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Making Connections beyond Borders

The world is full of people. More than 7 billion to be more clear. And that number is expected to stretch to more than 9 billion by 2050. Now, there are several challenges to address between now and 2050. And there is no doubt new, unknown challenges will rise to the surface as well. But one challenge is glaring at us right now. The line has been drawn in the sand and the starter’s gun has sounded in this race against time – Exactly how are we going to feed 2 billion more hungry people?

Luckily, U.S. farmers and ranchers are working hard to solve that problem by incorporating new technologies and best management practices to grow more using fewer resources. U.S. farmers and ranchers are also working hard to strengthen relationships with their end users in an effort to educate them on the quality of U.S. agricultural products.

As a part of the annual AGP Trade Mission, thirteen soybean farmers and state soybean staff traveled to the Philippines in an effort to strengthen the relationships between some of the world’s largest soybean meal customers. According to the USDA, the Philippines is the second-largest importer of U.S. soybean meal. In 2012, they imported nearly $600 billion worth of U.S. soybean meal.

The trade mission includes farmers from five different states including Iowa, Minnesota, Nebraska, North Dakota and South Dakota. Since arriving on Sunday, the group has met with several large buyers of U.S. soybean meal, including Gerald Uygongco, a trader for La Filipina – the largest importer and distributor of U.S. soybean meal in the Philippines.

La Filipina was created in 1901, but was largely destroyed during WWII. After some rebuilding, the company was incorporated in 1971 and has since diversified into several areas including food products, livestock and feed, production agriculture, utilities, logistics, real estates, investments and their own non-profit organization. To help picture the breadth of their reach, La Filipina features services in commodities and business sectors such as fertilizers, wheat and sugar milling, animal feeds, livestock production, cargo shipping, hotels, housing, a shopping mall and banking.

Gerald, who received his education at Iowa State University, said he sees the value of purchasing his soybean meal from the U.S. and will continue to do so whenever possible.

“We have experimented with feeds from other sources before, and the U.S. meal can give a better productivity,” Uygongco said. “In fact, specifically, we can get 3-5 kilos (6.6-11 lbs.) more per pigs of the same age using the same ration. Because of that, even if the price of U.S. meal is a bit more expensive, the higher price is overshadowed by the ability to sell more. We earn a lot more using U.S. meal; therefore we are able to convince buyers to purchase U.S. soybean meal.”

Ron Pavelka, a soybean farmers and livestock producer from Glenvil said he’s sees opportunities like this to meet with foreign buyers as an integral part of relationship building. “These buyers mention that they prefer the quality and consistency of U.S. soy,” Pavelka said, “but that doesn’t guarantee that they will ultimately purchase from the U.S. These trade missions, as well as buyers’ reciprocal visits to our farms in the U.S., allow us to show off the quality of U.S. soy, as well as build relationships that go a long way in sustaining and growing their business.”

AGP_Trade_Mission

With more beans coming online from South American sources, buyers from all over the world are looking at lower price points as a way to drive down costs. However, Uygongco has remained steadfast in his commitment to purchase soybean meal from the U.S. Last year, the company purchased 278,000 metric tons and is looking to drive that up to 320,000 next year.

Although we will face many challenges in the months, years and decades to come, one thing seems to be clear – If the world, and with it the demand for more protein, is going to grow, U.S. soy is going to play a major role in that growth. Trade missions like these continue to demonstrate the value of building relationships for the future. That’s progress powered by U.S. farmers.