ISA CEO Kirk Leeds offers his insight on the way home

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Kirk Leeds interviews Iowa Lt. Governor Judge

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Kirk Leeds interviews ISA President John Heisdorffer

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Kirk Leeds interviews ISA Secretary Brian Kemp

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Kirk Leeds interviews ISA Director of Market Development Grant Kimberley

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Here are some extra videos and photos we didn’t get a chance to post during the trip. Enjoy.

by Kirk Leeds, CEO of the Iowa Soybean Association

Our final day in Istanbul was spent as tourist looking at this incredible city and sites of immense historical significance. I only wish I had spent more time reviewing world history so that I could more fully appreciate things that we saw today. The city where Europe meets Asia seems to have historical structures around every corner and up every hill.

We started our day by visiting the Blue Mosque which was built in the 17^th century and is the only imperial mosque with six minarets.  The blue tile interior was unbelievable.

The Sultan Ahmet Mosque interior

We also visited St. Sophia, a Byzantine basilica built in the 6^th century. Yes, that is 1500 years ago! Simply awe inspiring to stand inside and wonder how they could have built such a structure 1,000 years before Columbus sailed to the Americas. Our tour guide kept referring to is as the 8^th wonder of the world.I would not disagree.

Nearby we visited the Basilica Cistern built in 532. This vast underground water cistern is a beautiful piece of Byzantine (Roman Empire) engineering. Its 336 columns are arranged in 12 rows of 28. The cistern was cleaned in 1987 and when several feet of mud was removed, the original brick payment and two marble Medusa heads at the base of two of the columns were found. One is setting upside down and one is lying on its side. No one seems to know why they were not laid upright. The cistern was used in the filming of the James Bond movie, “From Russia with Love.”

We then had the opportunity to explore the Grand Bazaar, one of the largest covered markets in the world with more than 58 streets, over 1,200 shops, and has between 250,000 and 400,000 visitors daily. It is well known for its jewelry, pottery, spice, and carpet shops. Many of the stalls in the bazaar are grouped by type of goods, with special areas for leather coats, gold jewelry and the like. The bazaar contains two bedestens (domed masonry structures built for storage and safe keeping), the first of which was constructed between 1455 and 1461 by the order of Sultan Mehmed the Conqueror. The bazaar was vastly enlarged in the 16th century, during the reign of Sultan Suleiman the Magnificent, and in 1894 underwent a major restoration following an earthquake.

We concluded our day by taking a dinner cruise on the Bosphorus River which literally divides Europe and Asia. A perfect way to finish our trip by viewing marble palaces, ancient wooden villas of Ottoman architecture, remnants of Roman castles and the lights of this beautiful city.

by Kirk Leeds, CEO of the Iowa Soybean Association

It is Friday in Istanbul, Turkey and it has been a sunny day. Unfortunately, we spent most of the day inside a conference room. However, we did get outside this evening and had dinner as a group in another excellent Turkish restaurant, this one with outside seating. Once again, way too much food, but interesting, and most of it was very good. However, this far into a trip such as this one, you do begin to look forward to getting home to eat a more traditional American meal.

The purpose of the conference today was to learn more about opportunities for increased soybean exports to Turkey and other countries in the region. Our first two speakers were both with the US Consulate office here in Istanbul. They helped us understand that even though the United States and Turkey have been strong military and diplomatic partners, issues related to trade between the two countries has not received as much attention and that trade between us should be much larger than it is. One of the challenges is that many people struggle to understand Turkey and Turkey’s culture as it is partly European and partly Middle Eastern. Turkey has been trying to join the EU, but many believe that its population of 72 million (which would make it the second largest country in the EU) causes great concern by many current members of the EU.

To emphasize the lack of US focus on this market, it was noted that there hasn’t been a US Secretary of Agriculture visit to Turkey for at least 35 years. They asked our assistance in encouraging Secretary Vilsack to make a visit to Turkey in the near future. We agreed to pass along the invitation.

With their modern poultry sector, Turkey needs soybean meal as they have virtually no soybean production in the country. It was great to hear the industry representatives thank soybean farmers and the American Soybean Association for its work over the years to introduce modern practices into the country’s poultry industry.

The consulate staff also helped us understand that even though Istanbul is a modern, bustling city that if we were to travel south and east in Turkey we would quickly see a whole another side of the country. SE Turkey (bordering Northern Iraq) is an area of great poverty with many peasants. It is an agricultural area but is barely able to produce enough food to feed the local residents. As in many parts of the world, there is great disparity between the haves and the have nots in Turkey.

We also discussed the influence that Greenpeace and other activists groups are attempting to have on Turkey’s policies toward biotechnology. The industry has been successful in beating back efforts to have the government approve restrictive language, but the battle continues. The good news is that the consumers in Turkey have not yet been unduly influenced by EU politics.

Dirk Jan Kennes, an analyst with RaboBank in the Netherlands provided his thoughts on the long-term outlook for global agriculture. They believe that it is clear that the world will need to increase food, feed and biofuels production by 1.1 billion tons in the upcoming years. Although there are still a number of hectares around the world that can and will come into production, this increased production has to come 1/3 from additional land and 2/3 from increased yields.

RaboBank sees slower growth in meat consumption in the future. Not negative growth, just slower growth. The impact on the slowdown will not be on the volume of meat consumption, but on the value of the meat consumed as consumers will chose lower cuts of meat and more poultry and less pork and beef due to comparative cost.

In summary he argued that we are entering into a period of less profitability due to higher finance costs and lower margins and increased risk due to volatile raw material prices. Long-term sourcing will become a more strategic issue that will impact business models and relationships.

American Soybean Association –International Marketing (ASA-IM) staff from across the Middle East were then introduced by Regional Director Tim Burleigh. Each provided an update on key markets in the region by location and by product category. Overall, the Middle East region imports about 100 million bushels of soybeans each year and the US has 60% of that market. The region has great opportunities for future growth particularly in poultry and aquaculture production. Political instability is always a concern in many parts of the Middle East.

We finished the day by visiting an international poultry expo in the Istanbul Expo Center. The conference brochure claimed that they expected 8,000 attendees over the course of the expo with 283 participating firms exhibiting. These firms were about 40% from Turkey and the 60% from other countries. We walked the expo exhibit and had discussions with a number of key US soybean customers.

Tomorrow we have time to go visit the Grand Bazaar which I am told is the oldest market in the world. Should be an interesting experience. We head for home very early on Sunday morning.

ISA CEO Kirk Leeds interviews ASA-IM Middle East Regional Director Tim Burleigh

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ISA CEO Kirk Leeds interviews IDED’s Marketing Manager, Mark Fischer

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ISA CEO Kirk Leeds interviews AGP International Marketing Representative Peter Mishek

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ISA Kirk Leeds interviews ISA Director of Market Development Grant Kimberley

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by Kirk Leeds, CEO of the Iowa Soybean Association

Today was mostly a travel day as we left Budapest this morning and took a Hungarian Airline’s flight to Istanbul, Turkey. Was a bit nervous about using my temporary passport, but after just a couple questions at the ticket counter and again at the security screening, I was good to go. Immigration guy in Istanbul just wanted to know why I was traveling on a temporary passport. Once I explained that I had lost my passport, he let me pass. Shouldn’t be a problem getting on the airplane on Sunday to fly back to U.S. through Munich.

First impressions of Istanbul are very favorable. A city with a very long and important history, it was more modern and certainly cleaner than I had anticipated. A busy city, yet not overly crowded. On the bus ride from the airport to the hotel, did get to see remnants of the ancient walls that use to surround the city and an aquifer system still in use after hundreds of years.

Tomorrow we spend in meetings getting a number of market briefings from AGP staff and staff with the American Soybean Association – International Marketing (ASA-IM). We will learn more about AGP’s efforts in this country of 70 million and more about ASA’s efforts across the region. Should be an informative day. Late tomorrow afternoon we are going to be attending an international poultry fair where ASA-IM is exhibiting.

The Pauer Gyula memorial in Budapest

by Kirk Leeds, CEO of the Iowa Soybean Association

Today was our last full day in Hungary as we prepare to fly to Turkey on Thursday morning. It has been a busy week of meetings and bus rides.

The group spent the day touring dairy farms on the way back to Budapest from Harkany. The first farm was a very modern farm that had received a significant grant from the European Union as part of an EU development programs. The other farm was an older farm and the owner had been working on the farm for 40 years, including several years under the communist communal system. I believe that his father had owned the farm before the communist took position of all property in Hungary after WW II. Both farms are struggling to make a profit.

I had to peel away from the group today to get my new passport as I lost my old passport after we arrived in Budapest. After spending a good portion of today waiting for a new one, low and behold when I checked back into the same hotel in Budapest that we stayed when we first arrived on Sunday, the front desk handed me an envelope with my old passport. The taxi company that we used when we landed in Budapest found it in the van and remembered that they had dropped our group off at the hotel. So now I am the proud owner of two US passports. However, they tell me that if I try to use the old one I am likely to have some problems with the friendly security people at the airport.

Since I had to wait a couple of hours for the U.S. Embassy to print a new passport, I had some time to walk the streets of Budapest. It was really the first time I have had since arriving in Hungary to see any of the sites. The Embassy is near the Hungarian parliament building and the Danube River so I went looking for a memorial that I had heard existed along the banks of the river.

Like other countries in Europe, Hungary’s Nazi period is one of unimaginable tragedy. It is estimated that 600,000 Jews were killed in Hungary as part of the Holocaust. Some of these victims were lined up along the edge of the Danube River in downtown Budapest and were shot, with their bodies falling into the river. In 2005, 60 pairs of cast-iron shoes were attached to the concrete edge along the river as a reminder of the tragedy that occurred on the banks of the Danube River.

A small plaque on the ground nearby is the only explanation for the shoes. I also found it noteworthy that if I hadn’t been on a determined search for the memorial, I would have never found it. I had to cross a four-lane highway with no crosswalks and climb over a short guard rail in order to find the display of shoes. There were no signs directing anyone to the site.

While standing there looking at these shoes and imagining the terrible horror that occurred numerous times on this site, a young lady approached the metal shoes and quietly removed her shoes. As I watched, she slowly pushed her shoes over the edge and watched them hit the water. Together, we watched the shoes float down the river. I stood there, unable to speak.

So what have we learned on this trip so far? And was the time and investment of dollars worth the price?

It is clear that Hungary and other countries in this part of Europe do hold promise for growth in soybean meal consumption as they try to rebuild their livestock industries and learn how to compete in the EU and with other competitors around the world. With only 10 million people, Hungary is not going to be a large consumer market for imported goods or for their own production. Just as Iowa’s 3 million people can’t possibly consume the entire production of Iowa agriculture, neither will the Hungarians. As I mentioned earlier in the week, Hungary at one time raised 11 million swine each year and that number is now down to near 3.5 million. So clearly, they have room to get some of this production back.

The two-day conference on Monday and Tuesday was aimed at trying to encourage and help the livestock producers from the seven countries in attendance to continue to make the necessary changes to their production systems in order to return to profitability and to meet the increased requirements of the EU. I think many of the speakers that we assembled provided some insights on how that might occur. But clearly, there is much more than needs to be done.

It is probably worth reminding ourselves that developing countries, like these in Eastern Europe, have always required long-term perspectives. U.S. soybean farmers began working in Japan very early in the 1950s and their efforts paid off as Japan became (and remains) a major customer for US soybeans. Soybean farmers (and their checkoff dollars) began work in China in the early 1970s, long before anyone had any idea that they would turn into such an important customer for U.S. soybeans. Our efforts in India today are in the same category. Now, Hungary is clearly not China and it will never have 1.3 billion people, but it is in a cluster of countries with emerging markets that do hold great potential as part of the EU. Makes sense to me that we are putting some resources into this region in hopes of building a long-term market.

Tomorrow we begin our visit to Turkey, a country of 70 million (and growing) people.

by Kirk Leeds, CEO of the Iowa Soybean Association

It is Tuesday in Southern Hungary and we are finishing up our two day conference in Harkany. Yesterday we spent the day in plenary sessions with all of the attendees but this morning we broke the group into livestock sectors. We had special sessions on pork, poultry and dairy. Each sector discussion was aimed at exploring specific challenges in each sector and then we had discussions on how collectively the industry could move forward.

As we shared yesterday, all sectors of Hungarian agriculture are going through some very difficult times. In addition to the current global financial crisis, Hungry is still grappling with changes brought about by the end of communism in 1989 and the entry into the EU in 2004. This triple whammy of change has been devastating to this traditionally strong agricultural country. Learning to compete in the European Community and a global economy has presented many challenges.

During some of the discussions, a speaker or two seemed to be asking for some return to state control with price supports and production quotas. Many in the group reminded the attendees that these policies have been tried in the past around the world and have never been successful long-term. It is clear that Hungary is fully committed to freer markets, but that the short term outlook is not particularly bright. However, after having spent some time with these farmers and industry leaders from this region of the world, I am optimistic that they will stay the course and get the job done.

I had to leave the conference a couple hours early in order to catch a ride back to Budapest with a couple of staff from the US Embassy. We arrived in Budapest late this afternoon and I was able to get to a local police station to report my missing passport.I have an appointment on Wednesday morning in the Embassy to get a new passport. It seems that I have to have both a new passport and a copy of the police report in order to fly out of Hungary on Thursday.

In my absence, Grant Kimberley or President John Heisdorffer had to give my presentation to the conference attendees in the closing session. In addition to giving the attendees a better understanding of how ISA and other soybean organization are structured and funded, we wanted to share some basic information about soybean production in Iowa and its growth over the years. Since most countries in this part of the world do not grow many soybeans, we also wanted them to know that Iowa and the US stand ready to supply them with a consistent supply of soybean products, particularly soybean meal for their livestock industry.

While I am at the Embassy in the morning, the rest of the group will be making their way back to Budapest. On the way they will be making stops at a couple of dairy farms and touring Mohacs Danube port. I will have to count on one of them to give an update tomorrow.

Was interesting to note that as we continue to have discussions about biotechnology with farmers from Hungary and surrounding countries, today I heard that the government of Serbia is going to continue to ban GMO crops. To a person, the farmers at this conference that I talked to understand the huge disadvantage that they face in competing globally if they do not have access to biotechnology. It is very hard to imagine the livestock industry in the EU, at least in the newest additions to the EU, being able to survive without access to grains and oilseeds produced using biotechnology.

 ISA CEO Kirk Leeds interviews South Dakota Secretary of Agriculture Bill Even

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Hungarian Parliament

Hungarian countryside driving south to Harkany

June 22, 2009

by Kirk Leeds, CEO of the Iowa Soybean Association

It’s Monday in Southern Hungary and the soybean organizations from Iowa, Nebraska, South Dakota and Minnesota are here with AGP to host a conference entitled, “Conference on Agricultural Solutions and Cooperation.” We have attendees here from at least seven countries with a total attendance of approximately 150.

AGP is a farmer owned cooperative located in Omaha with several soybean processing facilities across the State of Iowa. Collectively, those facilities crush more soybeans in Iowa than any other soybean processor. AGP also has established joint ventures in Hungary and Slovakia to promote soybean meal and AminoPlus, their bypass protein product.

ISA CEO Kirk Leeds, Iowa Lt. Governor Patty Judge and ISA President John Heisdorffer in Harkany, Hungary

Lt. Governor Patty Judge was one of the opening keynote speakers and did an excellent job introducing Iowa to the assembled guests. Her key message was that Iowa has been so successful in Iowa due to three factors.

• Iowa’s fertile soils and hard working farmers

• Iowa’s strong commodity organizations, including ISA

• Iowa governments strong partnership with farmers and their commodity organizations

Another opening speaker was Nyilas Mihaly, Chairman of the Board of AGP Hungary. He reminded the group that Hungarian agriculture is going through a very rough time and that many farmers and agricultural companies will likely be forced into bankruptcy. The financial crisis being felt around the world has had a significant impact on Hungry and the entire European Community. He noted that yes, people must still eat, but they don’t eat as much and typically eat meat products that are less value added. Lower demand for meat protein, combined with higher feed costs has been a very damaging combination for the livestock industry.

Additionally, Mr. Mihaly helped us understand two important historical events in Hungry over the last 20 years and their impact on agriculture. First was the “transition” in 1989 from a communist economy under the Soviet Union and second, the “ascension” in 2004 when Hungry joined the EU. The first event forced Hungry to move from a state-owned agriculture system to a free-market system and many farmers and companies were not able to handle the transition. The ascension into the EU forced many changes on the entire Hungry economy as everyone here was forced to deal with various EU regulations and standards. Taken together, Hungry has seen its hog numbers fall from over 11 million to 3.6 million since 1989. Although their broiler numbers have been much more stable, grain farmers (mostly wheat and corn) have had to adapt to competition from other highly productive EU countries.

In several conversations with growers and industry representatives, we have continued to discuss the impact that adoption of biotech could have on their competitiveness, but as long as Greenpeace continues to provide false information to European consumers, it is unlikely that Hungarian farmers will enjoy the advantages of biotechnology as we are able to in Iowa and across the U.S.

Even with these difficult perspectives, Mr. Mihaly challenged all of us to think long-term and to stay focused on the growing needs to feed a very hungry world. He stated, “Poor people are still starving. We have to find solutions to the short-term profitability challenges.” A challenge that Iowa soybean farmers understand and a challenge that Iowa soybeans farmers accept.

ISA CEO Kirk Leeds interviews Iowa Lt. Governor Patty Judge:

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June 21, 2009

by Kirk Leeds, CEO of the Iowa Soybean Association

First full day spent in Hungary. Our group celebrated Father’s Day by riding a bus on a three-hour trip from Budapest in the North to Harkany in the South. Countryside looked very much like much of the Midwest in US with vast fields and a few gentle hills. Instead of corn and soybean fields, we mostly saw fields of wheat and sunflowers. Fields were of commercial size and we were struck by how few houses we saw among the fields. We were told that most of the farmers live in small communities, a byproduct of their days in commune based systems. The small communities that we saw were quite picturesque with their red brick roofs and solid concrete walls. The highway was modern and most of it was a very new four-lane road. We were told that corn yields were lower than one would expect (99 bushels/acre) due to the fact that they usually experience dry springs and wet falls.

Prior to boarding the bus, we spent about an hour with key staff from the US Embassy in Hungary. Jeffrey Levine, Charge’ d’Affaires of the Embassy, gave us a very informative overview of the economic and political situation in the country. He began the briefing by giving us a brief overview of Hungary’s history. As many of us probably recall from our world history classes, Hungary paid a dear price for its role in World War I and then in World War II. The Treaty of Trianon at the end of WW I reduced Hungary’s territory by 2/3 and 1/3, some 5 million, of its people suddenly found themselves living in another country. During WW II, the Nazi’s took had control of the country and killed an estimated 600,000 Jews as part of the Holocaust and nearly 1500 Jewish communities disappeared. After a battle between Russia and Germany that lasted nearly two months, much of Budapest was destroyed. In 1949 the Communists took power in Hungary and they remained a part of the Soviet Union until they had a peaceful transition to an independent Republic in 1989.

Since its ascension to the European Community in 2004, Hungary has gone through a significant transition to a much more open economy. And due to a largely ineffective government, Hungary has not participated in the economic growth that other former countries of the Soviet Union have enjoyed. With the recent global financial crisis, Hungary expects to see its GDP fall by 6.3% in 2009.

Several of our group have still not received their luggage, courtesy of United Airlines. After a quick stop at a local mall in Budapest, am looking forward to seeing President Heisdorffer wear a new (and clean) outfit tomorrow. I was also able to get my passport photo taken and hope (pray) that I can get a new passport on Wednesday so that I can get on the airplane to Turkey on Thursday morning.

Iowa Soybean Association CEO Kirk Leeds interviews ISA Director Brian Kemp

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Iowa Soybean Association CEO Kirk Leeds interviews ISA President John Heisdorffer

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