The American Soybean Association (ASA) believes its many years of farm and trade policy work, and its long history of building export markets, has been largely responsible for the record level of U.S. soybean exports reported last week by the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS).
In its year end report, USDA/FAS announced soybean exports exceeding 30.449 million metric tons (MMT), equivalent to 1.118 billion bushels, for Marketing Year (MY) 2007/08, which ended Aug. 31, 2008.
China was again the largest buyer of U.S. soybeans at 490.6 million bushels. The European Union-27 was second with 143.1 million bushels; Mexico was third with 131.3 million bushels; and Japan was fourth with 99.5 million bushels. Collectively, these four buyers represented 77 percent of total U.S. soybean exports during MY 2007/08.
As the policy advocate for U.S. soybean producers, the ASA advanced soybean production and exports through market driven farm bill legislation, trade agreements that brought down trade barriers, and new biotech soybean seed introductions that did not disrupt soybean exports.
"ASA’s work on farm policy in the 1990, 1995, and subsequent farm bills provided U.S. soybean producers with the planting flexibility that allowed soybean production to expand in response to market signals," said ASA President John Hoffman, a soybean producer from Waterloo, Iowa. "U.S. soybean planted acres have expanded by almost 30 percent in the past 18 years, from 58 million acres in 1990 to nearly 75 million acres this year, while U.S. soybean exports more than doubled from 557 million bushels in 1990 to this year’s all-time record 1.118 billion bushels."
China, the largest importer of U.S. soybeans, purchased 17 percent more U.S. soybeans this year compared to last year. China’s accession to the World Trade Organization (WTO) was essential to improved market access for U.S. soybeans.
"ASA’s work with U.S. trade negotiators on China’s accession to the WTO prevented China from imposing a quota and higher tariffs on soybean imports," Hoffman said. "Today, China’s soybean imports are more than 10 times greater than the quota that ASA and U.S. negotiators blocked. Further, ASA opened its China office more than 20 years ago to provide technical services to China’s poultry and livestock producers, and to promote U.S. soybean and soy product exports."
ASA’s work with seed companies and foreign regulators to ensure that new biotech soybean varieties were brought onto the market without disrupting export markets was a major contributing factor behind this year’s record exports.
"The EU was our second largest customer for U.S. soybeans this year," Hoffman said. "The EU purchased eight percent more U.S. soybeans this year compared to last year. ASA’s biotechnology education and outreach programs, and its work with biotech companies to obtain international clearances in major export markets before new biotech soybean varieties are launched, have been critical to the continued success of U.S. soybean and soy product exports in Europe and other major soy markets worldwide."
ASA’s work with U.S. trade representatives are also responsible for passage of Free Trade Agreements (FTAs) that have allowed U.S. soybean exports to expand through greater market access. For instance, ASA championed passage of the North American Free Trade Agreement (NAFTA), which has enhanced U.S. soy exports to Canada and Mexico.
"Under NAFTA, U.S. soybean exports to Mexico have doubled," Hoffman said. "ASA’s work brought down tariffs on U.S. soybeans and soy products, which paved the way for Mexico to become the third largest buyer of U.S. soybeans, and the second largest buyer of U.S. soybean meal. Under NAFTA, Canada has become the largest buyer of U.S. soybean meal."
ASA was also heavily involved in Senate passage of an historic trade agreement between the United States, the Dominican Republic, and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Commonly referred to as CAFTA-DR, the deal is benefiting U.S. agriculture in general and soybean producers in particular. Economists estimate the deal will boost U.S. agricultural exports by $1.5 billion when fully implemented.
ASA established its first overseas marketing office in Japan in 1956, and since that time, Japan has been a consistent and valued buyer of U.S. commodity soybeans and soybean products, and accounts for a major segment of U.S. production of high-value Identity Preserved (IP) food grade soybeans.
"With cooperator support from USDA, the ASA set out to establish a presence in Japan and organize a coalition of Japanese business interests with which ASA could partner," Hoffman said. "More than 5.8 billion bushels (158 MMT) of U.S. soybeans have been exported to Japan during the past 52 years."
Over the last 17 years, global demand for soybeans has grown 2 times faster than demand for corn, 6 times faster than demand for rice, and 8 times faster than wheat demand. The reason? Rising incomes worldwide have increased demand for meat, milk and eggs, which in turn have increased the need for soybeans to supply the protein required in livestock feed rations.
"Worldwide demand for food, feed and fuel is supporting higher prices paid to U.S. farmers for their soybeans," Hoffman said. "According to today’s WASDE report, the average farm price for soybeans this year is around $10.15 per bushel, up from $6.43 last year. Although much of this increase is offset by higher input costs paid by farmers for fuel and fertilizer, I am very optimistic about the future of U.S. soybean production and I believe ASA is well-positioned to meet the challenges ahead."