USSEC grows markets and increases options for U.S. soy growers

Janna Fritz recently returned from Jakarta, Indonesia—her first trip there—where she attended the Southeast Asia U.S. Agricultural Co-operators Conference and spoke about the value and high quality of United States soybeans.

Indonesia is a large and growing market for U.S. soybeans. In 2024, it bought $1.24 billion worth. Tempeh, a fermented soy tofu product packed with essential nutrients including protein, fiber, iron, calcium, magnesium, and B vitamins, is a staple food in Indonesian cuisine.

Most U.S. beans Indonesia imports go for human consumption, due to their superior genetic qualities, including high protein and a better amino acid profile.  The lower-quality Brazilian soymeal that Indonesia also imports goes mostly toward animal feed

Fritz is board chairperson of the U.S. Soybean Export Council, which celebrates its 20th anniversary under that name this year. It’s the overseas marketing arm for U.S. soybean growers, and as Fritz explains, it’s been fostering relationship for 50 years counting precursor organizations. Whatever you call it, it means U.S. growers are forming connections with potential buyers overseas and telling the story of U.S. soybeans. It’s a story that has been successful in establishing the high reputation of U.S. soybeans. The demand is always there, even if uncontrollable factors like the strength of the U.S. dollar affect overseas sales.

“U.S. soybeans are actually quite competitive on the international markets right now,” said Fritz, due in part to a slight decline in the dollar’s value against other currencies. Carlos Salinas, USSEC’s executive director for East Asia who is based in Shanghai, concurs.

“The soybean story in recent years has not been negative,” Salinas told High Plains Journal. The U.S. shipped more soy products, including meal, in 2024 than the year before. Salinas recently conducted an informal survey among foreign buyers of U.S. soymeal, asking them whether they had increased or decreased their inclusion rate—the ratio at which soymeal is added to the animal feed mix. About 50% of them had increased the inclusion rate. Of the 28% who said they decreased it, their reasons were often logistical rather than anything to do with the meal itself.

For instance, Puerto Quetzal is Guatemala’s largest port on the Pacific Coast, but it is overloaded, not well managed and lacks sufficient storage capacity, so soymeal buyers who must use it find it uneconomical.

“Soymeal is an expensive feed input, and it doesn’t pay for it to sit too long in storage,” Salinas said.

Some countries that have a high demand for U.S. soymeal eventually develop their own crush industries.  It happened in Egypt and Vietnam, Salinas said. But there are important economic reasons why it’s a heavier lift in destination markets. The cost of capital is higher in those countries.

“A crush plant in Des Moines, Iowa, has access to virtually all world markets, and also the U.S. domestic market. A crush plant requires a big up-front investment on the order of $300 million to $400 million. Discount rates here are better than overseas.”

What about the recent news that Brazil is withdrawing from an international agreement not to clear rainforests for new soy plantings? A Brazilian court is considering a lawsuit from ag interests contending that the agreement amounts to unlawful restraint of trade, according to Brazilian antitrust laws. But Salinas believes that even if the withdrawal is allowed to stand, economic factors argue against a big expansion of acreage in Brazil.

“The incentives are not there for much more clearance. All the best land has already been cleared; the areas they want to clear are less productive.”

He said a Rabobank study forecast only a 1% acreage growth in Mato Grosso. The same dollar fluctuations that make U.S. soy more attractive on world markets can reduce the profit Brazilian growers receive.
Nor does Salinas give too much credence to Argentina’s announcement that it is suspending export taxes through October, right at the height of U.S. harvest season, which makes Argentinian soybeans more attractive to buyers.

“It’s not a long-term strategy,” he said. “It may be an attempt to get some cash in the short term. Farmers have to operate on a longer time window.”

Of course, what China does or doesn’t do will always matter. “You can’t ignore a market responsible for 60% of all soybean purchases globally,” Salinas said.

He speaks of the warm reactions he continues to get from Chinese agricultural officials. That’s not surprising—USSEC had a presence in China for 11 years before a single U.S. soybean was sold there.

The bottom line for U.S. soy growers is that despite trade tensions, they continue to have a lot more options to market their soybeans and soymeal both overseas and domestically than their competitors do. And USSEC is working every day to increase those options.

David Murray can be reached at [email protected].