Mark Albertson climbed out of a boat near Ensenada, Mexico, March 8 feeling pleased with the future of soybean products. Research has given soybean growers a competitive edge in areas like this one — tuna aquaculture.
Albertson, Illinois Soybean Association (ISA) director of strategic market development was in Mexico last week as part of a mission to promote the use of U.S. soybeans in swine and fish feed.
His trip included being suited up in white to visit a pork processing plant, taking a boat ride out to a fish farm off the Baja coast of California and attending an international aquaculture conference.
Aquaculture is already a big consumer of soy — more soybeans are used for fish feed than cattle feed, Albertson says.
Soybeans had not been used in tuna feed, but research projects with the help of checkoff dollars are changing that. In Panama, labs are perfecting a soy feed formula for yellowfin tuna. Sausage, pellet and brownie-style food is being tested to see what texture the fish prefer. In Ensenada, Mexico, Pacific bluefin tuna are being raised in open ocean.
“It’s a tuna revolution,” Albertson said.
These kinds of new products increasing demand for U.S. soybeans help the price of soybeans remain strong.
“Soybean production is higher than ever. But the demand is stronger than ever before. That’s why soybean prices are not in the basement,” Albertson said.
Farmers are very aware of how important new products and trade are. China is the biggest importer of soybeans by far. As a group, the EU countries are second and Mexico is third.
“The Mexicans are welcoming. They are wonderful people, and we have a great trading relationship,” Albertson said during the trade mission there March 9.
But other countries are competing for markets like this. Argentina and Brazil remain the top soybean exporting competitors for the U.S.
“Brazil has tremendous capacity. Both countries are aggressive,” said W. Stan Born, a corn and soybean farmer from Peoria County, Ill.
Both countries have a “pretty good product but have advantages and challenges on the global stage,” he said.
“These guys are good. They are competent growers and make for worthy competition,” Born said.
Argentina is especially competitive when it comes to meal. Processors are investing heavily, and there is a tax structure to encourage it, Born said.
The Brazilian and Argentinian growers have some advantages with buyers. The strong U.S. dollar is working against the U.S., and South American farmers have lower land costs. But they struggle with logistics to get their crops moved, Born said.
The U.S. has an edge with railways and river transportation.
“To customers, that’s a big deal. When they want delivery, they want delivery,” Born said. “We can’t let ourselves fall behind.”
The USDA on March 9 upped its projection of the Brazilian soybean crop this spring to a record 108 million tons.
“There’s a record crop being harvested in South America,” said John C. Baize a consultant for the Soybean Export Council.
While the competition is growing, demand is as well. That was clear earlier this month when the USDA raised China’s import projection by 1 million tons to 87 million.
“63.3 percent of all soybeans exported by all suppliers go to China,” Baize said.
For Illinois farmers, the relationship with Taiwan is especially strong, according to Daryl Cates, Illinois Soybean Association chairman.
“80 percent of the soybeans Taiwan purchases are from Illinois,” he said.
There is always concern there could be trade disruptions with China, and many farmers are worried about uncertainty in the U.S. over trade agreements.
“My own view is that cooler heads will prevail down the road,” Baize said. “Trade is too logical. Too necessary. Things will evolve the way they make sense.”
China doesn’t want a trade war. The U.S. is a large importer of their products, Baize said. But if South America did get the opportunity to supply all China’s soybeans demand, the U.S. would be able to supply the other countries. It would balance out, he said.
U.S. advocates are making sure their voices are heard. In the last 60 days, Cates has only been home six days. His recent destinations include Taiwan, Indonesia, Spain, Brussels, England, California and Texas.