SSGA talks export logistics at JOC Inland Distribution Conference

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The outlook for U.S. exports and export shipper logistics challenges were the central focus of a key panel of experts at the Inland Distribution Conference held Oct. 21-23 in Chicago. The Specialty Soya and Grains Alliance (SSGA) was represented on the exporter panel.

There was record turnout for this year’s annual event, which focused on inland intermodal container shipping hosted by the Journal of Commerce (JOC)/IHS Markit. JOC is the leading international intermodal shipping news media source covering global trade, ocean shipping, rail and trucking drayage transportation for importers and exporters.

SSGA Strategic Advisor for Trade and Transportation Bruce Abbe participated in a panel discussion on export obstacles and opportunities looking at how U.S. trade disputes, tariffs and reciprocal tariffs on goods to and from China and other trading partners are challenging U.S. exporters as well as importers. Scott Sigman, transportation and export lead for the Illinois Soybean Association; Sean Mulford, trader and broker for Agniel Commodities; and Don Lake, senior vice president, Enterprise Development for Dunavant Logistics Group, a division of major cotton exporter Dunavant, were the other panelists.

Container export outlook

The North American economic and freight outlook is slowing, in line with a slow down in the world economy, putting a damper on the outlook for increased trade and related transportation, Paul Bingham, IHS economist, told conference attendees, citing several economic indicators.

However, if a new trade deal between the U.S. and China is finally inked, that could lead to a sharp increase in exports, shipping and logistics demand that could strain the transportation infrastructure, exporter panelists said.

The pending Phase One partial trade agreement between the U.S. and China has not yet been announced in detail. If an agricultural trade deal is confirmed, that could well spur exports of several commodities. However, the main commodity to most benefit will likely be whole soybeans that are shipped in bulk vessels to China, as opposed to containers.

One potential game changer for container shipping, Abbe noted, would be if a deal is made that gets rid of China’s current high tariffs on U.S. dried distillers grains (DDGS). In 2015, DDGS accounted for nearly one half of all containerized grain exports from the U.S., and made for a natural backhaul for containers to China for use by consumer goods manufacturers. China’s 80 percent tariff in 2015 dried up DDGS exports to China. U.S. exporters have largely been successful in diversifying to other markets – albeit with a decline in prices. Reopening China’s potential big demand for DDGS, which the U.S. Grains Council is pushing for, could add a big demand resurgence for the feed commodity.

Sigman and Abbe noted the U.S. soybean exporters have been making steady progress in diversifying to other markets as well, notably to Southeast Asia’s growing population countries, but the China market is too large to replace in short order. Meanwhile, China has ramped up its ag commodity purchases from South America.

The panelist all agreed that the impact from African swine fever is having a dampening demand on soy and grain export demand in China, and a further threat if it spreads wider across Asia.

Mulford was blunt that the U.S. needs to get serious about improving our own export infrastructure, citing the deteriorating status of our locks, dams and barge shipping infrastructure in particular. He noted it’s a stark contrast to the rapid export infrastructure development under way now in the Black Sea region.

Lake had a different take from earlier presenter’s forecasts of flat global trade next year keeping a lid on shipping demand. If the scope of the trade deal that’s talked about comes through and spurs quick new demand from China, he said we could see some major logistics challenges occur that the shipping industry is not ready for.

Shipping Logistics

Panel moderator Mark Szarkonyi, executive editor of JOC, asked Abbe about the need for additional intermodal shipping locations in the inland – a consistent message that SSGA has brought to these circles.

Abbe noted there are serious intermodal development initiatives underway in Wisconsin and North Dakota at this time, along with rumored developments in the works in other locations that could improve capacity for exporters. He encouraged ocean carriers and railroads to take a serious look at these developments, with an eye to helping them work for all parties.

Worsening congestion around the main inland container yards, increased trucking costs, and periodic shortages of trucking options are driving forces behind the new inland intermodal development initiatives, he noted.

Abbe also encouraged carriers and railroads to be more open and work with shippers and forwarders on container repositioning programs to make equipment more available where it is needed by exporters.

Detention and demurrage penalties at ports and terminals is another hot issue that came up. Mulford said it consumes a huge amount of time to sort these penalties out. A current Federal Maritime Commission initiative pushing for clarity and consistency in these procedures to minimize unfair penalties is welcomed by shippers.

SSGA helping to improve rural infrastructure

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The Rebuild Rural Infrastructure Coalition is comprised of more than 250 organizations from across the country focused on rural communities and U.S. agricultural producers. The coalition is hosted and operated by the National Farm Credit Council, and is actively building consensus in Washington, DC, for action on rural infrastructure. The Specialty Soya and Grains Alliance (SSGA) met with the group to join in its activities.

Advocating for transportation infrastructure improvement to highways, bridges, railways, and port facilities is the most obvious need. Fifteen percent of the nation’s rural roads have pavements in poor condition with 21 percent in mediocre condition. Ten percent of bridges in rural communities are structurally deficient. SSGA is joining the coalition to bring focus to the needs of small business and farmers to connect with customers domestically and abroad.

“When everyone talks with pride about connecting the farm to the table, people forget that it’s the infrastructure that links it together,” says SSGA Executive Director Eric Wenberg. “Accomplishing action in agriculture requires bipartisan support and wide ranging coalitions. By joining Rebuild Rural, SSGA will connect with like-minded organizations and lend its assistance to the cause of helping rural communities.”

Rebuild Rural believes that federal resources can’t fill the entirety of the need and recognizes fulfilling the promise to rural residents requires creative solutions that pair federal, state, and local investment along with private sources of capital. This matches SSGA’s philosophy in transportation, working across the various parts of the supply chain to connect farmers with food manufacturers efficiently.

“SSGA is a trade association of business people like farmers, brokers, and transport companies who are part of the 15,000 jobs supported by each $1 billion in U.S. agricultural exports,” Wenberg says. “An SSGA member is a company that looked around at rural America and saw the wisdom of pursuing a value with the premium available for food grade specific variety commodities. They deserve respect, support, and a place at the table in national level decisions about what happens in our farm country.”

SSGA offers strong support for port terminal modernization

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The Specialty Soya and Grains Alliance (SSGA) recently sent a letter of support for the Northwest Seaport Alliance’ (NWSA) and SSA Terminal’s, LLC’s (SSAT) joint application for infrastructure funding from the U.S. Department of Transportation Maritime Administration’s (MARAD) Port Infrastructure Development Program (PIDP).

Because a majority of SSGA members ship by intermodal container to supply high quality food grade products to their customers, the NWSA Seattle and Tacoma ports handle a strong share of the exports that go to Asian markets from our base of member exporters located in the Midwest.

The funding sought by NWSA and SSAT would be used for modernization of Terminal 5, a long- time key export terminal in the Seattle Harbor that has fallen nearly dormant because it is unable to adequately serve the new larger ships deployed by the main steamship lines.

Click here to read the complete letter, signed by SSGA Executive Director Eric Wenberg.

 

Soy and grain industry leaders gather for U.S. SOY Global Trade Exchange and Specialty Grains Conference

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Last week, over 800 soy and grain industry leaders, buyers and suppliers from 53 countries gathered in Chicago for the U.S. SOY Global Trade Exchange and Specialty Grains Conference (GTE). The event was co-hosted by the U.S. Soybean Export Council (USSEC) and Specialty Soya and Grains Alliance (SSGA).

With 52 trade show exhibitors, attendees were able to network and share ideas on how to move the industry forward.

“The trade show is a chance for us to meet new customers and discuss the quality and availability of products that are grown in the U.S.,” says Brandon Bickham, export sales manager for The DeLong Co., Inc.

Aside from the trade show, plenary sessions and breakout sessions allowed attendees to network and learn from experts in the soy and grain industry. Sessions were held on a variety of topics such as trade, crop production and supply, shipping, communications and more.

“We were honored to have USDA Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney address the crowd at GTE, says SSGA Executive Director Eric Wenberg. “McKinney and the other speakers at GTE presented critical topics being faced by those in the grain, soy and shipping industries. We have to export to survive and we need better agreements, faster.”

Pradnya Joshi, trade editor for Politico, led a conversation with Professor Mary Lovely from Syracuse University, on the future of trade. Lovely reported the need to stay positive on the current state of world trade.

“Traditionally, the United States has led the way in trying to make these trade agreements happen and maintain these open markets. We have taken our market access for granted,” Lovely said. “Policy has changed in all of those dimensions. There are large stakes at play and we need to focus on a positive outcome. If we get some decent policy, there is no reason why this trade expansion shouldn’t be robust. A recent survey shows that 62 percent of Americans support free trade and we need to keep educating about the benefits of working in trade with other countries.”

Breakout sessions included a panel presentation featuring four U.S. food soya exporters about the 2019 crop production outlook. Panel members included Sheila Sauve, Healthy Food Ingredients, Chase Holoubek, Scoular, Austin DeLong, The DeLong Co., Inc.; and Michael Youmans from Clarkson Grain Company. Gary Williams from United Grain Corp. moderated the panel.

Although they represent four different soybean-growing regions, panel members presented very similar outlooks.

“Overall, soybeans in the U.S. faced early rain and late planting, which led to many acres of Prevented Plant,” Holoubek says. “This year, September will likely be the most important month for the growing soy crop. Typically August is the most important.”

Another breakout session featured panel members from three major container shippers: Cameron Bowie, Hapag-Lloyd, Allen Clifford, Mediterranean Shipping Co. (MSC), and Paul Lesnefsky from Ocean Network Express (ONE). The panel discussed current trends and challenges in the global container shipping industry.

Bruce Abbe, SSGA Strategic Advisor for Trade and Transportation, moderated the panel.

“Global container shipping, like U.S. agriculture, is feeling the sharp impact of the trade war between China and the U.S. The normal trade lanes of imports bringing in manufactured products from China, and ag exports back from the U.S. are undergoing change,” Abbe sai. “We heard about the logistics challenges the shipping lines face needing to reposition empty equipment back to China from our new target markets in other countries.”

Shippers in the audience also heard more about the upcoming cost increases coming starting next year with the International Maritime Organization’s worldwide mandated use of low sulfur fuels or other pollution preventing technologies. MSC’s Allen Clifford called out the need for investment in the whole transportation infrastructure, “without more infrastructure at every level, trade will be something harder and harder for America.”

“Chicago is the inland center for container shipping in the U.S., and we were privileged to have a panel of very high level carrier leaders who are well informed about the trends underway,” added Abbe. “SSGA staff also invested time conferring with them separate from the conference session on some potential new developments for expanding intermodal shipping in the Midwest that hold promise.”

Going together: ATP funds start working for soya and specialty grains

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By Eric Wenberg

I have three big developments to write about on the export market promotion front. As previously reported, the Specialty Soya and Grains Alliance (SSGA) signed an agreement to use Agricultural Trade Promotion (ATP) funds with the U.S. Soybean Export Council (USSEC), per request by the Foreign Agricultural Service (FAS) and U.S. Department of Agriculture (USDA) in its award. July 19 was a big day, with a fair and equitable deal made to use USDA’s funds collaboratively with back office support from USSEC. That is a benefit we are pleased with. USSEC has an excellent compliance and regulatory record with USDA that we benefit and learn from. If we use ATP funds poorly, or make a mistake, we have to pay it back. This minimizes our risk and maximizes our learning opportunity. As they say in Africa: If you want to go fast, go alone. If you want to go far, go together. I think that’s true in this case.

Secondly, along with the soy industry associations, I met with USDA and FAS officials on July 23 in Washington, D.C. At that meeting  Mark Slupek, FAS Deputy Administrator, Office of Trade Programs, explained that the ATP funds were the first budget increases to the export market development program since 2006, and they had effectively even been cut since then due to budget sequestration. That’s when Congress cuts funds they already authorized. Thus, it’s important for SSGA to document and write about our successes. Rest assured, we will. Soon after, USDA, USSEC, and SSGA agreed on an additional allocation from FAS, increasing our ATP funding from $1.5 million to $2.0 million. We were invited to request additional funding next year based on our use of the funding. SSGA was also invited to join USSEC for $300,000 in additional funding to make joint strategy and activities to open the market in India. I have had several conversations and shared some work with USSEC’s operations professionals. As I’ve stated before, I am excited to work with them.

This all points to having the financing to achieve our aims to be a leading voice in identity-preserved (IP) field crops. We are happy to work through and with the groups making this a priority. At present, we are writing some Requests for Proposal (RFPs) regarding the digital IP marketplace project and working to get those funded for contractors. The action teams are making other plans for our projects abroad.

We will continue to keep our members engaged and updated on the latest SSGA news.

Hang Tung Resources supports U.S. soybean industry with GTE sponsorship

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Hang Tung Resources (USA) Co., a U.S. commodity trading company located in the Chicago area, is a new sponsor of the 2019 U.S. SOY Global Trade Exchange & Specialty Grains Conference (GTE).

Hang Tung Resources started in the 1960s doing textile trading in Asian destinations and officially registered in 1984. The company is made up of four areas: real estate, investment funds, agricultural processing and commodity trading. The company has had its U.S. location since 2014, focusing primarily on trading agricultural products such as cotton, oilseeds and grain.

“Hang Tung opened its trading headquarters in Chicago not only to be close to the global futures pricing center, the Chicago Board of Trade, but also to be in the heartland of one of the world’s largest crop production regions and transportation hubs,” says Chen Ding, merchandiser at Hang Tung. “This allows us to understand the crop status, ensure product quality, and establish connections between the origins and destinations of these products.”

With GTE being held in Chicago this year, Hang Tung employees are looking forward to taking advantage of the global event being held right in their backyard.

“The Global Trade Exchange provides an opportunity for us to meet with potential customers from around the world,” Ding says. “Last year we had a trade show booth at the event and not only did we talk to many buyers, we made great connections in many of our targeted markets. There is high enthusiasm among our staff for the event again this year.”

Events like GTE provide an opportunity to meet many customers and take Hang Tung’s core values worldwide.

“Our goal is always to provide the best quality of product we’re providing in the most productive and efficient way,” Ding says. “We hope to grow with our customers and we take great pride in every step of the export chain that we participate in.”

Attendees can visit Hang Tung Resources in booth 1113 at the GTE trade show Aug. 20-22. To learn more about GTE and other event sponsors, visit www.grainconference.org.

North Dakota, Wisconsin Soybean Boards see value in sponsoring the 2019 GTE conference

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The U.S. SOY Global Trade Exchange and Specialty Grains Conference (GTE) is approaching quickly and it could not happen without the support it receives from other businesses, companies and organizations. Five U.S. Qualified State Soybean Boards (QSSBs) are supporting this year’s conference, including the North Dakota Soybean Council (NDSC) and Wisconsin Soybean Marketing Board. 

NDSC is one of this year’s platinum sponsors. They have been sponsoring the conference for over five years, ultimately seeing this conference as an opportunity for farmer leaders to meet with international customers and connect with exporters. 

“The networking opportunities that the GTE continues to provide year in and year out are vital to promoting the equality of U.S. soy,” says Austin Langley, NDSC vice chair and market development committee chair. “GTE is an opportunity to show how dedicated the U.S. soybean industry is to its customers on providing the best product in the world.”

The second QSSB sponsoring the conference is the Wisconsin Soybean Marketing Board, an original sponsor of the annual event, and currently a gold sponsor. 

“GTE is a very important program,” says Bob Karls of Wisconsin Soybean Marketing Board. “The Wisconsin Soybean Marketing Board feels it is an excellent opportunity to bring buyers and sellers together to showcase the U.S. soybean industry to our international customers.”

Visit www.grainconference.org to view the full list of sponsors.

Taking care of business: following SSGA merger, Sue Schmitt signs off

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Any writer will tell you: It helps to have a proofreader with a keen eye. For Bruce Abbe, Sue Schmitt was that person for the Midwest Shippers Association (MSA).

“I helped Bruce with his communications and looking at things from a member’s point of view so that we sounded right and we’re getting our point across,” she says. “Somebody once asked me if I was a teacher. I have a knack for finding grammatical errors.”

Schmitt recently departed her position as MSA’s executive assistant following a merger with the Northern Food Grade Soybean Association to form the Specialty Soya and Grains Alliance (SSGA). She was the company’s jack-of-all-trades for eight years, handling memberships, registrations and helping to grow and coordinate what is now known as the U.S. Soy Global Trade Exchange and Specialty Grains Conference.

“I was the number one contact,” she says. “When people called or sent an email, I was the first one they talked to. I liked talking with people, getting our goals across and taking care of business. There was never a dull a moment.”

Former MSA President and CEO Bruce Abbe says Schmitt was vital to helping to build the U.S. Soy Global Trade Exchange and Specialty Grains Conference, which began in 2002, into an international tradeshow. When Schmitt worked on her first Conference in 2011, only a few hundred buyers attended. The joint SSGA/USSEC Conference has now grown to around 800 attendees.

“Sue’s been a mainstay support provider for me for a number of years, in particular in work on the Conference,” says Abbe, a strategic advisor for trade and transportation with SSGA. “She had considerable experience in conference support and management when she first stepped in to help me out several years back, and stayed on.”

Schmitt says one of her favorite programs during her tenure at MSA was working with an advertising co-op program offered to members.

“That allowed them to advertise on more of a level than they could afford, or didn’t have the opportunity to show their information,” she says. “We really helped members who didn’t have large budgets.”

Prior to joining MSA, Schmitt says she didn’t fully appreciate the business instincts needed to excel in agriculture.

“Generally, people think Mr. Farmer is out just there growing crops and they take it to a grain elevator,” she says. “People don’t realize the entrepreneurial instincts of farmers. It was very informative and eye-opening.”

Schmitt isn’t retiring, but hopes to spend more time with her five grandchildren.

“My house needs to be cleaned, but I don’t want to do that,” she says, laughing. “I’m still keeping busy and wish everyone well with the new organization.”