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Trade war with China shifts focus to other countries

Article cover photo
Jim Sutter, CEO of the U.S. Soybean Export Council, details a revised international marketing strategy to continue growing demand for U.S soy. Photo Credit: Joseph L. Murphy/Iowa Soybean Association

By Katie Johnson, ISA public relations manager

In 2017 soybeans represented $28 billion in export value as the largest export commodity in the United States. Exports of soybeans exceeded 60 percent of total soybean production in 2016 and 2017, despite a continuously growing production.

After growing U.S. soybean exports to China from one million metric tons in 1991 to nearly 80 million in 2017, the soybean export market all but vanished in 2018 due to an ongoing trade war.

It was time for the U.S. Soybean Export Council (USSEC) to get to work, the group said.

“We get asked how we could have let our dependency on China grow as much as we did,” said Jim Sutter, CEO of the USSEC. “But our jobs are not to tell a country to lower their demand for our soy.”

USSEC’s primary job is to capitalize on markets around the world to increase demand for U.S. soy, Sutter said. Facing a crisis with China’s absence, USSEC strategized to focus efforts on areas that could provide the biggest return.

In a learning session at Commodity Classic, a panel of USSEC directors detailed their international marketing strategy revisions to compensate for a largely lost market.

“Our goal was to make sure we had a refreshed marketing strategy with the goal of increasing profitability for soybean farmers,” Sutter said. “We completed multiple market interviews to gain insights into other countries’ needs and opportunities.”

Because of that work, USSEC identified a series of countries to prioritize and expand its soy marketing programs and strategies in.

USSEC has categorized countries around the world, classifying them into immature, basic, expansion or mature groups.

In the markets classified as immature, USSEC lets other countries delve into those markets, choosing to focus its energy on countries where there’s more market potential. Mature markets are seen as countries maintaining short-term stability.

The basic category, which includes Algeria, Bangladesh, Egypt, El Salvador, Honduras, India, Morocco, Myanmar, Nepal, Nicaragua, Nigeria, Pakistan, Sri Lanka and Tunisia, is the most valuable, Sutter said.

“Basic markets can provide the highest return,” Sutter said. “If all of the countries we have in the basic category increase their market share to just 50 percent, total demand would be twice the size of the entire U.S. soybean crop.”

Because of this, USSEC is shifting investments to focus on its marketing of U.S. soy.

“By 2021, we have a target of shifting 40 percent of our investments into basic markets,” Sutter said.

In the expansion category lies China, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Indonesia, Jamaica, Malaysia, Mexico, Peru, Philippines, Romania, Russia, Thailand, Turkey and Vietnam.

“While we are maneuvering to begin implementing this refreshed market activity, we’ve launched a world tour to express our gratitude to customers and hear what their concerns are and talk to them about the U.S. soy advantage,” Sutter said. “It’s important we listen to what they have to say.”

The “refreshed market activity” includes USSEC’s “Keep Exports Great” tour.

“We’ve already seen good results,” Sutter said. “We take a U.S. soy grower-leader and an exporter and we get into discussions with people in these countries about their concerns. We make sure they’re happy with our product.”

Those conversations help build relationships with trading partners while ensuring them of the safety and quality of U.S. soy, Sutter said. In one such conversation in Vietnam, USSEC helped customers concerned with a history of shipments of soy contaminated with Canadian thistle seed. USSEC works to ensure current customers are satisfied while dispelling any problems that may arise.

The Iowa Soybean Association (ISA) is no stranger to international trade missions. ISA’s board of directors routinely travels worldwide as representatives of the soy industry to encourage relations in other markets. And that’s one of the greatest strengths of U.S. soy marketing, Sutter said.

“Nobody can help us sell U.S. soy better than the soy farmer,” Sutter said.

International marketing efforts of U.S. soy have been successful because of quality U.S. soy products, said Ed Beaman, senior director of basic market development and current regional director of the Asia subcontinent for USSEC.

”We’re lucky because we have the best soy product in the world,” he said. “We have great opportunities because we didn’t hang our heads and throw in the towel. As a soy team, we stood up and recognized opportunities we have around the world. That’s our goal.”

Playing offense is the name of the international trade game, he said.

 “We get to play offense in these new markets by doing new, innovative and exciting things that we believe are building legacies,” Beaman said.

Sutter and Beaman reiterated how USSEC’s revised international strategy can create that legacy regardless of the outcome of trade negotiations with China.

“If China comes back, that’s great. But if not, our attention and efforts on the top 15 non-Chinese markets will pay off,” Beaman said. “Other countries need soy protein, and ours is the best they can buy.”

Contact Katie Johnson at kjohnson@iasoybeans.com.

For media inquiries, please contact Katie Johnson, ISA Public Relations Manager at kjohnson@iasoybeans.com or Aaron Putze, ISA Communications Director at aputze@iasoybeans.com

For permission to republish articles or to request high-res photos contact Aaron Putze at aputze@iasoybeans.com. Iowa Soybean Association | 1255 SW Prairie Trail Pkwy | Ankeny | IA | 50023 | US

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