million bushels in 2010 and 2011. That is equivalent to about 25 percent of Iowa’s entire harvest. The value of the purchases is estimated between $1.35 billiion to $1.44 billion.

Taiwan is the fourth largest importer of U.S. soybeans, said Grant Kimberlkey, ISA’s director of market development. He said China, Mexico and the European Union rank in the top three, with Taiwan and Japan rounding out as fourth and fifth, respectively.

Kimberley said the delegation from Taiwan is just one of many to tour through Iowa and the Midwest annually. In October, preparations are underway to receive trade delegations from the Philipines, Vietnam and China.

Don Elsbernd, a corn grower from Postville and president of the Iowa Corn Growers Association, officially signed the agreement.

“We appreciate the trade relations we share with Taiwan,” Elsbernd said, “and this agreement signed today reiterates our commitment to providing a quality supply of corn.

“As our fourth largest customer, we see this agreement as critical to our corn industry in Iowa and we think it shows their satisfaction with the product we are providing.”

Delbert Christensen, a soybean grower from Audubon and president of the Iowa Soybean Association, signed the agreement on behalf of Iowa’s soybean growers. He participated in an ISA trade team which visited Taiwan earlier this year.

“This completes the cycle,” Christensen said. “After we visited some of these customers earlier this year, hoping to get a trade agreement, they’ve now made a return trip to visit us and to solidify our relationship and their intent to purchase Iowa and U.S. soybeans. We have accomplished our goal for making that visit.”

Sen. Charles Grassley was also on hand for the ceremony. He thanked the visitors for their intention to purchase high quality U.S. products at a reasonable price.

“Trade is a two-way street,” Grassley said. “We are thankful that you are here to buy our agricultural products. We also appreciate your products we can buy. This is the way to expand the world economy and benefits everyone throughout the world.”

“Personal relationships are very important,” Grassley added. “They are good for the economy and for human understanding, which in turn is important to world peace.”

Ceremonial events like Monday’s, Kimberley reiterated later, are important to strengthen the trade relations between the two countries. “In time,” Kimberley said, “in the future, it’ll lead to more business.”

Kirk Leeds, ISA’s chief executive officer, said it’s essential for the Asians to know that they are recognized as valuable trade partners. “It’s all about personal relationships,” Leeds said.

Although Monday’s agreement is non-binding on the Taiwanese, “They always meet, or exceed their obligations,” Kimberley said.

He added that the U.S. understands that when their foreign customers have walked on the farms, saw the harvesting, and processing and understands how the beans get from here to there, “it builds a customer preferrence for our soybeans.”

Kimberley noted that even if soybean prices are slightly under the U.S. price, many of their foreign clients will still buy U.S. soybeans. “But if the price is way different then but for much of the marketing year, we can compete.”

The U.S. has seen record exports of beans for three consecutive years and six years in the past 10.

In 2009, total soybean exports tallied 1.21 billion bushels, up 11 percent over 2008. That is equivalent, Kimberley said, to 54 percent of the total soybean crop.

“And the livestock industry both foreign and domestic –is still the biggest user of soybeans,” he noted.

These numbers emphasize how crucial exports are to the overall soybean industry. “A few years ago,” Kimberley said, “we said, ‘every third row of soybeans was exported.’ Today, it’s every other row.”

Leeds said the U.S. has also worked hard to retain Taiwan as a preferred trading partner. “They’ve been in the U.S. market since 1949,” Leeds noted. “Yes, they buy some South American beans, but they prefer to buy U.S. beans because we have a consistent product and we deliver.”

The Taiwan agricultural Trade Goodwill Mission stopped in Washington, D.C. and corn growing states of Indiana and Iowa. Their tour will conclude in Illinois and Missouri.

Contact Larry Kershner by e-mail at (515) 573-2141, ext. 453, or by e-mail at kersh@farm-news.com.

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