Land of Pyramids, Morocco Fertile Ground for Iowa Agriculture

Land of Pyramids, Morocco Fertile Ground for Iowa Agriculture

Iowa soybean farmers travel to North Africa to build relationships, make sales.

Article and photos by Aaron Putze, APR, Iowa Soybean Association

Think of the places you’ve traveled and the things you’ve seen … from beaches and snow-capped mountains to historical sites and far-off places where your ancestors were born.

Returning home, your family and friends often ask, “How was it?”, “What did you see?” and “Do you have pictures?”

For Iowa soybean farmers participating in a trade mission this spring to Egypt and Morocco, the first question was, “Why Egypt and Morocco?”

The query is understandable. After all, what do countries home to pyramids and mosques have to do with soybeans? A lot.

Iowa and U.S. farmers are the difference maker between people having food to eat or going hungry, especially in places long on people and short on natural resources. That list of countries is growing, including those of North Africa.

Suzanne Shirbroun, Iowa Soybean Association's president-elect, joined the trade mission with the goal of boosting demand for soybeans among developing countries.

It Starts with Soy

Ninety-six percent of the world’s population – or 7.8 billion people – live somewhere other than the U.S. And most live in places lacking the quality soil and climate needed to grow food in abundance, including the crops most people overlook or take for granted in Iowa.

Consider soybeans. Traverse Iowa in the spring through fall and you’ll see the legume around every corner. Their presence isn’t by accident. Valued for its protein and oil, the soybean took root in Iowa more than 70 years ago thanks in large part to the skills and expertise of George Washington Carver.

The crop has flourished ever since, with Iowa farmers producing nearly 600 million bushels on 10 million acres (that’s about one-third of the land devoted to agriculture in our state).

Why the oilseed’s rapid growth in production here in Iowa and more than 20 other U.S. states?

Dietary staples (think meat, milk, eggs and fish) needed by the 150 million people living in Egypt and Morocco (and billions more worldwide), start with soy.

The soybean (much like corn, another crop produced in abundance in Iowa), is an essential feed ingredient desired by processors and farmers throughout the world.

In addition to protein, soybeans also yield large quantities of oil that, when refined, is used by billions of people worldwide for cooking and food preparation.

Relationships Matter

Only Brazil, the U.S. and Argentina (in order of production) produce soybeans in large enough quantities to export.

Yet the competition for markets and market share is fierce.

Every business owner needs a customer. For Iowa farmers, many of those customers live in places far and wide, including China, Thailand, the Philippines, Bangladesh, Mexico, Pakistan, India and yes, Egypt and Morocco.

Much like you and the business you own, work for or patronize, developing and maintaining relationships is key to building trust and making sales.

“Price matters, but relationships are important, too,” says Randy Miller, a soybean farmer from Lacona.

Miller serves as president of the Ankenybased Iowa Soybean Association (ISA) and was one of two Iowa soybean farmers who traveled to Egypt and Morocco earlier this year.

During the two-week trade trip, farmers and industry representatives promoted the quality and availability of Iowa-grown soybeans to feed millers, farmers, business leaders, government officials and University of Cairo faculty.

The goal of the mission: To increase the price Iowa farmers receive for the soybeans they grow by boosting demand for the oilseed among developing countries.

“Egypt and Morocco are becoming more urbanized, and they want to eat more protein,” Miller says. “That bodes well for increased soybean demand.”

But being a reliable supplier of soy isn’t enough. U.S. soybeans must be competitively priced, too.

“The state of financial affairs, both in the U.S. and globally, is on everyone’s mind,” adds Suzanne Shirbroun, ISA’s president-elect who farms near Farmersburg. She joined Miller for the trade mission to North Africa.

“It’s the start of every conversation and answer to every question.”

Egypt

• Population: 106 million (43% urban)

• Population by 2050: 160 million (80% urban)

• Third most populous country in Africa

• Economic Growth: 4.4% annual average

• Per-capita Income: $11,700 USD

• Ag production: poultry, fish, milk, cattle, sheep, water buffalo (also a prolific producer of fruits and vegetables)

• Ranks third globally in U.S. soy imports

Morocco

• Population: 37 million (64% urban)

• Population by 2025: 46 million (66% urban)

• Fifth richest country and fourth strongest economy in Africa

• Ag Production: cattle, poultry, fish, milk, sheep and goats

• Aquaculture Growth: potential unlimited given number of miles of seashore

• Top-10 export market for U.S. soybean meal

• Per-capita income: $11,300 USD

U.S. Soy is the largest soybean supplier to Egypt and in 2020 was the 3rd largest soybean export market for the U.S.

Egypt's Hard Hit

It’s often said that when the U.S. economy sneezes, the rest of the world catches a cold.

Now, it comes with the flu, too.

“What happens in the U.S. economically doesn’t stay in the U.S.,” says Miller. “Fiscal policies and elections have an impact, especially for people in developing countries. When our economy sputters, others go off the cliff.”

The Egyptian people have been hard hit by the rising value of the U.S. dollar. Interest rate hikes by the U.S. Federal Reserve have depressed the buying power of the Egyptian pound. It takes almost twice the number of pounds to purchase $1 U.S. Dollar (USD) of agricultural products than just a year ago.

Cue the following dominoes.

When Egyptian buyers must pay nearly twice the amount for soybeans grown and marketed by Iowa farmers, their cost of producing eggs, milk, fish and poultry also rises. These higher costs are passed along to Egyptian consumers already struggling with soaring cost-of-living expenses, including energy.

“What was a difficult situation has become a dire one for people living on the edge,” Miller adds. “It’s heartbreaking because you know the important role soy plays, yet there aren’t any easy levers to pull to improve the situation.”

“The first question you get asked when visiting with soybean buyers in places like Egypt and Morocco is, where are interest rates going?” adds Shirbroun, a sixth-generation farmer. “The cost of everything is top of mind as companies seek to source commodities like soybeans for feed.”

Population increases, changing diets, growing urbanization and a rising middle class are top of mind for Iowa farmers because these situations affect the demand for food.

When people move from the country to town, they shift from being a food producer to food buyer. And getting more money in one’s pocket tends to increase the appetite for better food and more protein, like poultry, eggs, fish, pork and beef.

“There are many reasons to be optimistic as a farmer,” says Miller. “But the future is just that, the future. Things can always change.”

“In the meantime, it’s all about hitting the road, building relationships and creating customers,” he says. “It’s an important part of farming. After all, every farmer needs a customer.”

Market builders

Nearly 15 years ago, the U.S. Soybean Export Council (USSEC) with the support of Iowa soybean farmers, constructed floating cage systems for tilapia production in developing countries. By 2017, the production method evolved into an Inland Pond Raceway System (IPRS) and is present in many locations, including Egypt.

The new way to produce fish more efficiently and sustainably was quick to catch on. A key piece of the IPRS is the need for increased quantities of soy-based feed.

In 2019, team members from Skretting, a company that leads in the manufacturing and supply of aquaculture feed, participated in a USSEC Soy Excellence Center program to become more knowledgeable about IPRS, soy-based feed formulations and production techniques. As a result, U.S. soybean meal consumption is growing in countries like Egypt in concert with increasing fish and shrimp production.