Chinese crusher positions itself on the new Silk Road

The Chinese government would like the historic Silk Road to be prominent once again, and U.S. soybeans could play an important role.

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Shaanxi Shiyang Group established its soybean crushing business in Xi'an, a city far from the Chinese coasts and other competitors. Preferring to rely on a strong transportation network that includes roads, river and rail the company believes it will be best for their business to be near their customers.

Sound familiar? It did to Governor Kim Reynolds and other members of an Iowa Soybean Association (ISA) trade mission last week as they visited the company.

"We have a lot in common," Reynolds told the CEO while pointing to the state of Iowa on a map on the back of an ISA business card. "We are in the center of the country far from the coasts too."

Chang Qingshan, CEO of the Shaanxi Shiyang Group, hopes the strategic position will capitalize on the reemergence of the Silk Road.

The Silk Road was an ancient trade route between China and the West during the Roman Empire. It’s how silk from the orients make it to Europe and how China received western goods in return.

China President Xi Jinping announced in 2013 a new $900 billion trade corridor would reopen channels between China and Central Asia, the Middle East and Europe. The new Silk Road will be on land and sea with experts saying it will be a way for China to continue to boost global trade.

"They don’t have as much competition in the central part of China. If you look at the re-establishment of the silk road going north and west out of China there’s a lot of advantages logistically," Kirk Leeds, ISA CEO, said after touring Shaanxi Shiyang Group's facility.

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Shiyang Group was first established in 1992 and transformed into a joint stock limited company in 1999. The Group focuses mainly on farming, breeding and processing but it also has integrated into other areas like the sale of soybean cooking oil. The CEO told the ISA delegation and Governor Reynolds that 35 percent of the beans they crush is from the United States.

"They told us that 35 percent of their soybeans come from the U.S., but that leaves 65 percent that didn’t," Leeds said. "You have to listen to customers, but at the end of the day when you look at the total value of soybeans, consistency, on-time delivery and financing, they know there is an advantage in buying from the U.S."

Qingshan told the Iowa delegation he continues to be concerned with foreign material in shipments coming from the U.S., but as the Iowa group drilled into the numbers, they found the percentage was below the allowable rate for the beans they had purchased.

Currently, one out of every four rows of soybeans are exported to China. The country is by far the largest soybean importer projected at 83 million metric tons, or a little more than 3 billion bushels.

Jeff Jorgenson, an ISA director from Sidney, and other U.S. farmers would like that number to increase as large surpluses drag commodity prices down.

“There’s no better opportunity to sell soybeans than right now," Jorgenson said. "There is affordability, and we have plenty of supply, so obviously we see that in the markets. There is no better opportunity than having the folks we have in China with  Ambassador Branstad, with the United States Soybean Export Council and our Governor that we shouldn’t be able to make strides in moving more soybeans to China.”

Originally published for the Iowa Soybean Association. Read more articles at www.iasoybeans.com.

 

Global aquaculture transformed thanks to investment by the Iowa Soybean Association

Two thousand years of aquaculture in China was revolutionized by one simplistic system developed by the U.S. soybean industry and supported with an investment by Iowa soybean farmers.

That’s the takeaway that soybean leaders celebrated while visiting the first Intensive Pond Aquaculture (IPA) farm in China as participants in an all-Iowa ag trade mission July 19-28.

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Without a checkoff investment by the Iowa Soybean Association (ISA), that success may never have been realized, said ISA Director Jeff Jorgenson.

"With 40 percent of China imports coming from the U.S. the IPA system is going to enhance fish production into a higher inclusion of soybean meal in fish diets," said Jorgenson, an ISA director and soybean farmer from Sidney and member of the delegation visiting China. "The investment by soy checkoff dollars again will turn into more of Iowa soybeans being utilized around the world."

Two thousand years of aquaculture in China was revolutionized by one simplistic system. That is the takeaway that soybean leaders celebrated while visiting the first Intensive pond aquaculture (IPA) farm in China located outside of Shanghai.

China has practiced aquaculture for more than 2,000 years. But it wasn’t until 2013 that aquaculture was paired with IPA technologies to create a system that produced healthier fish and uses fewer resources while being fed sustainable soy grown in the United States and other countries.

The ISA in partnership with the U.S. soybean industry funded research to develop the IPA system, which has been provided to China in a technology transfer. The IPA system has been proven to triple the yield of farmed fish in existing Chinese ponds while greatly reducing the environmental impact.

"Iowa soybean farmers were the first to sponsor this technology. We are very appreciative for their generosity and support," said Jim Zhang, United States Soybean Export Council (USSEC) program manager for aquaculture in China.

IPA technology requires minimal modification to existing ponds and creates a zero water discharge system that increases yield with no negative impacts on the environment.

Water is diverted around the pond to keep it mixed. Fish are housed in concrete pens that have screens on the front and back. The circulating water creates a current that mimics the natural habitat of the fish while also removing waste manure. Other species of fish are contained in the ponds outside of the pens to feed off the nutrients.

The IPA technology also allows China’s limited water resources to be conserved and recycled. Excess waste can also be removed and used as fertilizer or biofuels.

"In 2013 when the project started there were only three cells. Now there are over 3,000 cells in China with the total construction investment, not mentioning the operational investment, is worth around $44 million," Zhang said.

The sky could be the limit for the new technology. Zhang believes the number of fish raised using the IPA system could double in the next five years.

"This technology helps to break all the bottlenecks that face China's aquaculture," he said. "Bottlenecks like labor, water, environmental and food safety."

Governor Kim Reynolds, who is leading the delegation, toured the site and fed some of the thousands of carp species raised on the farm.

"I'm extremely proud of the ISA to think that they were the original investor in this IPA. It is a win-win. Our farmers benefit from the increased use of soy, and these farms are reducing costs and expanding,

"It is a great example of what we want to see happen on the trade missions that we are a part of,” Reynolds added.

Karey Claghorn, Chief Operating Officer for the ISA, also toured the aquaculture farm powered by U.S. soybean meal.

"IPA has revolutionized the industry. It changed the way they could look at their in-pond systems," she said. "It allows them to improve water quality and environmental footprint. It was an exciting investment for us as it has worked out."

Originally published for the Iowa Soybean Association. Read more articles at www.iasoybeans.com.

Caring half a world away

By Joseph L. Murphy

It started with 16 farmers and soybean association staff members traveling to Asia on an annual trade mission to thank industry partners for their continued patronage of U.S. soybeans. But, for the participants of the trip, I believe it turned out to be much more.

The American group, representing farmers who grow soybeans in Iowa, South Dakota, Nebraska, Minnesota and North Dakota, not only showed their appreciation for the business, they built friendships and a deeper understanding of their customers’ needs.

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That was the business side of the trip. But I think the trip also etched cultures, traditions and personalities into the minds of the participants; creating memories and relationships that won’t soon be forgotten. I know I gained a deeper appreciation for the U.S. and Filipino servicemen who fought, island by island, to liberate the Philippines during World War II. That bond now, 68 years old, is still held in high regard when talking to the people of the Philippines.

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I also gained an appreciation for the help that we can offer. High-quality soybeans grown in the Midwest are providing protein to a growing world and, last week, farmers also provided relief to victims of Typhoon Haiyan.

Was it worth 10 days away from family, businesses and farming operations? In a time of high-tech gadgets that can bring people half way around the world into the palm of your hand the question could be asked why wouldn’t you just conduct the trade mission via Skype, Facetime or another service?

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For me, it boiled down to the opportunity of learning that, although oceans separate us, we all have similar goals. Whether it was the countless commuters invading the streets in Manila every day or the throngs of people riding their scooters in Vietnam, we all have goals to provide for our loved ones and care for those less fortunate.

I know I will always get teary eyed when I think of the little girl, about the age of my daughter, that I passed one night sleeping in a doorway in Ho Chi Minh City. But I also know that it will serve as a reminder that there are people out there in need and that I should continue to do everything that I can to help.

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It also helps me to know that this trip (and my job for that matter) started with the power of a single piece of grain grown in the Midwest by caring people. Soybeans and other commodities continue to unite people across the globe in a positive way and this trade mission was proof positive of that on many levels.

But, I must admit that while having face-to-face meetings is vital for our trade partners in places such as the Philippines and Vietnam, technology still has its place! As I was a world away, meeting these wonderful people, I was still able to keep in touch with the ones I love in Iowa.

Originally published for the Iowa Soybean Association. Find more great stories at: www.iasoybeans.com/news