Iowa soybean farmers building their brand during trade mission to Bangladesh, Pakistan02/06/2020 | Soybean Exports, Economics
By Aaron Putze, APR
Ask any brand about the importance of marketing, and they’ll promptly reply that first understanding the needs and wants of the customer is essential to making any sale.
The same holds true for soybeans.
Despite a recent thawing of trade friction with China, U.S. soybean exports to the world’s top buyer continue to languish. Increasing America’s share of soybean exports to developing countries, therefore, is a must.
Midwest soybean farmers traveling this week to Bangladesh and Pakistan say building their brand with soybean processors is critical. Fostering relationships will provide better price opportunities in the near-term while creating preference for U.S. soy among more buyers long-term.
“It takes time and effort to travel, but trust and long-term relationships aren’t made over the phone,” says Tim Bardole of Rippey. “Meeting face-to-face is how you build loyalty. We may be buying and selling soybeans, but it’s always about people and how you connect with them.”
Bangladesh and Pakistan, with a combined population of nearly 400 million (or 75 million more than the United States), are good places to market soybeans. Bardole, who serves as president of the Iowa Soybean Association (ISA), is one of 11 U.S. soybean leaders and staff visiting with key ag officials in Dhaka, Bangladesh, and Karachi, Lahore and Islamabad, Pakistan.
Their goal: sell more soybeans by better understanding the needs of their customers. U.S. soy is the preferred feed ingredient for ramping up and improving their production of protein: namely, poultry, fish and milk.
U.S. soy goes global
The trade disruption with China has been extremely difficult on U.S. farmers. But Jeff Jorgenson of Sidney says the dispute between the world’s two largest economies has pushed U.S. soybeans onto the world market in an unprecedented way.
“It’s been very rough in the short-term,” says ISA’s president elect. “But looking at the long-term play, we’re building preferences for U.S. soy in more places.
“One panamax vessel of soybeans is not enough to change mindsets,” Jorgenson adds, “but after a few months and then years of sales, you’ve established your brand.”
Pakistan imports nearly 2.4 million metric tons (mmt) of soybeans. A conservative estimate pegs that total to increase to 3.5 mmt within next 3-4 years. With some changes in government policy (eliminating a 14% duty on soybean meal, for example), Pakistanis in the know believe soybean imports could jump to 5 mmt, and perhaps higher.
Manuwar Manais, production manager and nutritionist for Sindh Feed based in Karachi, is bullish about Pakistan’s future. The country is growing, and metropolitan areas are booming. He also values the personal exchange of ideas with U.S. farmers. He hosted the delegation earlier this week.
Sindh Feed, founded in 1976, operates four crush facilities in Pakistan and the country’s oldest feed mill. It began processing soy in 2014, specializing in bagged feed for poultry, fish and dairy and also exports a small amount of soybean meal.
The company imports 65% of its soybeans from the United States via the Gulf of Mexico; Brazil and Argentina soy makes up the rest.
The Pakistani feed industry, Manais says, is very competitive and quick to adopt technology, including the use of environmentally-controlled housing for its poultry flocks.
An association representing the feed industry established the price that mills can charge for its product. Aqua, poultry and dairy producers decide on where to source feed based on the performance of their animals and fish. Skilled and highly-qualified nutritionists are in high demand as performance of the feed – not just price – is what distinguishes one mill from another.
“Everyone in the feed, livestock and aqua industries focuses on quality,” says Manais. “Many are also friends and they talk. If they don’t get performance, they will change suppliers and get better feed for the next flock.
“Basic nutritional qualities are the first consideration,” he adds. “Our preference is U.S. soybeans because they perform the best.”
But U.S. farmers need to continue to work at their brand. Manais encouraged them to grow and sell a more consistent product. Variability from shipment to shipment adds time and expense for him and his customers.
“With increased production of soybeans there’s a possible decrease in their nutritional composition,” he said. “So, usage in Pakistan and anywhere you have to consider that. Production matters but the nutritional quality must also be good. Develop consistent quality soybean meal and you’ll have a customer for life.”
Taking time away from the farm to meet with soybean buyers nearly half-a-world away also demonstrates that you care about the customer, says Anas Haroon, Cargill’s commercial head and senior trader in Pakistan.
Meeting with the trade delegation in Karachi, Haroon says visitors to his country are few and far between. Those who do make the effort to jump the Pacific gain an advantage.
“Buyers tell me that visiting with farmers in-person gives them a better feeling,” he says. “You can quickly clear any misperceptions that may be in the marketplace. People here put a premium on relationships.”
The trade delegation includes farmers and United Soybean Board representatives Darren Kadlec of Pisek, North Dakota, and Lance Rezak of Onaga, Kansas, ISA staff members Kirk Leeds, Grant Kimberley and Aaron Putze and representatives of the U.S. Soybean Export Council. The group departed for Dhaka, Bangladesh, on Jan. 30 and returns to Iowa from Islamabad, Pakistan, on Feb. 8.
Contact Aaron Putze at firstname.lastname@example.org or 515-975-4168.
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