SAN ANTONIO — The markets for soybeans are big and bright — deep in the heart of Texas, as well as around the world.
Leaders of the American Soybean Association emphasized the importance of exports and predicted better days ahead at Commodity Classic in San Antonio.
ASA President Bill Gordon, Chairman Davie Stephens and Vice President Kevin Scott answered questions about the recent truce in the trade war between China and the United States that limited markets and, subsequently, caused a drop in the selling price of soybeans in 2018 and 2019.
Bill Gordon, ASA president
Worthington, Minnesota
In addition to farming, you also own Worthington Tax and Business Services. So, you’ve seen how the trade war has affected not just famers, but your entire local economy.
“You look up and down Main Street across the country, you’re starting to see belts tightening up, farmers not going to town, they’re not spending as much money out to eat, they’re not spending money on new vehicles, they’re not trading, they’re keeping what they have and that’s really affecting the economy as a whole in the rural communities. We’re starting to see it kind of snowball.
“But on the bright side of that, there’s still optimism. These trade deals, the biodiesel tax credit, all these different things are starting to show optimism to farmers. At the end of the year, I started to see those farmers actually go out and look at new equipment, looking at trading on maybe new or used equipment. All that spurs the economy. If we can get these prices back, it’ll help.”
What is the pulse of soybean growers following the United States-Mexico-Canada Agreement and “Phase 1” of the United States-China trade deal?
“There’s definitely those that are suffering, but there’s still optimism. Farmers are historically optimistic. So, when we look at 2020, we’re trying to forget 2019 — I don’t know if we’ll ever quite forget 2019 for all the things that got thrown at us. But, really, 2020 is a new start. Every year is a new start for farmers.
“They’re looking at these trade deals not only as a factor into purchases, and that’s what’s going to give us a short-term price increase here coming up, but it’s the long-term biotechnology intellectual property right transfer, things for the next generation. You talk about sustainability in farming. For us, it’s generational sustainability, helping my sons and daughters farm in the future. This will help that.”
You talk a lot about market access and market development. What have you witnessed in your experience with the World Initiative for Soy in Human Health and U.S. Soybean Export Council?
“WISHH is a phenomenal part of our soybean association. Look at what they did in Ghana. They went from a country that was barely able to feed itself to being way more self-sufficient and moving into the USSEC category of trade and now we’re in Cambodia and we’re looking at aquaculture projects. Just the number of people. Pakistan. Afghanistan. All these different things with WISHH that help the people that need help and that teach them how to farm, teach them how to be businesspeople. We want to move them into USSEC and really help them develop their market and move to the next level.
“It was awesome to see USSEC a couple years ago really strategically change their focus of just being in China and a little bit of a presence in other parts of the world, and we’ve really expanded that right at the correct time, right before the trade war. We’ve seen enormous growth in Egypt. We had Bangladesh part of the Agricultural Trade Promotion Program funds that the U.S. Department of Agriculture gave us.
“There are success stories all over for USSEC and WISHH. We’ll continue to work on those in the future.”
Davie Stephens, ASA chairman
Clinton, Kentucky
How are these new trade agreements with Mexico and Canada and with China protecting the future of U.S. soy and all of U.S. agriculture?
“It’s taken a while to get here, but it’s good that we have gained and had some accomplishments along the way. I’m really proud that ASA put that effort forward in representing the soybean farmer not only in individual states, but as we look at the United States as a whole and creating that messaging of how we do that.
“When we talk about China, it’s our largest export market of soybeans — and what a market it is. With this ‘Phase 1,’ before we can really enjoy the full benefits, it’s going to take a while. It was frustrating last year a few times when they quit talking, because if two people talk, something is usually going to get worked out one way or the other. So, that’s a win. The $80 billion over two years is huge for farmers.
“When you look at the USMCA, that’s our No. 2 and No. 3 export markets of soy. Really, when you look at these two countries and what that longstanding relationship has been, we’re taking this and moving it to the next level. You’re really able to show them how good the U.S. soybean is in its value. We undoubtedly grow the best bean in the world.”
There has been a lot reported even in consumer media about the decisions being made in the courts and throughout companies that produce glyphosate and neonicotinoids and chlorpyrifos. What is ASA’s philosophy on crop protection and responsible farming?
“Crop protection in general is one we’ve always advocated for and making sure we hold ourselves responsible for what it is and how it affects our environment. We’ve always relied on science-based facts of how that’s measured, not just assumptions. That’s one thing we hope that goes forward.
“As we look at glyphosate, it’s very valuable to a farmer. It’s valuable not only to a farm in Kentucky, but in Minnesota, in South Dakota or anywhere across these United States — making sure we keep that out there and available for what is used in a lot of people’s everyday life, not just farmers. We want to make sure we represent that.”
Kevin Scott, ASA vice president
Valley Springs, South Dakota
We just got good news on the Mississippi River dredging project. The Army Corps of Engineers’ work plan includes funding to increase the ship channel from 45 to 50 feet. Why is that project important to ASA and other ag groups?
“People would think that the 5-foot extension of the depth of that channel would not mean a whole lot, but it means taking a boat from 70,000 metric tons up to 80,000 metric tons. Anytime you can add that type of improvement in our shipping, it’s a great thing.
“Infrastructure in general in the United States, we’ve had the advantage over our competitors for a number of years. As the Corps is taking an interest in dredging and so forth, those are all things that have been needing to be done. Our locks and dams have been an issue. They are taking an interest in that. We need to keep an advantage over our competitors in the soybean industry. Infrastructure is the one place where we can do that yet, but it needs to be monetized.
“Brazil is going to continue to improve their infrastructure. So, if we don’t keep up, we will be behind.”
Why is biodiesel so important to soybean growers?
“As most people know, the two products from soybean crushing are the meal, which is our animal feed, and we can get rid of that fairly easily, and the oil, on the other hand, which is a major component. Twenty percent of the bean is oil. Without the biodiesel industry we would have huge stocks of oil. It would be a drag on the market instead of a plus. Currently, biodiesel adds about $1.10 per bushel to the price that farmers receive for soybeans. It’s very significant. We can’t underestimate what that does for us.
“Currently, the biodiesel industry is intending to grow. That would be a positive, also. If they can take the biodiesel numbers and double what they’re currently doing, then we can also increase our crush here in the United States, feed more livestock and export livestock instead of beans and that would be the best for us.
“The oil could be used in many, many things. The high oleic thing is coming along very well right now and that is going to be used in binders in road construction projects. Theoretically, that will be also a huge use for soybean oil. We need all those things working together not only pricewise for us, but for the country — cleaner air and having an alternative fuel is an excellent thing.”
ASA throughout 2020 is celebrating its “First Soy Century.” What do you see in the next 100 years?
“It’s a significant milestone for us. Thinking about 100 years ago what the guys in our position were talking about, and it wasn’t trade. It was, ‘What is a soybean? How do we use it? How do we use it in feed?’ They were just learning how to use the product. That has changed so much in 100 years.
“I get the opportunity to be the first president of the next 100 years. We volunteer for this position to make the industry sustainable for the future. That will be my focus. I think that ASA’s focus for the next 100 years will be keeping the industry viable.”