Global endeavors

December 12, 2024 | Jeff Hutton

Market development efforts have created opportunities for soybean here and abroad

How do you showcase the power of soybeans, its many uses and reach a global audience?

It began in the early days of the Iowa Soybean Association (ISA) and with the establishment of the soybean checkoff. Opening up trade and seeking new opportunities were part of those efforts and they continue today.

ISA’s focus

“The Iowa Soybean Association is working to deliver new markets and opportunities for Iowa’s soybean farmers,” says Matt Herman, ISA chief officer for demand and advocacy.

Both Herman and Grant Kimberley, senior director of market development at ISA, noted that after more than a decade of sustained demand, China’s appetite for U.S. whole beans has leveled off due to declining population growth and increased whole bean export competition from Brazil.

But ISA and industry partners continue to look for new opportunities for Iowa soybeans, both at home
and abroad.

“As the industry contemplates diversification from whole bean exports to China, we are also looking to supply global markets with an expanding supply of soybean meal as a rapid expansion of renewable diesel in recent years has driven a projected 25-30% expansion in U.S. soybean crush from 2020-2028,” Herman says. This includes new facilities in Iowa and other expansions in and around the state.

With increased supplies of soybean meal comes new opportunities and challenges. In anticipation of expanding supply of soybean meal, major processors like AGP, Cargill and CHS have plans to expand export terminals in Grays Harbor, Wash., Kalama, Wash., and in the Port of Houston.

“The Iowa Soybean Association, through its investment in the Soy Transportation Coalition, is proud to support their efforts to help the public ports that house these large export facilities win public grants to fund railroad track expansion to facilitate greater volumes of rail cars,” Herman says. “These new terminals will help supply a growing demand for U.S. soybean meal from the Philippines, Vietnam, and Thailand and capture more market share in Central America, Middle East and the European Union.”

While livestock feed will continue to be the major demand driver for soybean meal, ISA and its partners at other state checkoffs and the United Soybean Board are driving development of numerous new high-value, sustainable products from soybean oil and soybean meal, Herman and Kimberley say. As consumers have become more health conscious in recent years many are seeking more sustainable, often biobased products. 

Herman and Kimberley agree that historically, the development of soybean oil-based petroleum products took center stage. This was a relatively easy entry into the market, they contend, given soy oil’s close chemical similarity to petroleum. A product which ISA invested in the development of through their partnership with Airable Research Lab is now the top selling bar and chain lubricant on Amazon. In addition to consumer facing products ISA has also supported the development of asphalt roof sealers, fiberglass epoxies and biofuels from soybean oil.

Today with a greater supply of meal and lower prices, there is more interest in soy products.

“Recently, the checkoff helped support the development of a soy meal-based, PFAS- (a carcinogen) free firefighting foam,” says Herman. “This product has recently been demonstrated at a number of Midwest fire departments and is available for burn trials for Iowa fire departments upon request.”

Crushing for the future

U.S. agriculture consultant and soybean crush expert Gordon Denny of Brighton, Colo., says market development opportunities abound with soybean crushing.

“U.S. soybean processors have spent over $8 billion in new and expanded crush capacities in recent times,” he says. “This ‘value add’ to locally grown soybeans ensure a better cash basis at the farm level, less trucking cost, more demand and competition for Iowa farmers soybeans, and a better product mix for being competitive against South America.”

By providing renewable diesel and sustainable aviation fuels feedstock, Iowa farmers are helping reduce the carbon intensity of transportation, Denny says.

“And with AGP, Emmetsburg in 2004 and Sergeant Bluff a few years ago, Shell Rock in 2023 and Platinum Crush this past May, processors have increased local Iowa soybean demand by more than 100 million bushels annually,” he says. “That number doesn’t include the additional expansions/upgrades at most other existing plants in Iowa.”

Denny says Iowa is well positioned to grow, process, transport and feed the most sustainable soybean meal in the world. The flexibility to “on shore” the additional millions of tons of soybean meal to North American markets is a key geographic and transportation advantage.

The growth of U.S. crush is improving profitable opportunities, increasing the availability of soybean meal, improving the quality of soybean meal and lowering the relative price of soybean meal, Denny notes.

“This lowers food prices and improves the diet of Americans and the world we feed,” Denny says. “Oil is subsidizing protein.”

No stone unturned

Amb. Allen Johnson can recall the early days of ISA, its efforts to promote soybeans and its importance on the world stage.

“When I was at the ISA, we were going through a farm bill and we were also going through the establishment of the national checkoff,” he says. “We knew we needed to sync up our farm policy and deal with a significant increase in our checkoff dollars.

“Of course, one of the challenges was accomplishing the mission of the checkoff and growing markets, while promoting market development and research and making sure Iowa farmers knew what you were going to do with their money,” he says.

Johnson later departed ISA, worked in the private sector for a few years and then from 2001-2005 served as the chief agricultural negotiator in the Office of the U.S. Trade Representative (USTR) for the George W. Bush administration. He has since followed up those market development and trade efforts with the formation of his company, Allen F. Johnson & Associates, based in Washington, D.C.

Johnson says market development efforts must continue to focus on trade opportunities for the agricultural sector.

“In looking toward the future, one of the challenges is having a consistent trade policy that will continue to open markets,” he says.

And with relations with China strained, a renewed focus on markets beyond China.

“With other markets, we can see opportunities and we must go after them,” Johnson says. “U.S. trade policy facilitates diversification into these other markets. The more markets you have, the bigger markets you have, the more reliable markets you have. We need not be overly dependent on a certain market.”

But where are those markets?

Johnson points to Southeast Asia, South Asia, the Americas and Africa as market opportunities.

Despite the geopolitical realities of what’s happening with China or concerns about war in the Middle East and Ukraine, these target regions Johnson cites are ripe for U.S. soybean expansion.

“We can’t change the reality of what is happening, but let’s work on those areas of the world that makes sense given the geopolitical environment we’re in and regardless of who is leading the administration,” he says.

Johnson says Southeast Asia and South Asia are hungry for U.S. soybeans, as are the Americas where a “tightening up of those relations” with the United States would be positive.

Virtually all countries in Southeast Asia are potential growth areas for U.S. soybeans, Johnson says, including the Philippines, Indonesia, Thailand and Vietnam.

Africa, meanwhile, is experiencing tremendous growth, he says.

Agriculture must not focus solely on the next financial reporting period, but long-term, he says.

“When you look at Africa, the population growth is tremendous, whereas in China and Japan, it’s declining,” he says. “The EU remains steady, but in the Americas, I believe in the future it will be just as important as China is now.”

Johnson says trade agreements in the recent past, like the Central American Free Trade Agreement and the United States-Mexico-Canada Agreement could be blueprints for future agreements with regions like the Americas and Africa.

“If you want to get good deals, you have to be engaged,” Johnson says.

Over the last 10 years or so, the U.S. has been “sitting on the sidelines,” Johnson says, when it comes to trade. That has only benefited U.S. competitors and adversaries.

The United States, with support from soybean farmers in Iowa and other states, need to start negotiating again to find deals that are comprehensively good for all parties and other sectors of trade policy like manufacturing.

“Doing great deals makes everybody feel good,” he says.

Promoting quality

ISA District 7 Board Member Scot Bailey, who serves as chairman of ISA’s Demand Committee, says getting more soybeans to new markets around the globe is paramount to being successful.

“We need to crack into these markets,” he says, noting that many countries have proclaimed the superior quality of U.S. soybeans.

“They’ve told us if they could get U.S. beans all the time, they wouldn’t have to change the formulation for the diets of the livestock they feed,” says Bailey, who farms near Anita.

In the future, Bailey sees the European Union being a market opportunity because buyers there are concerned with deforestation in Brazil and Argentina.

“We need to show them (EU buyers) that our soybean production is not a result of deforestation, and we can use that in our favor,” he says.

Promoting other environmental practices will also appeal to markets concerned with how soybeans are produced, giving an edge to the United States.

“That’s something we can promote to other countries,” he says.

Thank you Iowa!

Johnson says the potential to create good trade deals and create opportunities for market development and research was part of the reason there was the push for a soybean checkoff years ago.

He gives credit to the ISA and CEO Kirk Leeds for making these things happen, and also praises Iowa’s soybean producers.

“I’m not surprised with what has happened, because I’ve always been impressed with Iowa soybean farmers on how open they are in doing things,” Johnson says.

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