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Buy direct
An Iowa cooperative is ready to directly sell soybeans worldwide.
BY MATTHEW WILDE
Iowa’s largest cooperative is working to directly export soybeans and other commodities to customers overseas.
Landus Cooperative officials hope it will boost demand for Iowa-grown ag products, which will increase revenue. That will likely mean higher prices for area farmers and increased patronage for members.
The Ames-based co-op, with more than 60 locations throughout the state, has access to an export terminal on the Gulf of Mexico. The goal is to become the first farmerowned elevator in the state to offload trains full of soybeans, soybean meal or other ag products onto ships for direct export sale.
Ron DeJongh, Landus Cooperative chief commodity marketing officer, attended the 2018 U.S. Soybean Regional Trade Exchange in Barcelona, Spain, late last year to drum up new export business. He informed soybean buyers from major feed mills and crushers in Europe, the Middle East and North Africa about the cooperative’s ample soy supplies and potential shipping capabilities.
“All the uncertainty with China right now creates opportunities to create new supply chains,” DeJongh says. “Europe, Northern Africa and the Middle East are excellent, growing markets.”
Indeed, they are.
U.S. soybean and soybean meal exports to the regions are up 210 percent and 17 percent, respectively, as of mid-December since the marketing year began, according to the U.S. Soybean Export Council (USSEC). This equals about 140 million bushels of additional soybean sales compared to last year. The surge is due to changing supply and demand dynamics and cheaper U.S. soy compared to South American competitors due to the U.S.-China trade war.
USSEC and industry officials predict U.S. soybean sales to Europe alone could possibly double to 13 million metric tons (478 million bushels) this year. Meal sales could almost double as well at 1.6 million metric tons.
Combine that with a trade truce with China and U.S. soy shipments resuming to the world’s largest buyer, DeJongh is excited about the future.
“Today, we are focused on rail-direct markets like Mexico," DeJongh adds. "But we want to load soybeans and soy products into rail cars and send them to the Gulf, which can be loaded on ships that can go anywhere in the world for direct sale.”
Workers at Landus Cooperative move a 540,000-bushel soybean pile into storage. Landus would like to directly export soybeans and other commodities over seas.
Joseph L. Murphy/Iowa Soybean Association
Landus Cooperative’s Mexico sales include soybeans and SoyPlus®. The high bypass soybean meal, primarily a dairy feed ingredient, is also exported to many countries such as Saudi Arabia.
Soybean bids at the cooperative’s Ralston crushing plant are typically 20 to 30 cents per bushel higher due to demand for SoyPlus. Fifteen percent of the product is shipped overseas.
Cooperative members, struggling with low commodity prices for several years exasperated by China shunning U.S. soy until recently, say the effort to boost oilseed demand and prices couldn’t come at a better time.
Farmers close to the Mississippi and Illinois rivers typically enjoy better soybean basis levels — the difference between local cash and futures prices — than those farther away due to export demand. The waterways are arteries to the Gulf.
“Additional soy export opportunities should enhance basis levels for farmers,” DeJongh says.
Randy Souder, a Landus Cooperative member and grain farmer from Rockwell City, hopes the co-op’s export aspirations will do the same thing for him.
Randy Souder, a Landus Cooperative member and grain farmer from Rockwell City in northwest Iowa, is also an ISA)Communications Squad member.
Joseph L. Murphy/Iowa Soybean Association
DeJongh says Landus Cooperative is uniquely positioned to become an export player. Here’s why:
Size — More than 50 million bushels of soybeans are handled annually.
Logistics — Fifty-five grain locations, of which 13 unit-train loaders accessing all seven Iowa railroads, all of which can access the Mississippi River or Gulf market.
Location — Industry experts say Iowa soybeans are often sought after by buyers due to quality and relationships the state’s farmers have formed with customers overseas.
Quality — Meeting foreign material (FM) requirements won’t be an issue. It’s typically not a problem in Iowa-raised soybeans. The less soy is co-mingled and handled, the more FM is reduced.
Expertise — Employees can handle contracts, insurance, planning, shipping, etc.
A 110-car unit train holds about 10,000 metric tons (about 367,500 bushels) of soybeans. A panamax ship can carry about 60,000 metric tons (2.2 million bushels). The cooperative’s goal is to fill unit trains of Iowa soybeans and value-added products and export them direct via a panamax.,
Landus Cooperative can supply biotech or non-biotech soy, DeJongh says. Corn and dried distillers’ grains can be shipped as well.
“We have the logistics expertise and the ability to meet customer demands globally if the opportunity presents itself,” he continues. “If the customer is looking for certain characteristics of protein or identity preservation, our farmer-members can provide that service, too.”
Additional marketing options and building demand always benefits farmers, says Grant Kimberley, ISA market development director.
Some customers may like to do business with the cooperative rather than larger exporters like ADM or Bunge. During trade missions and visits to Iowa, Kimberley says buyers often ask if they can buy bulk soy directly from farmers.
With Landus Cooperative purchasing soy from members and shipping it overseas, that’s as close to fulfilling the wishes of some customers as it can get.
“Iowa has a good reputation for quality soybeans,” Kimberley says. “This is another way to take advantage of strong relationships that farmers and the industry have cultivated.”
Contact Ann Clinton at aclinton@iasoybeans.com.
