Ask any brand about the importance of marketing, and they’ll promptly reply that understanding the needs and wants of the customer is the first and most essential step to making a sale.
That surely holds true for soybeans.
Despite a recent thawing of trade friction with China, U.S. soybean exports to the world’s top buyer continue to languish. Increasing America’s share of soybean exports to developing countries, therefore, is mandatory.
I recently joined several soybean farmers – including the president and president-elect of the Iowa Soybean Association – for a U.S. soy trade mission to Bangladesh and Pakistan. The conversations with key soybean buyers, feed mill operators, association leaders and trade representatives will foster relationships and build brand identity. The result, we hope, is better pricing opportunities for U.S. soybean farmers in the near-term and a deepening preference for U.S. soy among more buyers long-term.
It takes time and effort to travel to places like Dhaka, Bangladesh and Karachi, Lahore and Islamabad, Pakistan. But earning trust and developing long-term relationships don’t happen with phone calls, e-mails and text messages. Meeting face-to-face is how you build loyalty. We may be buying and selling soybeans, but never forget that every transaction begins with knowing and valuing the people involved and connecting with them on a personal level.
Bangladesh and Pakistan, with a combined population of nearly 400 million (75 million more than the United States), are strategic locations to market soybeans. The political and social environments of both developing countries are stabilizing. The hard-working and friendly people of both countries are slowly ascending the economic ladder. More purchasing power results in greater consumption of protein, including poultry, fish, dairy and beef.
And soybeans, particularly those grown in the U.S., are an important feed ingredient for chickens, layers, tilapia, butter catfish, shrimp and cattle.
Connecting these dots and identifying emerging markets that have potential for increased soybean consumption has never been more important. Trade disruption with China has hit U.S. farmers hard. The market price of a bushel of soybeans has declined nearly $2.50 since April 2018. The soybean farmers I serve are struggling. Assistance from the federal government has restored some of the lost income due to the trade war. But the economic pain remains real and widespread across most sectors of American agriculture. Rural communities sustained largely by crop and livestock production have also been hard hit.
That said, the unresolved trade dispute between the world’s two largest economies has pushed U.S. soybeans onto the world market in an unprecedented way. One panamax vessel of soybeans is not enough to change mindsets, but after a few months and then years of sales, you’ve established your brand. To make that happen, building strong ties between the grower, buyer and user is a must.
Take Pakistan, for example. The country imports nearly 2.4 million metric tons (mmt) of soybeans, or around 80-90 million bushels. A conservative estimate pegs that total to increase by 38 million bushels within next 3-4 years. With some changes in government policy (eliminating a 14% duty on soybean meal, for example), Pakistanis we visited with during our trade mission believe soybean imports could double from their current level.
I’ve participated in more than 40 trade missions during my time as CEO of the ISA. Each one is unique and offers key takeaways that influence how ISA approaches its market development activities.
My visits to Bangaldesh and Pakistan make me truly optimistic about the market potential for U.S. soy. Key drivers are the country’s growing metropolitan areas, rapid adoption of technology, a focus by feed nutritionists on sourcing quality ingredients and prospects for increased protein consumption. Also boding well for U.S. farmers is a deep appreciation by the buyers we met with in the personal exchange of ideas and arriving at mutually beneficial outcomes in every business dealing.
While U.S. soy’s brand is strong in South Asia, now is not the time to coast. We must grow and deliver a consistent product high in nutritional quality. And we must make time to travel half a world away to shake the hands of our customers, discuss their needs and concerns and enjoy dinner together where we can share pictures and stories of families, hobbies and interests.
While we can’t control government actions and inactions, weather, market volatility or the value of the U.S. dollar, we can directly influence relationships with others. Behind every good brand are people who care about people. ISA is driven to deliver because we understand and relish this fundamental principle of doing business, including with our new friends in Bangladesh and Pakistan.