Buyers Tour Generates Optimism for Future Exports

US - A team of Chinese grain importers recently completed a 10 day US tour to learn more about US agricultural operations and shore up relationships with US grain suppliers.
calendar icon 4 August 2010
clock icon 3 minute read

Team members represented interests from Beijing and Shandong Province in the north, the central provinces of Hubei, Fujian and Shanghai, and the southern provinces of Guangdong and Guangxi. The team travelled through Minnesota, Iowa, Illinois, Indiana and California.

Since the US Grains Council first opened the door to US distiller’s dried grains with solubles (DDGS) in China, imports of the US product have grown from virtually nothing in the first half of 2009 to 651,000 metric tons in the second half of the year. The grains industry anticipates that the Chinese will purchase 1.5 million tons of US DDGS in 2010, with some experts saying there is a realistic possibility for double that amount.

China has become Asia’s largest importer of US DDGS as it is used primarily in the poultry sector, with significant potential for growth in dairy and swine production.

“The Chinese team has focused principally on corn, which, along with soybeans, are the primary commodities in which the Chinese are interested in expanding US purchases,” said Kevin Latner, USGC senior director in China, who accompanied the group.

“Team members, evenly divided between traders and millers, are also interested in establishing direct contact with producers and transporters so they can originate US purchases,” Mr Latner said. “To that end, team members are studying production and identification of quality characteristics, logistics and DDGS handling and documentation,” he said.

Donna Jeschke, director of the Illinois Corn Marketing Board, met with the team on 25 July in Chicago to help them learn about the commodity sampling done before the product is shipped. Jeschke said she and her husband learned when visiting farms in northern China, that despite differences in the scale of their farming operations, Chinese and US farmers share the same concerns about seed, prices, bugs and weeds.

The team had a good tour of the United States, Qiang “Hanver” Li, chairman of the large, state-owned JC Intelligence Co. in Shanghai said. Speaking through an interpreter, Mr Li said his company would continue to purchase corn and soybeans, and that the visit left him very confident that US grain producers and handlers have the ability to meet export agreements.

This is good for both the United States and China, Mr Li said, adding that if the United States has a good harvest, China will buy more, which is good for the balance of trade.

While in the United States, the Chinese team toured three ethanol plants, two in Iowa and one in Indiana.

“We had 14 of the top 20 Chinese DDGS buyers tour a modern ethanol plant,” said Randy Ives, senior vice president for Hawkeye Gold in Menlo, Iowa, one of the team’s stops. “It was fantastic! The team members who visited Hawkeye Gold did a great job of educating themselves about ethanol production prior to their arrival at the plant and they generated sound questions,” he said.

There may also be other reasons for optimism about increasing DDGS demand over the next five years. One avenue of growth is the use of US DDGS for aquaculture in parts of Asia, and “China may eventually see that as an opportunity as well,” Mr Ives said.

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