Mexico trade mission reveals growing demand for quality soy02/21/2019 | Water Quality
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By Katie Johnson, ISA public relations manager
While the border wall may be a contentious issue with America’s southern neighbors, soybean purchasers around Querétaro, Mexico, celebrate a growing relationship with U.S. soybean farmers.
Iowa Soybean Association (ISA) directors Rick Juchems and Bill Shipley spent the week in Querétaro to analyze and expound on global market demand for U.S. soy. An AGP-hosted trip, Juchems and Shipley got a behind-the-scenes glimpse into the soy needs of grain and feed mill processors.
The Mexican livestock industry is the U.S. soy industry’s second largest customer. Touring large-scale dairy operations, one thing remained clear — efficiency is the name of the game.
“Every growing stage, our cows are carefully assessed to know how much crude protein and amino acids they need to be consuming,” said Miguel Prieto, owner of Caronelas Dairy Farm just outside of Querétaro.
“We have, on average, 2,000 milking cows on our operation at any given time. We must provide one kilo of soy protein per cow per day.” One kilo per cow each day equates to 4,400 pounds of soybean meal consumed on a daily basis.
The dairy farm is part of Ganaderos — a 70-member cooperative through central Mexico. Ganaderos met with AGP and ISA leaders Tuesday, Feb. 19 to discuss a continued and growing relationship with the U.S. soybean industry.
AGP explained their emphasis on amino acid efficiency in soybean meal. Detailing the careful balance between crude protein and the amino acids, ISA’s farmer leaders echoed the careful consideration a farmer must take in choosing what to feed their livestock.
“Soybeans grown in more northern states, such as Iowa, South and North Dakota and Minnesota, have higher sucrose content which equates to more energy consumption,” says Peter Mishek, a multi-state consultant for AGP.
Ganaderos leaders attentively listened to the science behind U.S. soy production. As feed mill operators in Mexico worry about mycotoxins and other threats to grain quality, Ganaderos Purchasing Manager Arturo Gonzalez was very interested in hearing about the quality standards of U.S. soy.
“We are very interested in growing our business with you,” Gonzalez told Mishek.
Juchems and Shipley fielded questions from Ganaderos leaders who were interested in hearing about how farmers making planting decisions and how current commodity prices play into their decisions.
“The meeting was very interesting,” Shipley said. “I was pleasantly surprised with the possibilities of selling them more soy products to feed their dairy cows as they are looking to expand.”
The Mexican market may be small in comparison to China, but they steadily remain the second largest importer of U.S. soybeans.
“No matter how small the market may be, they all add up,” Shipley said.
Every buyer the trade delegation met with confirmed they are set for growth in the next five to 10 years.
Gramosa, a multi-company grain processing plant outside of Querétaro, is one example of a growing market.
The company is currently working to install two more ports along the Western Mexican coast. Gramosa processes 25,000 pounds of soybean meal per day and will host the largest port in Mexico when construction concludes. The port will facilitate extremely large ships, capable of carrying record-breaking weight in grains.
“Our customers are very picky,” said Arturo Garcia, commercial port manager at Gramosa. “They are used to having quality soybeans. As our customers grow, so do we, and so must our ability to provide them with larger amounts of that quality product.”
No stranger to growth or quality, ISA leaders also met with Bachoco, a poultry production company that processes 12 million chickens and 500 tons of eggs each week.
Expecting a growth of 5 percent each year for the next five years, Bachoco echoed the need for larger amounts of U.S. soy.
“We are looking to expand past poultry production,” said Bachoco Purchasing Manager Miguel Gonzalez. “We hope to increase our sow production to 20,000 and begin cattle production as well.”
Bachoco provides Mexico with 35 percent of its poultry needs and processes 600,000 metric tons of soybean meal per year.
“It is evident these markets are growing,” Shipley said. “Forming and continuing relationships with these buyers will continue to improve demand for Iowa’s soybean farmers.”
With most Mexican soybean buyers purchasing almost exclusively U.S. soy, buyers took the opportunity to meet with U.S. soybean producers as a chance to discuss a larger obstacle ahead of them — transportation.
AGP works closely with several railways to establish ease of access, fair rates and quick, safe delivery. Many buyers commented that increased access to railways and varying numbers of train carts per order would assist them in making larger purchases.
ISA and AGP leaders agree that the meetings have been fruitful in identifying stronger markets and learning the needs of global buyers.
“Most buyers we have met with so far have said between 80 and 90 percent of their soybeans come from the U.S.,” Shipley said. “We can provide them with 100 percent. That’s why these meetings are important.”
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