Iowa Delegation to China Finds ‘Renewed Desire’ to Move Trade Forward
Kirk Leeds has made the 16-plus-hour journey from Iowa to China more than 20 times to promote U.S. soybeans. After his most recent trip, the CEO for the Iowa Soybean Association (ISA) says his one takeaway is, “a renewed desire and perhaps optimism in China about the ability to move forward on key trade issues.”
Leeds was part of the All-Iowa Trade Mission led by Iowa Governor Kim Reynolds that discussed trade potential as well as issues for U.S. beef, poultry, soybeans, corn, dairy, and other exports. In addition to Leeds, the trade mission comprised key leaders from the state’s commodity groups, including Craig Floss, CEO of the Iowa Corn Growers Association; Matt Deppe, CEO of the Iowa Cattlemen’s Association; and Kevin Stiles, executive director of the Iowa Poultry Association and Iowa Egg Council as well as Bill Northey, the Iowa secretary of agriculture.
After meetings with Chinese officials, including the vice premier, Reynolds expressed optimism as well. “It solidified the importance of agriculture to the state of Iowa and the important role farmers and commodity groups play in feeding the world,” says Reynolds said. “The group feels progress has been made, but we need to continue conversations to improve opportunities.”
The 10-day trade mission comes after former Iowa Governor Terry Branstad made the transition to U.S. Ambassador to China. Branstad and China’s President Xi Jinping have been friends since the Chinese leader’s first visit to Iowa in 1985.
“We are truly reaping the benefits of (friendships) today,” Reynolds said.
These were the key topics and points of progress discussed during the trade mission:
Before the trade mission, China opened up its borders to U.S. beef again. The group marked this significant milestone with a ceremony at Wumart, a major Chinese retailer that will now sell U.S. beef. “We believe beef is worth hundreds of millions of dollars in the short term and significantly more in longer term,” says Northey.
Faster GMO approval process
Four biotech products were recently approved. However, others are still pending. “We expect more transparency in the process,” reports Northey. “There were no promises on the timeline and change of process.”
“We signed a really big deal before we left,” says Reynolds, referencing Chinese soybean processors’ purchase of 460 million bushels of U.S. soybeans worth $5 billion.
DDGS and ethanol
An anti-dumping case has limited the ability to export distillers’ dried grains with solubles (DDGS) to China. Before this, China was the U.S.’s largest buyer.
“Losing that market has impacted the profitability of ethanol plants,” says Northey. “Ethanol could also come to China, but there are additional taxes on ethanol here. So that is extremely limited.”
The trade mission did discuss gaining access to these two markets with Chinese officials, although no promises were made, according to Kurt Hora, the president of the Iowa Corn Growers Association Board of Directors.
China has a growing middle class that wants more protein, says Reynolds. “China is the largest producer and consumer of pork, but they can’t meet their own needs.”
The president of the Iowa Pork Producers Association, Curtis Meier, hopes U.S. producers can help fill this gap. “We as pork producers have a large market in China, but we need it to grow,” he says. “We’re raising a lot of pork in the U.S., and we need a larger market.”
Leaders in poultry associations are also looking for opportunities to supply China’s middle class with protein sources. “In the turkey industry, the opportunity to someday sell China a safe, quality turkey product to meet the growing needs for protein is exciting,” says Gretta Irwin, executive director of the Iowa Turkey Federation. “I’m leaving here very optimistic.”
Stiles was also optimistic about long-term agreements for chicken products. “We had conversations about opportunities to export eggs and egg products to China,” he says. “Protocol needs to be put in place, so this could be three to five years down the road.”
The growing middle class plus an increase in per capita consumption of dairy will increase China’s demand. “The officials did express interest in that, especially for higher value dairy products like cheese, whey isolates, mozzarella, and snack items,” says Larry Shover, president of the board for the Iowa State Dairy Association.