Soy's International Impact

STORIES AND PHOTOS BY AARON PUTZE, APR

PEOPLE WIELD INFLUENCE

PEOPLE OF BANGLADESH AND PAKISTAN WIELDINFLUENCE ON FORTUNES OF U.S. SOYBEAN FARMER

Weather, planting dates, weed management and seed selection all factor into the economic fortunes of Iowa soybean farmers.

So, too, do the lifestyles of people living and working half a world away.

A myriad of factors impact growing and selling soybeans. So it’s easy to downplay the impact people have on the business. That’s especially true when nearly 7,000 miles and 13 time zones separate the towns of Ogden, Spencer, Osceola and Maquoketa from the cities of Dhaka, Lahore, Karachi and Islamabad.

Soybean processing employees in Karachi, Pakistan (left); A driver proudly poses with his rig.

But, “out of sight, out of mind” is no excuse for being unaware about the interconnectedness of U.S. soybean production and the economies of developing countries.

And nowhere is that more apparent than Bangladesh and Pakistan and the nearly 400 million people who live there (the U.S. population is 326 million).

Selling fruit roadside in Dhaka, Bangladesh.

“You can read about it but until you experience it, you can’t truly grasp the challenges as well as the opportunities that exist for us as soybean farmers,” says Iowa Soybean Association (ISA) President Tim Bardole.

The farmer from Rippey joined ISA President-elect Jeff Jorgenson and CEO Kirk Leeds for a 10-day trade mission to South Asia in February. Grant Kimberley, ISA’s senior director of market development, and Aaron Putze, senior director of information and education, also participated. Also in attendance were representatives of the USSEC and United Soybean Board.

Feed made with U.S. soy bagged and ready for transport in Karachi, Pakistan.

“The people of Bangladesh and Pakistan need to increase their protein intake, and chicken and eggs are ways to do that efficiently and inexpensively,” Bardole adds. “This presents untold market opportunities for the U.S. soybean industry.”

Jorgenson says the developing countries are gaining an economic foothold. As their populations grow and become more productive, they’ll require more abundant and nutritious food. The first step to making a sale is to know who you’re working with.

“We need to be here – we need to know the people who are buying and processing soybeans and they need to know us,” he says. “Better protein starts with better feed and you need high-quality soybeans. By making stronger connections, we can make more sales.”

But fish, chickens and dairy cows aren’t the main driver of soybean demand. It’s the people of South Asia that have the greatest impact on the fortunes of Iowa soybean farmers.

“People want to send their children to school, they want good lives and they want good food,” says Moshiur Rahman, a Bangladeshi poultry industry leader. “More people are working and earning. They are no longer living hand-to-mouth. Lifestyles are changing and as they do, their wants and needs change, too.”

Rahman estimated up to 85% of Bangladeshis live in small villages where they grow and consume their own rice, fish, eggs, vegetables and chicken. A similar story can be told in Pakistan.

“They don’t buy so much,” he says. “But if we change lifestyles, demand for food will increase dramatically. So, changing lifestyles is our No. 1 priority.”

Wet market in Dhaka, Pakistan.

USSEC consultant Reja Masum is witnessing the lifestyle improvements firsthand. His home country of Bangladesh didn’t import a single soybean in 2015. Two years ago, soybean imports totaled 353,000 metric tons, increasing to 921,000 metric tons last year. This year, the country is on pace to purchase almost 1.2 million metric tons (mmt), or roughly 45 million bushels, of U.S. soybeans.

Masum said it’s not unreasonable to think that amount could more than double again within four years.

Posing for the camera in Dhaka, Pakistan.

“More people working and sending money back to villages helps local economies,” he says. “People here are eating poultry more – maybe two to three times each week-as they have better buying and purchasing power.”

Unscathed by the ongoing U.S.- China trade war, Bangladesh and Pakistan are poised for growth. Both countries have room for existing industries to increase output, particularly in cotton, textiles and manufacturing. But challenges also exist. “Agriculture is not organized here in Bangladesh,” Masum says. “Big feed millers produce good quality feed but smaller feeders don’t. Fish are not up to global export standards and product promotion is sporadic at best.”

Becoming more organized and producing a higher-quality product can enable farmers and the ag industry to focus on exports. Doing so will improve farm prices enabling growers to invest in better feed and technology.

“This industry needs support from the government,” Masum says. “The farmer is just not getting a good enough price. If they do, they’ll produce.”

Soybean production in Pakistan or Bangladesh is, at best, scarce. Farmers excel at rice, corn and cotton production and grow an array of vegetables and fruits. But the countries have a sizeable oilseed processing industry and must import soybeans to fulfill their growing need for animal feed and oil.

That presents opportunities for U.S. farmers, says Kimberley. “Bangladesh and Pakistan are markets that need both protein and oil from soybeans,” he says. “Combined, they believe they can increase imports from roughly 3 million metric tons to around 6 million metric tons in the next three-to-five years.

“It’s a growing market with improving economies, and the potential for growth is very good in the poultry, egg, aquaculture and dairy sectors,” he adds. “Per capita protein consumption is still quite low with a lot of room to grow. Feed formulation technology is basic with room to grow soybean meal utilization in the ration. The U.S. soybean farmer can be the catalyst for increased consumption, and thus, increased demand.”

EXPORT OPPORTUNITIES

U.S. SOYBEAN EXPORT COUNCIL OPENING MARKETSFOR AMERICA'S FARMERS

A view from atop City Crush, Dhaka, Pakistan.

Having multiple buyers is advantageous for those who have something to sell.

The U.S. Soybean Export Council (USSEC), with the support of the Iowa Soybean Association (ISA), is building demand around the globe to enhance export opportunities for America’s soybean farmers.

“I’ve had an opportunity to travel to many different locations on behalf of Iowa and U.S. soybean farmers,” says ISA CEO Kirk Leeds. “I’m always impressed by the people the soy industry has in 60-70 countries around the world to help us sell soybeans. “It’s no different here in Bangladesh and Pakistan. The representatives here are top-notch and well-respected.”

Soybean meal for delivery.

Poultry food made with U.S soy.

Soybeans arriving in Dhaka, Pakistan from U.S. Gulf.

Through a global network of international offices and country representatives, USSEC builds preference for U.S. soybeans and soybean products by advocating their use in feed, aquaculture and human consumption. Throughout South Asia and beyond, USSEC:

• Organizes technical summits to share latest feed formulations and new technology on feed milling or aqua farming; also touts the benefits of using U.S. soybeans and soybean meal;

• Sponsors seminars to educate general public about importance of protein to increase chicken and egg consumption;

• Invites buyers (and potential buyers) of U.S. soybean meal and soybeans to attend buyer/ seller conferences and trade shows to enhance connections and relationships with U.S. exporters;

• Organizes training in universities for poultry, aqua and crush plant industry for people to increase their knowledge and efficiency of soybean utilization;

• Invites U.S. experts to assist local feed mills and crush facilities to enhance production; and

• Maintains good relations with large feed millers and crushers and encourages them to buy U.S. soybean and soybean meal.

Iowa Soybean Association representatives at City Crush (from left): Aaron Putze, Jeff Jorgenson, Kirk Leeds, Tim Bardole and Grant Kimberley.

“People like U.S. soybeans,” says USSEC’s CEO Jim Sutter. “The more soybeans they import from the U.S., the more we can assist them in utilizing it most efficiently to boost production and feed optimization. Our work benefits the buyer and seller.”

It’s timely and important work. And it was evident to the ISA leaders and staff who met with soybean buyers as part of a recent trade mission to Bangladesh and Pakistan.

“USSEC is well-connected and their country representatives introduced us to the right people,” Leeds says. “There’s a general appreciation in both countries for U.S. soybean farmers and the soybean checkoff. It’s always good to be reminded that we have really good people working on our behalf around the world to market U.S. soybeans.”

Trucks ready to roll at City Crush.

AQUACULTURE EXPERTISE

GROWING APPETITE FOR FISH COULD NET GREATERU.S. SOYBEAN EXPORTS

The U.S. soybean industry is providing insights and expertise to empower a new generation of aquaculture expertise in Pakistan. It’s an investment in the next generation of U.S. soybean farmers, too.

On the outskirts of Lahore, Pakistan, surrounded by expansive fields of wheat, rice and vegetables and an imposing brick wall, you’ll find the University of Veterinary and Animal Science.

A delegation of Iowa and U.S. soybean farmers paid it a visit in February as part of a broader tour that included stops in Bangladesh. The goal: to better understand how the developing country’s appetite for soy will evolve in the next five to 10 years and be its preferred supplier of the highquality oilseed.

Home to almost 7,000 students, the university established a fisheries department in 2002 to better serve the needs of the country’s rapidly expanding aquaculture industry.

Less than two decades ago, there were no skilled professionals in the agricultural field. Today, 600 students are enrolled in the department that boasts state-of-the-art facilities, advanced fish education and skilled faculty. In addition, nearly 700 professionals have obtained degrees from the school.

“We’re here to educate students so the industry can be better served moving forward,” says Dr. Noor Khan, department head. “The fish industry is the fastest growing food production sector in Pakistan. We need skilled workers with technical expertise to aid in that growth.”

While fish consumption is only 2 kilograms per person per year (poultry is eight), the industry is ripe for growth.

Fish feed produced in Pakistan is comprised largely of soybeans sourced from the U.S. And almost half of the fish formulation is soy. Add to that a population of nearly 220 million and a growing preference for tilapia, shrimp and catfish, and you have the perfect recipe for increased soybean consumption.

Butter catfish at Krishibid Farms near Dhaka, Bangladesh.

The USSEC is working diligently in Pakistan to nurture the aqua industry. Backed by Iowa and U.S. soybean farmers, USSEC supports educational summits that expand awareness about the potential in aqua farming. It has also helped establish In-Pond Raceway Systems to enable farmers to grow fish more efficiently and sustainably using U.S. soy as the ideal feed ingredient.

“The school is focused on the production of sustainably raised fish meat and value-added products,” says Khurram Shahbaz, USSEC country representative for Pakistan. “USSEC provides expertise, training and funds so it can be a demonstration site and share the knowledge so that many farmers can grow the industry.”

Fish breeding ponds at the University of Lahore, Pakistan.

Students conduct basic and applied research in nutrition, processing, disease, disease management, toxicology, value addition and nutrigenomics. It offers undergraduate, masters and doctoral degrees. In addition to cooperating with USSEC, the school has linkages with many respected institutions around the world, including The Ohio State University and Purdue University.

Shahbaz, who graduated from the university in 2005, says the department will continue to evolve its focus and course offerings. Faculty and students will intensify the study of fish feed conversion, nutrient recycling, genetic improvement and developing of fish vaccine for culturable fish.

“We are currently importing catfish and tilapia from Thailand,” he says. “That tells us we need to ramp up domestic production to meet our own needs and to also have product to export.”

Soybean processing at City Crush, Dhaka, Bangladesh.

Grant Kimberley, ISA senior director of market development, says opportunity combined with cooperation can benefit the people of Pakistan and U.S. farmers.

“Aquaculture seems like an industry that is in its infancy but could grow exponentially with help from the technical services and expertise the U.S. soybean industry has in his sector,” he says.

Contact Aaron Putze at aputze@iasoybeans.com.