It’s no secret that China is the US’s largest customer for soybeans. Phil Laney, retired from the US Soybean Export Council as Director for China:
“It certainly is the largest market for US soybeans, that clearly is going to continue because they have increased their economy, people are eating better, they’re eating more meat and protein products, soybean forms an important ingredient for that production.”
The global economic situation has been a concern for ag exporters, according to Laney, and the economic health of China has been of particular interest:
“They’re a lot of people who are worried about the Chinese economy, I mean it has come down a little bit, and there are a lot of internal bubbles and questions and so forth and so on. I don’t believe it’s going to significantly wane, there might be little bubbles from time to time, but I believe it’s going to be a steadily growing market for US agriculture.”
Laney explains that China is miles away from being self-supporting when it comes to agriculture and their emerging middle class:
“I think their best potential is better yields and better technology…agricultural technology, and they do a lot of development themselves. But, a lot of their research and development is done by state institutions whereas we do them by companies; companies whose future and whose profitability is reflective of their ability to get those things to market.”
While China has more cultivated land mass than the US, the country can’t seem to monopolize on agricultural technology or significantly increase production. Laney explains why:
“The Chinese research and technical developments don’t get to market very well. I mean, we’re always reading that they’ve earned this, they’ve developed that but it never really shows up in the market place. Of course, they have some structural problems they’ve got so many people on the land, and the land holdings are so small, it’s very hard to make them efficient without somehow coming in and making the farms a lot bigger. I mean, that’s part of it, and again, the quality of the seeds and the quality of their other inputs is very dubious.”
Laney spoke at the 23rd Annual Joint commodity Conference earlier this month. To view all of Laney’s presentation, go to our website www.sfntoday.com...
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