Rail, Transportation Concerns Power Discussions

Participants at the 2014 U.S. Soy Global Trade Exchange were treated to a harsh reality Tuesday and Wednesday at the Wisconsin Center in Milwaukee–infrastructure drives growth, and infrastructure, both globally and in the United States, is degrading.

Walter Kemmsies, Chief Economist for Moffat & Nichol, painted a bleak picture about the U.S. Economy, one that involved a path to a stagnant economy with outdated infrastructure.

“If you want the economy to grow, you need to hitch it to something that will help make it grow,” he said. “We need to concentrate on exports to get that growth.

Kemmsies pointed to Brazil as a country that has developed a plan for infrastructure, one that could have lasting impacts on the U.S. Soy industry. He says Brazil has invested in a major highway that will change how it ships grain to Asia, which means China will be able to buy much cheaper beans then those currently bought from the U.S.

That prospect worries Minnesota Soybean Research & Promotion Chairman Paul Simonsen.

“The big thing with Brazil is they are going to be such a low-cost seller of soybeans that we aren’t going to be in the same ballpark with them,” he said.

Minnesota Soybean Growers Association director Joel Schruers, who sits on the Market Development action team at Minnesota Soybean, agrees.

“If we lose this market to Brazil it is going to be very upsetting because we don’t have to lose it,” he said. “If we do, we just gave it to them.”

Kemmsies says the U.S. can avoid future troubles by concentrating on rebuilding infrastructure, and then by pushing exports.

Rail Concerns present
Several breakout sessions at the conference focused on rail transportation and the logjam affecting all sectors of rail shipments. Jay O’Neil of O’Neil Commodity Consulting and Senior Agricultural Economist at Kansas State University, says the rail epidemic is bigger than just agriculture.

“Rail business across all sectors has increased,” he said. “It’s not just a grain story. If it were only a grain issue, the problem would be much easier to fix.”

Anne Erickson, General Director of Feed Grains, Feed Products, Oilseeds and Meals for Burlington Northern Sante Fe Railroad, said their company acknowledges the current struggles with the rail shipments and has pledged to invest $5 billion into capital investments, including adding an additional 500 locomotives to the rail line and increasing and staggering the number of sets produced to accommodate the growing grain industry.

“It’s not about putting more cars out on the railways but getting more out of the assets we already have,” she cautioned the group of industry leaders, agribusiness professionals and international buyers.

O’Neil echoed the comment.

“We need greater efficiencies,” he said. “We need to move more cars in an efficient manner and not just clog up the railroads. We don’t want to play Whack A Mole and just feed the squeaky wheel.”

Even Minnesota Assistant Commisioner of Agriculture Charlie Poster, who presented an overview of crop production and food security in Minnesota, couldn’t escape questions about the rail situation in the U.S.

“Minnesota farmers have done well over the last several years and that is because they are highly productive,” Poster said. “We are producing more and more every year, but we need that effective rail partner to get the goods to the river or to the port and to the people when they need them.”

Buyers Conference Bolsters Global Trade Relationships

International grain buyers, farmers and agribusinesses spent the better part of the 2014 U.S. Soy Global Trade Exchange Tuesday and Wednesday in Mlwaukee, Wis., sharing ideas and making connections.

According to Minnesota Research & Promotion Council Chairman Paul Simonsen, that’s the way it should be.

“The value of the conference are the people who are here,” Simonsen said. “This conference gives us access to international people who we normally wouldn’t see unless we traveled oversees.”

Roughly 600 people descended on Milwaukee to learn about the state of the soybean industry as well as other grains, with messages on transportation, sustainability and food security. For farmers like Simonsen, the experience is invaluable.

“The amount of connections and networking that is done is really important,” he said. “This conference empowers our U.S. industry leaders a chance to connect and develop new ideas to reach our industry partners oversees.”

While soybeans were largely on everyone’s minds, an early panel Tuesday also highlighted the importance of diversity in the agriculture industry, not only domestically, but abroad as well.

Teresa Babuscio, Secretary General for COCERAL, says the culture of a business plays a big role in whether women can not only advance, but be taken seriously and contribute. Babuscio encourages women to seek out those companies and to aggressively pursue those positions.”

“Remain dependent in your way of thinking,” she told the audience. “Do not hesitate to challenge and express ideas, even if they are without cause and met with resistance.”

Mariela Urguia, First Vice President, AFACA, Venezuala Feed Manufacturers Association, says women continue to be hired or promoted into prominent roles, and for good reason.

“Our long careers show the strength of the work that can be done,” she said. “We’ve been able to move up the ladder and advance because of the hardwork we’ve done.”

Newly elected U.S. Soybean Export Council chairperson Laura Foell, of Iowa wrapped the Forum with an open plea to minorities and women in agriculture.

“Women and minorities represent new a different viewpoints that we don’t have right now,” she told the audience.

The conference wraps Wednesday, but the work building relatioinshs with international partners continues as approxiametly 55 buyers from SE Asia will continue their journey with a tour of a few Wisconsin facilities before a tour of the Mississippi River at Winona, stops at a pair of Minnesota farms, and presentations at the Minnesota Soybean office in Mankato.

MN Ag Expo

Registration open for 2015 MN Ag Expo

January 28, 2015 – January 29, 2015

1 Civic Center Plaza

View MapMap and Direction

Description:

The 2015 MN Ag Expo is just around the corner. MN Ag Expo brings together Minnesota’s top corn and soybean producers, as well as researchers, ag media and agribusiness representatives for two days of educational opportunities, grassroots policy development and networking. To register or for sponsorship opportunities, visit www.mnagexpo.com.

Rail Group Hears From Ag Leaders

A standing room only crowd greeted members of the National Grain Car Council and commissioners of the Surface Transportation Board this week at a meeting in Minneapolis. Among those offering testimony were representatives of Minnesota’s soybean industry. The Council is made up of representation of executives knowledgeable in the transportation of grain including members of the nation’s rail industry, members representing grain shippers and receivers, and members representing private rail car owners and rail car manufacturers. The Council is to convene meetings at least once a year that allow the members to discuss openly the issues affecting the grain transportation industry.

 

Rail reliability to serve agriculture was among the primary topics discussed at the event at the Radisson Blu hotel in Minneapolis September 11. Among those presenting was Minnesota Department of Agriculture (MDA) Assistant Commissioner Charlie Poster, who testified about the importance of the rail industry in helping Minnesota’s agriculture industry grow to its current world-class status.

 

Poster told the Council that “in 1994, the value of all Minnesota exports was $1.42 billion. By 2012 that number had jumped to $8.2 billion, a 477% increase…The value of soybean exports rose from $346 million in 1994 to an eye-popping $2.247 billion in 2012. That is an increase of 548% over that time period. Farmers will be quick to tell you that rail was a great partner in that period of success. Our trading partners in Asia including China, Korea, Japan, Vietnam and others looked to the United States as the go to country for reliable, safe and affordable ag commodities.”

 

“Charlie did a great job of representing the changes that have occurred in agriculture over the past two decades,” says Minnesota Soybean Executive Director Tom Slunecka. “He drove home how vital the railroad industry has been to the growth of our agriculture exports.”

 

Earlier in the day Slunecka attended a meeting with representatives of the Union Pacific railroad to discuss challenges with reliability and availability heading into the fall harvest season.

Petefish Taiwan

Taiwan Soybean Meal Buyers Learn Value of Soybean Production

Daniel Goleman, a best-selling author with a Ph.D. in psychology, once said Western business people often don’t grasp the importance of establishing human relationships. When it comes to Minnesota soybean farmers and their customers abroad, nothing could be further from the truth.

Thanks to farmers such as Mike Petefish of Claremont, Minn., and Jeremy Hanson, who farms near Nerstrand, Taiwanese soybean meal buyers have a better understanding of the value of Minnesota soybeans and the dedication that goes into the production of those soybeans, all of which comes from the family farm.

Read more

Soybean Yields Focus of Chinese Buyers Visit to Martin County Farm

A group of Chinese soybean buyers now have a better awareness of U.S. soybean yields and production practices thanks to a tour of a southern Minnesota that included a stop at the Lawrence Sukalski family farm south of Fairmont.

The buyers, visiting Minnesota as part of a tour coordinated by the United States Soybean Export Council (USSEC) and in conjunction with the Minnesota Soybean Research & Promotion Council (MSR&PC), were in the state to learn more about soybean production and quality.

Read more

big iron farm show

Thousands flock to West Fargo for Big Iron Farm Show

One of the upper Midwest’s largest farm shows is underway this week, bringing farmers from Minnesota, North Dakota, Canada and elsewhere together to see what’s new and important in agriculture. The Big Iron Farm Show features more than 700 exhibitors and annually draws about 85,000 visitors to the three-day event at the Red River Valley Fairgrounds in West Fargo, N.D.

Minnesota Soybean participates in this premier event, promoting the value of the soybean checkoff and the importance of membership in the Minnesota Soybean Growers Association. Soybean farmers Kurt Krueger, Jim Kukowski, Theresia Gillie, Cecil Deschene, Kevin Amiot, Elliot Solheim, Bill and Karolyn Zurn all spent time in the Minnesota Soybean booth interacting with their fellow farmers. They joined Justin Ge of MEG Corp and Tom Verry of the National Biodiesel Board, who were on hand to promote biodiesel and answer questions about the industry.

Despite chilly temperatures, rain and gusty winds at times, strong crowds filled the buildings on the Big Iron grounds looking at everything from the newest precision planting equipment to the newest seed genetics, livestock handling equipment and more. Hundreds of farmers took part in information sessions on a range of topics including grain marketing.

farm bill

Catch up on past Farm Bill webinars and Q&As

Missed out on any of the Farm Bill webinars or the Q&As? Click here to watch past webinars, or select a Q&A session from the list below.

Updating Crop Base Acres and FSA Program Yields
Kluis/Thiesse Q&A Part One
Kluis/Thiesse Q&A Part Two

Understanding the ARC and PLC Farm Program Decision
The Q&A session from the second webinar will be added to the final webinar Sept. 11. Check back for updates.

soil tillage field day

Another Look in the Field–Total Tillage Solutions and More

I spent Thursday this week in Lac Qui Parle County with around 250 growers looking at soil, tillage and the impact our choices make on field productivity. The event was a University of Minnesota field day, sponsored in part by soybean check off along with other commodity groups and industry. 

Seeing that large of a group of farmers fully engaged in the presentations was exciting and demonstrates the kind of investment the Production Action Team is making in getting good information out to Minnesota farmers. This is the kind of field day that would be great to expand to three sites next year to better assist our growers with strong options for tillage and soil management across the state. Several important messages that I heard from the sessions throughout the day involved what you as growers can do to help improve your field productivity in the area of tillage and soil management. For example; it had rained recently and conditions were not optimum for demonstrating field tillage equipment but it was a great opportunity to demonstrate the message of waiting for the right field conditions. Tilling in field conditions that are too wet can result in large clods that will require further operations to reduce their size, as well as glazing of the soil as the equipment passes through the soil.  Glazing essentially polishes the soil and reduces water movement. Every tillage pass through a field changes the soil structure, which in turn impacts water and fertilizer movement.

Hal Weiser with North Dakota NRCS showed photographs of plant root zones where the crop had developed few roots in the shallow tillage zone precisely where most of the applied fertilizer would be found in any given year. He reported that this condition is exacerbated in dry years. Soil compaction was a second topic University of Minnesota Regional Extension Educator Jodi DeJong-Hughes covered. In some areas of the state, saturated soil conditions would lead to wheel ruts from equipment if harvest were to happen today. Jodi talked about the difference between soil compaction and the soil condition in those wheel ruts. She indicated that soil compaction is defined as the loss of air space in soil due to damage to the soil structure. Since saturated soils have those voids normally filled with air now filled with water, the rutting in the field is not soil compaction and is best remediated by freeze/thaw fracture, not by tilling through it. During the day I also spoke briefly with Dr. Abbey Wick from NDSU whose work focuses on soils and soil health.  Dr. Wick is a collaborator with Jodi DeJong-Hughes on a larger project that the Production Action Team through MSR&PC supports with a component of the funding.  

Dr. Wick is the primary investigator with the NDSU SHARE farm (http://www.smallgrains.org/2013Conf/Wick2013PGConf.pdf).  NDSU also has a web site focused on soil and soil health research (www.ndsu.edu/soilhealth)worth taking a look at when you have time. Keep this bookmarked as another resource for information on soil, tillage and soil health questions as they arise in your operation.

In a follow up on variety selection from last week, be sure to look at the kinds of resistance genetics available for any particular trait you are adding in your cultivar choices. Look for, or ask your seed sales person about the IDC tolerance ratings in lines that indicate they have it and ask for an explanation of how that ranking works as there are several methods used by individual companies. When looking for SCN resistance, be sure to ask for cultivars that allow you to rotate the SCN resistance mechanisms to slow the loss of effectiveness of a particular genetics due to over use. Look for aphid resistant cultivars that use pyramided genes when possible to provide more effective resistance as well. Finally, keep in mind that using conventional lines versus herbicide resistant cultivars may provide an economic balance in production profitability. They may also give you a weed control option in specific fields where herbicide resistant weeds are becoming problematic. The job of evaluating each field for specific needs and matching the best yield potential/trait combination package to each field is a large, but important component to raising the overall profit potential of your soybean farming operation as you start making plans for next year.

South East Asia buyers

Protein, Price and Freight on Minds of SE Asian Soybean Buyers

By Andrea Johnson 
Reprinted with permission of Minnesota Farm Guide

For international soybean buyers, August is a beautiful time of year to visit Minnesota.

Temperatures are comfortable. The soybean fields look great. Minnesota’s lakes and trees welcome guests. Farmers can also relax as they show their fields, their farm sites and their families to importers who buy every second or third row of U.S. soybeans. Giving buyers of soybean and soybean meal a look at Minnesota farms builds trust that helps the U.S. garner sales.

“Relationships are important,” said Sam Ziegler, Minnesota Soybean director of marketing programs. “We have a very high quality product, and we are building a high level of trust in our products to match it.”

Southeast Asia delegates traveled through Minnesota in late August. They visited Lance Peterson’s farm near Underwood, Jeffery and Karen Larson’s farm near Evansville, and Michael O’Leary’s farm near Danvers, as well as several ag industries.

Port of Grays Harbor AGP Terminal
Ziegler pointed out that one of the greatest marketing successes for northern soybeans began when AGP built a facility on Washington’s Pacific Coast about eight years ago. Soybean checkoff groups from Minnesota, North Dakota, South Dakota, Iowa and Nebraska joined efforts to promote the new terminal, and bring buyers from Asia to farms in the Upper Midwest.

“This partnership has allowed buyers to see Upper Midwest soybeans from planting to harvest and shipment to the Port of Grays Harbor,” he said. “This has proven that this region of the U.S. can produce some of the highest quality soybeans in the world, and maintain that quality to their warehouse in Asia.”

Here are a few thoughts from three of the delegates:

Sri Lanka
Dr. Athula Mahagamage is a partner in Global Nutrition & Management Solutions Pvt. Ltd., Sri Lanka.
He is a veterinarian, and also has his MBA in Financial Administration.

A merchandiser in facilitating trade between the U.S. and Sri Lanka, he advocates for the use of genetically modified (GM) crops.

Sri Lanka is an island country off the southeast coast of the India subcontinent of South Asia. The population is about 20 million, and a few years ago, they banned GM crops.

In his role, Dr. Mahagamage has worked to explain that the GM soybeans hold no health threat. He’s also worked to increase soybean meal sales from the U.S. to Sri Lanka.

In 2012, his country imported 9,014 metric tons (20 million pounds) of soybean meal; and in 2013, the number was 41,065 metric tons (90.5 million pounds). So far in 2014, Sri Lanka has imported 32,539 metric tons (72 million pounds) of soybean meal, according to the USDA Foreign Ag Service.
Dr. Mahagamage said he can easily see the high quality of U.S. soybeans, but his biggest challenge has been related to freight and container-availability issues.

Thailand
Mr. Somphob Auesongtham is the supply chain and global sourcing manager for Inteqc Feed Co., Ltd. of Thailand.

The company’s main business is to manufacture and market animal feed additives. They specialize in shrimp, fish and swine feed, and are the second largest fish feed manufacturer in Thailand.

With a population of 64.5 million people, Thailand is located west of Vietnam.

Thailand purchased 360,000 metric tons (13 million bushels) of soybeans in 2012, 568,000 metric tons (20.1 million bushels) in 2013, and 426,600 metric tons (15.76 million bushels) in 2014.

They purchased 10,000 metric tons (22 million pounds) of meal in 2012, 15,000 metric tons (33 million pounds) in 2013, and so far have purchased 368,400 metric tons (812 million pounds) of soybean meal in 2014.

Auesongtham worked with a group of 20 companies to ship several Panamax ships filled with soybean meal to Thailand this year. He added that Thailand feed companies generally need either high protein soybean products that cost more to purchase, or they want low protein products that are inexpensive.
His biggest question in August was asking why soybean meal prices remained high when soybean prices had dropped significantly.

Vietnam
Ms. Tran Ngoc Thuy (Tina) is a purchasing manager in Vietnam for De Heus, a privately owned business with global operations.

One of the top 15 suppliers of animal feed in the world, De Heus operates in more than 50 countries outside of its headquarters in the Netherlands, and has more than 3,000 employees. The feed manufacturers are building their fifth and sixth factories in Vietnam to provide high quality feed for pigs, poultry and cattle for the country’s 89 million people.

“The farms are very big in the U.S., if you compare with Vietnam where there are smaller farms,” she added. “You hear reports there are big farms, but you come here and you see it with your own eyes.
“The machinery is very modern, and you can’t find that in Vietnam.”

De Heus also has operations in Brazil, and the company will buy soybeans from whatever country has the best product to meet their needs at the best price. They are primarily interested in protein levels, Tina added.

Vietnam purchased 297,000 metric tons (10.9 million bushels) of soybeans in 2012, 608,000 metric tons (22.3 million bushels) in 2013, and 516,000 metric tons (19 million bushels) in 2014. They purchased 58,000 metric tons (128 million pounds) of soybean meal in 2012, 268,500 metric tons (592 million pounds) in 2013, and 316,000 metric tons (696.6 million pounds) in 2014.

Tina encourages U.S. farmers to keep doing a great job of producing high quality soybeans, and she also wants everyone to visit Vietnam. The best months to travel there are April, May and October, although travel in Southern Vietnam is still good from November to February – the same time as U.S. soybean farmers can take time away from their farms.

When you think of all of the steps that it takes to raise soybeans here for livestock feed in Southeast Asia, it’s really amazing that it gets done.

Success has occurred because of good relationships built between countries.

“Today, the AGP terminal at the Port of Grays Harbor is one of the greatest marketing successes for soybeans,” said Ziegler. “Vietnam, Thailand, Sri Lanka and many other countries in Southeast Asia are huge customers, and will continue to be for many years to come, thanks to farmers showing their crops – and this great partnership with AGP.”