Protein powerhouse: Asia ‘key protein market’ by 2025; China, India leading charge

A recent market forecasting report on global protein consumption has predicted that by 2025 China and India will lead global protein demand with some 50 percent of total consumption worldwide, according to a new coverage by Food Navigator.

Some 50 types of proteins were analyzed and classified into six categories, including plant-based, meat, eggs & dairy, wild catch fish, aquaculture and emerging non-traditional types.

Bipartisan bill calls for full use of Harbor Maintenance Trust Funds

A bipartisan bill has been introduced in the U.S. House of Representatives calling for full use of import shipping assessment funds collected for their targeted purpose – maintaining U.S. harbors and waterways.

H.R. 2396, the Full Utilization of the Harbor Maintenance Trust Fund Act, was introduced last week by five leading committee representatives, including House Transportation and Infrastructure Committee Chair Peter DeFazio (D-Ore.), Ranking Member Sam Graves (R-Mo.), Water Resources and Environment Subcommittee Chair Grace Napolitano (D-Calif.), Ranking Subcommittee Member Bruce Westermann (R-Ark) and Rep. Mike Kelly (R-Penn.).

The bill would make it easier for Congress to appropriate funds collected in the Trust Fund for authorized harbor maintenance. That would include access to an existing balance of $9.3 billion in funds not being used, and would enable $34 billion more in expenditures over the coming decade. It reportedly would enable the U.S. Army Corps of Engineers to dredge all federal harbors to their constructed widths and depths.

Go here for more in-depth coverage.

SSGA making early strides in identity-preserved industry

By Eric Wenberg

Sometimes life comes at you quickly. Those words definitely define my short time as executive director of the Specialty Soya and Grains Alliance (SSGA).

Hopefully by now, you’ve learned a little bit more about the goals and missions of SSGA, and you’ve had time to adjust to being part of a bigger family than you enjoyed with your Midwest Shippers Association or Northern Food Grade Soybean Association memberships.

The work SSGA has set out to do is no small task. When the average person thinks about agriculture, is it safe to say they only think commodity farming? Probably. When you truly look at agriculture as a whole, we are one specialized group among many. Who then represents the farmers, processors and shippers of identity-preserved soya and grains and the products produced from those crops?

We do.

ATP grant moving along

The ATP USDA grant process is an amazing opportunity for SSGA and your business. When you hear people in the industry say this was a once-in-a-lifetime opportunity, those words couldn’t ring truer.

We’re proud to carry the banner on this exciting grant project. The $1.5 million will go toward branding of U.S. IP soya, and to the development of a digital hub for U.S. IP products. The grant awarded is for soybeans and shipping/logistics of soya products. For those of you worried specialty grains will be left out of this project, rest easy – we are working on that as well.

The ATP funds are supposed to help all those engaged in agricultural trade. As an alliance promoting IP use, we want to make sure our grains members get resources for their hard work.  Promoting U.S. IP practices abroad will be an effective way for you to draw value from the strict soya and grains supply chains you operate. In an era where consumers drive agricultural trends and trade, working together as an IP industry will keep us on the cutting edge of innovation. The ATP grant will help us act cohesively, just as we match the grant with our funds and other contributions from partner organizations.

SSGA membership structure

On April 17, SSGA formally adopted its membership structure. We currently are creating new membership materials and hope to have something unveiled to you shortly. Please look for a formal unveiling of SSGA’s membership structure soon. Renew with us when you hear about it.

One note about membership: As stated above, agriculture is becoming more and more specialized. When you look at agriculture across our great nation, ask yourself which groups are prioritizing the identity-preserved soya and grains industry. Looking at the ATP grant awards, the answer is pretty clear — SSGA exists to serve your industry.

U.S.-Japan trade update

As previously published, on just my second day on the job, SSGA met with officials at the Japanese embassy in late March to discuss barriers to trade. One of the issues we discussed was testing for trace amounts of GM material in food grade soybeans and grain. Lower minimum tolerances for trace purposes of GM material in conventional shipments can create trade difficulties from all country suppliers for this type of food product.

Since our visit, Japanese officials have confirmed Japan plans to hold off on implementing a lower threshold rule until at least April of 2023. However, if an agreement cannot be reached in the bilateral trade negotiations, there is a strong possibility an identity-preserved label will be created. We want our trade negotiators to stop this outcome.

Labels are confusing, and when things are confusing, people tend to shy away. We don’t want Japan or any other country to shy away from our soya and grains products. If an IP label is established, we’d need to act quickly to educate Japanese consumers that our products are safe, wholesome and affordable.

Either way, the delay in the threshold limit was a win for SSGA. We achieved this reprieve by working with other commodity groups, which really hits home the importance of building strong relationships with national and state ag organizations and harnessing those relationships. SSGA continue to leverage our partnerships with state and national ag organizations as we monitor the situation.

The IP industry is a garden to grow. I look forward to sowing this industry with you.

China’s request to review dropping anti-dumping tariffs on DDGS could trigger major global container shipping changes

By Bruce Abbe

Several SSGA container grain exporters, bulk transloaders and other logistics provider members are closely watching the China-U.S. trade talks for possible news that could trigger a resurgence of a leading U.S. export commodity – dried distillers grains with solubles (DDGS) – and with it a major shift in loaded global container shipping flows.

Background rumors emerged from trade circles earlier this month that China was “mulling” an end to its anti-dumping investigation tariffs on U.S. DDGS. Then U.S. Grains Council President & CEO Thomas Sleight confirmed to the news media that, indeed, USGC had asked the Chinese Ministry of Commerce (MOFCOM) to review the existing tariffs on DDGS. A Reuters news story noted a statement from China’s Commerce ministry saying it was investigating the request, and if it met legal requirements, they would decide whether to review the case.

However, a USGC spokesperson noted the request to China came from USGC, not from the U.S. Trade Representative (USTR).

While all those news rumors seem to make the matter pretty speculative at this point, that is the way things are in trade discussions and negotiations. Yet, if China’s DDGS trade tariffs are ended, there likely would be significant change in trade flows for DDGS and similar feed commodities like soybean meal.

MAJOR CONTAINER GRAIN EXPORT COMMODITY

At one point in time, DDGS accounted for just over half of all U.S. shipments of grain commodities in containers. DDGS made for a perfect “back haul” for ocean containers going back to China, in particular, where the lions share of import containers to the U.S. originated bringing in higher value consumer goods manufactured in China – i.e. the “head haul.”

According to USGC statistics, nearly 12.7 million metric tons (MMT) of DDGS were exported from the U.S. in 2015. Over 6.4 MMT went to China.

Then in 2016, China launched anti-dumping and countervailing duty investigations on imports of U.S. DDGS that carried an 80 percent tariff. China’s imports that year plummeted to just over 2.34 MMT. In 2017, China’s DDGS imports dropped to just 371,667 MT. Some slight progress was made that year when China agreed to eliminate its 11 percent value-added tax on DDGS, but kept the steep tariff penalty in place.

In the meantime, U.S. DDGS exporters worked hard – and with some success – to diversify their markets.

Vietnam, Thailand, Mexico and Turkey, in particular, became growth markets for DDGS.  Year-end totals for DDGS exports in 2016 came in at just over 11.3 MMT – below 2015’s total, but not a radical drop.   Prices received for U.S. DDGS exports, however, took a hit.

During this time, China also largely shut down imports of waste paper and scrap metal from the U.S. for recycling, which also were major container cargo freight. The natural container ‘back haul’ to China for ocean container steamship lines took a double hit. Transportation modes also evolved, as Mexico is largely a railcar served market, and Turkey is more of a barge-to-bulk ship served market. The Asian markets tend to be supported by container shipping.

Meanwhile, the U.S./China trade war’s biggest casualty – soybeans – have also been undergoing a strong effort by U.S. exporters to diversify its market. Southeast Asian countries, notably Indonesia and Vietnam, have been growth markets for container shipped whole soybeans and soy meal. Yet, like past experience with DDGS, prices have taken a hit.

‘BACK HAUL’ CHANGES AND CHALLENGES

The Journal of Commerce (JOC) reported (March 5) exports of waste paper to China plunged over 43 percent in 2018, and scrap metal dropped over 83 percent. DDGS container exports plummeted over 61 percent to China, although DDGS container exports to the world that year increased 20 percent, JOC reported, citing its sister agency PIERS data.

SSGA (and its predecessor, the Midwest Shippers Association) grew concerned last year and early this year over reports from shipping industry sources that the steamship lines, even at inland locations, were starting to turn their import containers around immediately and send them back by rail to the ports empty – rather than taking an available load of grain or soy products – because they needed to get the container back to China for the ‘head haul.’

SSGA over the last several months has sought to deliver the message to the ocean container shipping industry that there is strong market growth underway for shipping grain and oilseed food and feed products to Southeast Asia and the Asian Subcontinent markets in particular. More direct container service is needed to serve these markets efficiently with less vessel-to-vessel “transshipments” overseas.

Yet the supply chain challenges are still there.

A Hyundai Merchant Marine (HMM) senior executive told JOC, “(C)arriers are careful about where they ship low-margin commodities because then when the containers are emptied, they must be repositioned, at a cost, to China where most of the exports from the region to the U.S. originate.”

If China – under pressure to increase its imports from the U.S. in the trade negotiations – decides to remove its steep anti-dumping tariff on DDGS, the trade flow picture could take another dramatic shift.

Most U.S. soybeans shipped to China in the past have been whole beans, which were processed into soymeal for livestock and poultry, and soy oil. Yet, DDGS proved to be a strong option as well for feed use.

If China removes the tariff on U.S. DDGS, the shipping and exporting industry will likely see a retooling of that natural back haul for container shipping.

The U.S.-China trade talks, alternately said to be nearly completed and then pushed back until the next negotiators’ meeting, will determine much of the fate for U.S. soybean exports. Regardless, soybeans and soymeal exports will likely continue their growth trend in the new markets. However, China’s decisions hold the key for prospects for recovery in prices for U.S. exports for DDGS, soy and other commodities.

Bruce Abbe is senior director of specialty grains, products and transportation for SSGA. Reach Bruce at 952-253-6231 or drop him a line here.

Stakeholders express optimism, excitement for SSGA

By SSGA staff

Specialty Soya and Grains Alliance (SSGA) Chairman Curt Petrich and Vice Chair Bob Sinner recently attended the Southeast Asia Soyfood Symposium in Manila, Philippines. Petrich and Sinner were joined by other soyfood companies and U.S Soybean Export Council (USSEC) employees from around the world. Petrich and Sinner presented an outlook on the U.S. identity-preserved (IP) soybean supply and introduced SSGA, the organization that recently formed following the merger of the Northern Food Grade Soybean Association (NFGSA) and the Midwest Shippers Association (MSA).

Sinner reported that attendees expressed optimism and excitement for the new organization.

“Both USSEC staff and soyfood companies are pleased with the formation of SSGA because it continues the work of NFGSA focusing on IP soy production and supply,” he said. “More importantly, it’s a larger entity that can serve the needs of food manufacturers and promote human soy utilization activities across the globe. We are very happy with the excitement around SSGA and look forward to continuing our goal of serving as the market leader in the global food industry.”

How will late planting dates impact IP soybean supply?

Wet conditions continue to put a hold on the planting of identity-preserved (IP) soybeans, which are mostly grown across states in the Upper Midwest. Like commodity soybeans, IP soybeans are typically planted within a two to three week window in early May, depending on location, soil temperature, soil moisture and weed control options.

Soybean farmers constantly balance environmental conditions at planting with planting windows. To produce the best yield, farmers will wait to plant when soil moisture conditions are good and soil temperature is at 50 degrees Fahrenheit and increasing in the short (10 day) term. Wet soil limits soybean access to oxygen, inhibiting plant growth and increasing plant susceptibility to a variety of seedling diseases. Traffic on wet soils increases soil compaction, which reduces yield over the long term.

For IP soybean buyers, it’s important to be able to estimate supply of the product at harvest. David Kee, director of research for the Minnesota Soybean Research & Promotion Council, suggests researching crop progress and weather forecasts of your growers.

“Knowing your growers and having access to reliable weather data will greatly improve your ability to estimate supply,” Kee says. “Subscribing to the USDA’s NASS [National Agricultural Statistics Service] Crop Progress and Condition Reports for your region provides a great source of information about the cropping situation and can help aid in your supply predictions.”

SSGA and USSEC collaborating on upcoming projects and events

The Specialty Soya and Grains Alliance (SSGA) has been collaborating with the U.S. Soybean Export Council (USSEC) on multiple projects. The two organizations are working to complement efforts to export more crops abroad, and avoid duplication or confusion in policy and promotion.

SSGA Executive Director Eric Wenberg recently met with USSEC CEO Jim Sutter, Senior Director of Marketing Paul Burke and staff to discuss marketing of food grade and identify-preserved (IP) soybeans. Building on and recognizing USSEC’s past successes, SSGA will continue to pursue gaining recognition and promoting U.S. soy and grain achievements in identity-preservation, while also seeking new customers domestically and abroad.

USSEC staff is assisting SSGA in implementing the financial and compliance portions of the Agricultural Trade Promotion (ATP) grant from the U.S. Department of Agriculture. SSGA will use the ATP grant to create a digital marketplace for specialty soya and grains producers to communicate with buyers across the globe.

The organizations continue to work together to curate the Global Trade Exchange on Aug. 20-22 in Chicago. Plans are also in the works for the food grade soybean procurement classes for importers at the Northern Crops Institute in Fargo, N.D. on Oct. 19-25.

SSGA directors adopt membership structure at April board meeting

On April 17, the Specialty Soya and Grains Alliance (SSGA) held its second board meeting following the February merger of the Northern Food Grade Soybean Association (NFGSA) and Midwest Shippers Association (MSA). Board members heard financial and communications updates, as well as an update from Executive Director Eric Wenberg on recent SSGA activities and progress in establishing the new organization as a worldwide food industry leader.

The board considered a recommendation from the governance action team establishing member fees, and voted to adopt a fee structure that will permit the group to grow and succeed financially. Membership renewals from NFGSA and MSA will now shift to SSGA. Members should stay tuned for upcoming membership opportunities to arrive via email and snail mail soon.

SSGA Vice Chair Bob Sinner updated the group on the Natto Summit to be held Sept. 3-5, in Fargo, N.D. SSGA created teams to focus specifically on food grade soy and specialty grains, which will meet soon to discuss other 2019 and 2020 events, along with current and future grant programs from the U.S. Department of Agriculture’s Foreign Agriculture Service (FAS) and state organizations.

Sheila Sauve from Fargo-based Healthy Food Ingredients was elected to the board. Sauve will replace Aaron Skyberg, who departed the board with gratitude from SSGA for his service.

Congress talks infrastructure; Klobuchar touts $1 trillion plan

By Bruce Abbe

Infrastructure development is capturing a lot of Congressional bipartisan attention in Washington, D.C. these days, and recently in the early Presidential campaign with an ambitious proposal put forth by Sen. Amy Klobuchar, D-Minn. Whether or not all that attention gets translated into passing legislation remains to be seen.

AMERICA’S BRIDGES IN POOR CONDITION

The American Road & Transportation Builders Association (ARTBA) released its annual bridge report April 5. The report classifies 47,052 bridges in the United States as “structurally deficient.” ARTBA’s number is actually down a bit from 2018. ARTBA analysis is based on the U.S. Department of Transportation’s National Bridge Inventory database. “Structurally deficient” does not mean a bridge is unsafe to drive over, but does mean it’s in need of repair, or at the very least, some components need repairing.

Some 18,842 interstate highway bridges, one out of every three, have ‘identifiable” repair needs, up from 17,726 in the 2018 report.

CONGRESS HOLDS INFRASTRUCTURE HEARINGS

According to a report in Cargo Business News, “it appears Congress can’t get enough of talking about the need for action on our nation’s roads, bridges, waterways, pipelines, broadband, airports and more” infrastructure needs. There have been more than 14 transportation-related hearings in at least four Congressional committees since the new Congress was sworn in on Jan. 3.

Members from both political parties have expressed hope for an infrastructure bill this session. House Transportation and Infrastructure Chairman Rep. Peter DeFazio, D-Ore., has indicated he plans to treat an infrastructure package and federal highway transportation fund reauthorization as two separate bills, but no timelines for introduction and possible passage have come to light, CBN reports.

KLOBUCHAR ANNOUNCES $1 TRILLION INFRASTRUCTURE PLAN

Senator Amy Klobuchar, D-Minn., isn’t shy about staking infrastructure development as a centerpiece of her campaign leading up to the Presidential primaries, now not so far off with a host of potential Democratic challengers spending time in Iowa, a traditional early primary state.

On March 28, Klobuchar proposed a $1 trillion plan for infrastructure development covering roads, highways and bridges; updating locks, dams and ports; modernizing airports; rural broadband; drinking and wastewater community infrastructure and more. The tab would be paid for my boosting federal investment; bringing back “Move America Bonds, “Build America Bonds,” and Clean Energy Bonds that provide subsidies to local and state governments; reform of the Harbor Maintenance Trust Fund tax for its intended purposes; corporate tax reforms and more.

She contrasted her plan with a $200 billion infrastructure budget proposal President Trump has requested from Congress that the administration says will lead to a $1 trillion investment – a plan she says is “a mirage and … leaves the details up to lawmakers.”

Read more about Klobuchar’s plan.

 

U.S. soybean growers intensify specialty soybean commitment for world customers

As demand for plant protein increases, soybean trends also reflect an increased demand for non-GMO and organic U.S.-grown soybeans. With soy reigning as the preferred plant protein, the industry is responding with enthusiasm.

Meeting Market Demands for U.S. Specialty Beans

According to Aaron Skyberg, International Sales Director of Healthy Food Ingredients, meeting market demands means offering the best variety of specialty soybeans —including non-GMO and organic—for farmers and customers alike. To that end, Skyberg says, “We are working with third party soybean breeders. Our goal is to have the best yielding, best agronomical, pest resistant and quality soybean possible. It doesn’t happen overnight…. it takes three to four years, but we are making good progress.”

Healthy Food Ingredients, based in Fargo, North Dakota, draws on its growers’ multi-generational expertise and respect for the land. Skyberg explains, “We contract directly with farmers. We look at it as a strong partnership; we both have to be successful—with a good return on investment (ROI) for farmers, and quality that pleases our customers.” The company contracts with soybean farmers located in North Dakota, South Dakota, Minnesota, Wisconsin, Iowa, Illinois, Missouri, Kansas and Arkansas.

One of the farmers working with Healthy Food Ingredients is Lynn Brakke, a farmer with 40 years of experience, who farms 2,350 acres on a Moorhead, Minnesota, family farm started by his grandfather. Brakke’s son is now working with him, too, along with three other employees and seasonal part-time help when necessary. Brakke says he is looking for his farm to become more efficient rather than grow larger, and he has been successful in that quest.  His yields and ROI are better than ever, and he’s optimistic about what the next decade will bring.  Like most of Healthy Food Ingredients’ farmers, he stores the soybeans he grows on his farm until they are needed. He says his spring work will begin on May 1st, and for him, that date can’t come fast enough.

Specialty Soybean Plans for 2019

Regarding 2019, Skyberg says spring planting is on par with last year, and that contracts with specialty soybean (non-GMO) farmers will be in place by mid-March. Demand is increasing, especially for whole soybeans. Color and protein remain important qualities.

“Specialty soybeans, non-GMO, are selling in North Asia, Southeast Asia and Europe. They’re being used for tofu, miso, natto, tempeh, soymilk and soy sauce. In the U.S., we sell mostly organic soybeans, used for soymilk and soy sauce,” he adds.

Brakke is one of the farmers who grow organic soybeans. When he switched to all-organic crops in 1993, he didn’t know of another farmer doing that, and located the soybean markets for his own crop. At that point, Brakke says, organic rules were quite rigid on crop rotation, and there was not much marketing available. For a number of years, he grew and sold soybeans for natto, miso, soymilk and tofu, working through a broker who sold to Japan. Currently, he grows large graded soybeans used for tofu and soymilk, and sells them domestically.

Connecting Soy Consumers with the People Behind the Beans

By introducing global customers to the people behind their food, the U.S. Soybean Export Council (USSEC) connects U.S. soybean growers, producers, distributors and manufacturers with the world. As part of its public education initiative, USSEC also provides updates on soybean research, trends, and the various global markets.

For Skyberg, who also serves on the USSEC board of directors, connecting with customers often happens in person. He estimates that he travels for six to eight weeks a year, working with farmers. In addition, he makes regular visits to customers, spending one to two weeks at a time with overseas customers.

Brakke says he feels like he’s in his element on the farm, and loves what he does.

“I can’t imagine doing anything else. I believe in the organic model; it didn’t take long to see the wisdom in the system.”

Brakke only eats organic food, including soyfoods like veggie burgers and tofu, as well as soy that is included in various food items. Like many others who are increasing their consumption of plant protein, he has reduced the amount of meat he eats. And, like those who have helped make soy the preferred plant protein, he sees a strong and positive future for soy protein.