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Cultivating Trade: Hosting Delegations Builds Relationships
North Dakota Ag Connection - 01/08/2019

The visitors huddled around Craig Converse in his rural Arlington, S.D., machine shed as he pulled up a mobile phone app that detailed data from a nearby soybean field he'd harvested just days before. The app had recorded yield and seed moisture data, giving Converse instant information about his crop, which intrigued Converse's visitors.

The guests to Converse's eastern South Dakota farm were also interested in learning more about the state's soybean crop because they just may be the ones buying it. Soybean traders and buyers from Mexico trekked across farms from Nebraska to South Dakota and up to North Dakota early in the harvest season to get a feel for the size and quality of the coming soybean crop. As the United State's second largest soybean customer, the Mexico market is worthy of cultivation. That often happens one farm visit at a time.

"The biggest impact is in making personal contact and building relationships with buyers," Converse says. "They can put a face to an order. They can say they've been there and have seen how farmers here care for their land and the crops. That makes an impact in the long term on who they make an order with."

Converse showed the eight-member trade team around his farm, letting the delegation get behind the wheel of his John Deere combine. He showed them a bin half-full of newly harvested seed soybeans and took them to corn and soybean test plots located on the farm.

Each year the South Dakota Soybean Research and Promotion Council (SDSRPC) hosts trade delegations from across the globe. In 2018, six teams came through the state representing a range of soybean-buying customers including Malaysia, Mexico, the Philippines and China.

A trade dispute has curbed the flow of soybeans to China, which illustrates the need to build relationships with buyers all over the world.

"Trade relationships are especially important now," Converse says. "The SDSRPC has always worked very hard at opening new markets and building more soybean demand. For now, we've lost our number one whole bean customer, so that stresses the importance of being diversified."

For some of the Mexican delegation, this September trip to South Dakota was their first opportunity to see how U.S. soybeans are raised and harvested. For others, like David Rey Rojas Lopez, U.S. visits are an important way to gauge the coming crop. Lopez is a trader for Primos & Cousins in Culiacan, Sinaloa, Mexico. He buys and sells U.S. soybean meal, corn and canola meal. This is his third crop tour to the United States to get a first-hand look at the crop he'll soon be buying.

"I look for many things," Lopez says. "This is a great looking crop and the yield is good. I can see the quality, too."

Mexico is one of the biggest, and closest export customers for U.S. soybeans and soybean meal.

"Mexico is an important market for us so we're glad to have agreements with them and other countries to help fill the void left because of China," Converse says.

Elk Point, S.D., farmer Doug Hanson also hosted a trade delegation this fall, this one from the Philippines. The crew of nearly 20 people represented soybean buyers and traders. The Philippines also represents a sizable market for U.S. soybean meal.

"The whole point is to keep connected with the people who are buying our product," Hanson says.

Hanson explains that trade team visitors are looking to see what kind of crop will be available from South Dakota farmers, and the growers are more than happy to show them.

"Trade teams are a good way to stay in contact with our customers and to let them know that we appreciate them, too," Hanson adds.

While trade teams come to South Dakota to learn about the crop and the farmers who grow it, Converse says hosting customers on his farm helps him learn more about their concerns, their needs, what they see in terms of growth and market opportunities.

"Are GMOs a concern, what about sustainability, what kinds of things are they looking for or do they just buy on price? Since we are targeting livestock, what kind of production trends are they expecting? They want to know that we have a good, high quality crop. They know that our soybeans are high in amino acids and that they make good, quality feed. They understand that South American soybeans may have higher protein, but their animals perform better on northern soybeans," Converse explains.

Lopez is pleased the United States and Mexico have worked out a trade agreement which should prevent trade disruptions between the two neighbors.

"I also want to know how farmers are feeling about the current trade situation," Lopez adds.

While hosting the trade team from Mexico is a good way to strengthen relationships, Converse knows it may not lead to more specific sales for his soybeans as most South Dakota beans are exported to Asia. Mexico sources most of its soybeans and soybean meal from locations closer to the Gulf of Mexico. However, increasing overall global demand for U.S. soybeans is a good thing. The trade dispute with China has greatly impacted the price of U.S. soy products on the world market, which is increasing profit margins for those buying the now-reduced U.S. soybeans.

"It's unfortunate that with all the work we've done in China and all the effort we've put forward there can be disrupted so quickly," Converse says. "I'm hopeful that our China markets can return, and we'll also have these additional markets that have built up in the meantime."

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