Wisconsin Ag Connection - National/World News - Asian Demand for U.S. Soybeans Surges

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Asian Demand for U.S. Soybeans Surges
USAgNet - 10/20/2009

As farmers around the Midwest scramble to harvest their soybeans before potentially destructive weather strikes, forecasters are predicting a near-record soybean crop--and Asia is waiting for it. In recent weeks, China and Taiwan have committed to purchasing huge loads of U.S. soybeans, boosting expectations that export sales will reach a new high. China alone bought $7.3 billion in U.S. soybeans in 2008 and is expected to nearly double that this year.

As of the beginning of this month, sales of soybeans to China soared to 12.5 million tons from last year's 7.7 million tons.

"They've come on stronger and stronger," said Bob Callanan of the American Soybean Association. "Half of the soybeans we grow in this country we export. … Every fourth row we have is now going to China."

Huge economic growth in China over the past decade has lifted an estimated 200 million people into the middle class, transforming food consumption. With more cash on hand, more Chinese are eating higher-priced foods, particularly meat from livestock raised on grains, usually a blend of soy and corn. Although China grows sufficient corn to feed growing demands for now, it requires soybean imports to feed its growing livestock industries. The country imports roughly two-thirds of its soybeans.

The U.S. is the world's largest soybean producer, followed by Brazil, then Argentina. Drought conditions in South America, which harvests in the Northern Hemisphere's spring, diminished soybean stocks there, meaning buyers have been looking elsewhere to make up the difference.