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Reynolds travels with Iowa farm leaders on China trade mission
 
By DOUG SCHMITZ
Iowa Correspondent
 
BEIJING, CHINA — On their last leg of a 10-day trade mission, Iowa Gov. Kim Reynolds and state agricultural leaders told Chinese officials at a July 27 teleconference with reporters in Beijing that ag exports to the nation would increase and biotechnology acceptance would improve.
 
“It solidified the importance of agriculture to the state of Iowa, and the important role farmers and commodity groups play in feeding the world,” Reynolds said.

Less than two months before the historic trip, she was sworn in May 24 as Iowa’s 43rd governor. “They are looking for a reliable partner,” she explained. “They acknowledge their middle class continues to grow, wanting more protein.

“They are the largest producer and consumer of pork, but can’t meet their own needs. There’s tremendous opportunity for Iowa to meet those needs.”

Reynolds, who led the state’s agricultural trade delegation July 19-28, with Iowa Agriculture Secretary Bill Northey, representatives from the Iowa Corn Growers Assoc. (ICGA), and the Iowa Soybean Assoc. (ISA), said it was the first time all of the state’s farm groups jointly participated in a trip to boost demand for Iowa-grown food products.

“It’s my sixth trade mission to China because the country is a priority for Iowa and our farm families,” the former lieutenant governor said. “One of every six jobs in Iowa is tied to trade, benefiting every sector of the state’s economy.

“The Iowa brand is meaningful and carries to all markets across the world. Growing markets ultimately improve Iowa’s economy, and you do that by building relationships and meeting customers in their countries to better understand their needs.”

During the trip, Grant Kimberley, ISA director of market development and executive director of the Iowa Biodiesel Board, said he wanted to gauge the strength of the Chinese market for soybeans.

“While reading reports and listening to advisors can be helpful, you really don’t have a full scope of the market until you’re there, can verify the situation firsthand and visit directly with the people who buy, process and trade agricultural commodities,” he noted. “The delegation will further solidify with the leaders of China that we are partners in meeting mutual goals in food security, safety and sustainability.”

Reynolds said the team spoke with Chinese officials, including the vice premier, about how to yield more grain, meat, dairy and egg sales to the country and a faster, transparent approval process for genetically modified organisms. “The group feels progress has been made, but we need to continue conversations to improve opportunities,” she added.

She said the longtime agricultural trade relationship between Iowa and the Chinese people is stronger thanks to the friendship between former Gov. Terry Branstad (now U.S. ambassador to China) and Chinese President Xi Jinping. “We are truly reaping the benefits of (friendships) today.”

Northey said that history, Branstad’s new job and all of Iowa’s farm and commodity groups coming together will bolster agricultural trade to China’s 1.4 billion people.

“It has created opportunities to have conversations that probably would not have happened if traveling individually,” he said.

Northey said talks included the 100-day plan established by President Trump to narrow the U.S. trade deficit with China – $347 billion in 2016, according to the U.S. Census Bureau — and the comprehensive economic dialogue Branstad started with Chinese leaders.

Delegation members said there are several signs that trade relations continue to improve, and agriculture would lead the way. Indicators include:

•China agreed to import U.S. beef again, which officials say could equate to hundreds of millions of dollars in sales in the near term. Members of the trade team participated in a ceremony at a Wumart, a major Chinese retailer, in Beijing, celebrating the return.

•Four biotech events were recently approved
by China, though several others
are still pending.

•Chinese soybean processors agreed
to buy more than 460 million bushels of
U.S. soybeans worth $5 billion the week
before the trade mission.

•Discussions to increase turkey, egg,
dairy, pork, corn, ethanol and dried distillers
grain imports from Iowa occurred.
 
“We sensed a desire that agriculture is one of those areas (the Chinese) want to maintain and increase trade,” Northey said. “We expect four other biotech events will be approved and more transparency in the process. But there were no promises on the timeline.” 
 
As far as the trade deficit, when asked what kind of goods and services the Chinese are looking for from Iowa and the U.S., he said conversations with this group focused on opportunities to export more agricultural products.

“Beef is obvious,” he said. “Right now, there’s $38 billion in ag products – $8 billion from China to the U.S., and $30 billion from the U.S. to China.”

Moreover, last year, the United States exported nearly $6 billion worth of pork to China, which included more than $1 billion from Iowa, America’s top pork producer. 
During the last marketing year, China imported about 1.1 billion bushels of soybeans from the U.S, or more than 36 percent of its needs. One out of every four rows of Iowa soybeans ends up in China, officials said. Kirk Leeds, ISA CEO, who has traveled to China more than 20 times with farmer-leaders promoting Iowa and U.S. soybeans, said he expects that to grow, along with other commodity purchases.

He said an estimated 300 million-400 million people in China are expected to join the middle class in the next decade, with increased protein consumption that typically accompanies a higher standard of living. “My one takeaway from the trip is a sense of renewed desire and perhaps optimism in China about the ability to move forward on key trade issues,” he said.

“The depth of conversations we’ve had with individuals in industry and governmental levels has shown they understand the concerns of the Trump administration and Americans related to the trade imbalance.

“The (Chinese) are well aware of our concerns about meat products,” he added, “and the approval of biotech varieties and events. I’m optimistic. There are opportunities for the state of Iowa in so many areas.” 
8/18/2017