USSEC works to build preference for US soy beyond China

The U.S. Soybean Export Council is tasked with building a preference for U.S. soy globally, and Jim Sutter, CEO of USSEC, hopes to build on the work through a couple of initiatives.

The “What it Takes” initiative helps in identifying and diversifying international markets such as Nigeria, Pakistan, Egypt and Bangladesh for U.S. soy. Sutter said this initiative was put in place prior to the start of the Chinese trade war when the soybean exports to China dramatically decreased.

“That really led us to focus our efforts on many of our other customers around the world—Europe, Japan, Korea, Mexico,” Sutter said.

At about the same time, they started a marketing campaign, “keep exports great, keep U.S. soy exports great.” In it delegation members traveled to about 20 different countries, putting on seminars.

“(We) really did promotion on the U.S. soy advantage, talking about the quality of our soybean meal, the meal from U.S. soybeans, which has enhanced amino acid concentration and strong energy levels,” Sutter said. “We talked about the oil quality, which has great stability and a longer shelf life in the finished product.”

They also discussed the sustainability of U.S. soy and how important it is to raise it that way.

“In some markets—the fact that we produce our soy in such a sustainable way, thanks to the great practices that farmers use—it’s very important to them,” he said. “Some markets don’t care so much.”

Sutter said mature markets like Europe and Japan want to know how their food is produced.

“We have a great message for them from the U.S.,” Sutter said.

The USSEC is currently working on their Soy Excellence Centers, which aim to help build demand for protein. The four virtual learning centers in emerging markets are part of the Ag Trade Promotion Program, a new program rolled out by the U.S. Department of Agriculture as part of the Market Facilitation Program.

“We’ll be able to speed up our efforts to teach people in countries, especially in these emerging markets, these low consumption countries today how to better produce protein for themselves, so better to grow chickens or fish or whatever animals they have,” Sutter said. “Meat producers, we’ll be able to go in and have an opportunity to teach them how to do that more effectively, how to produce feed more effectively, just all the steps throughout the chain that are required to consume soy.”

Sutter hopes the centers will be able to concentrate and expand efforts in these countries.

“We need to be doing everything we can to grow alternative markets to China,” Sutter said. “We want to get back into China. We think we will, but we want other markets as well. We don’t want to be dependent on one market and we’re not, but we want to just grow these other markets around the world.”

He believes it will be good for U.S. soy and is excited about the Soy Excellence Centers.

China remains an important market for U.S. soybeans, and Sutter sees it as a very important agreement.

“It finally got us out of the trade war that we were in,” Sutter said. “It has some very ambitious goals for new purchases that China will be making; increased purchases of U.S. agricultural commodities, of which we expect soybeans to be a significant portion of that. So we’re very optimistic that we will see good things come from that.”

There was some initial disappointment when Chinese purchases didn’t happen right away when Phase One was signed, but that has since faded some with the promise of China taking applications for companies to apply for tariff-free waivers to be able to import.

“Which was a critical step that needed to happen,” Sutter said. “Because remember, in Phase One, they didn’t actually remove the tariffs. They just committed to make purchases.”

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It’s been thought all along that without removing the tariffs, they weren’t going to make purchases.

“USDA, USTR said just leave it to the experts in China,” he said. “They’ve committed to make these purchases, they’ll figure out how to do it, and they were exactly right. So here, now they’re going to provide these tariffs for free waivers for importers.”

That’s an important step, Sutter said.

“I think we will probably only see imports really start to happen in a big way when we get to later in the season,” he said.

South America is in its soybean-shipping window, and Brazil is just harvesting their crop.

“Normally, we don’t ship a lot to China at this time of year; our shipping season will start again in September,” he said. “So I’m optimistic we get these tariff waivers in place. Maybe we’ll see some sales happening in the next few months. But then we’ll see a lot start to happen September forward.”

What are the implications for other markets because of the Phase One agreement? After the signing of the agreement, Sutter was optimistic to see some of the tension in the world go down because of the end of the trade war and more robust economic growth.

“Now, obviously, the COVID-19 or coronavirus situation is putting some question marks around all of that,” Sutter said. “But at least we don’t have the trade war, also casting a shadow of doubt on things.”

Sutter thinks it’s very important the two largest economies in the world have found a way to stop having a war and get back to a sort of normal trading relationship.

“I think it’s very important that that was done,” he said. “I think it’s a very important agreement and I’m so glad that it is signed, and behind us and now we’ll just get into the execution of it.”

USSEC worked towards a particular marketing strategy in 2019, and hopes to continue their efforts to try and shift some more marketing resources and promotional dollars into what they call emerging markets.

“So places where there’s not much soy imported today, or they’re just starting to be soy importers, but they have large populations, low per capita consumption of protein and economic activity going on,” Sutter said. “So places where we think that they have real potential for growth in the future.”

Places like Nigeria, where they’ll have their first-ever buyer’s conference. Sutter hopes to have buyers from the entire West Africa region.

“They’re not big importers today, but they have big populations,” he said. “They have low consumption of protein and their economies are improving so they fit our definition. We think there are places for the future.”

Egypt is another place where they’ve seen really good results because of their growth in protein, poultry consumption and aquaculture production.

“They’ve grown over the last six years to become our No. 3 market for whole soybeans,” Sutter said.

Likewise in Pakistan and Bangladesh, they’ve “seen really nice growth.”

“So those are the kinds of things we’re focusing on, in addition to continuing to manage our relationships in places like China and other mature markets,” Sutter said.

Kylene Scott can be reached at 620-227-1804 or [email protected].