TALKING TRADE U.S. Soy Global Trade Exchange examines the road ahead for the world of soy BY JOSEPH HOPPER
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owa’s farmers don’t just grow crops and raise livestock; they run a business. It’s a difficult task, but it can be made easier when markets are stable and international trade is running smoothly. At the U.S. Soy Global Trade Exchange (GTE) in St. Louis, attendees learned more about China – one of the Iowa soybean farmers’ largest customers – and the current attitudes at play in the nation, which consumes 60% of the world’s supply of soy. Simon Rabinovitch, economic editor at The Economist, says decades of commentary and speculation on China typically can be described as falling
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under the bull and bear dichotomy used by the financial sector. A bullish China has often been described as an unstoppable force, while a bearish China is considered destined to fall apart. “As China grows, so does its soybean consumption,” Rabinovitch says. “Many industries are going to face challenges because of an aging population, but people still need to eat. In the last four decades, reality has leaned closer to the bullish description. However, the country faces several significant challenges as it sets lofty goals for the future. “People are increasingly prosperous;
there may be a little bit less pork, more fish but maybe more beef, a mixture of trends,” Rabinovitch says. “My sense is the population trends, certainly for the next 10 to 15 years, are not going to have a great impact on consumption. They will be relatively neutral for soybeans.” China’s workforce is improving at an incredible pace, with approximately 8 million earning post-secondary training and college degrees each year. At the same time, China’s demographic situation is changing – the population is becoming fewer and older. The country’s average age today is older than in the U.S. The population’s
