In a crowded global market amid increasingly fierce competition from countries like Brazil, U.S. exporters are standing out from the field with a superior quality product, exporters said, even as competitors often outcompete on price.
Participants in a panel hosted by the American Soybean Association’s World Initiative for Soy in Human Health during the Commodity Classic in Denver this week pointed to Brazil’s extraordinary ability to expand acreage.
“It's almost unlimited,” said Lance Rezac, chairman of the United Soybean Board, who also sits on the U.S. Soybean Export Council board. Brazil could add as much as 70 million acres of pastureland to crop production without deforestation, according to some estimates – and far more if they continue clearing land.
Brazilian producers can also double crop, getting two harvests annually.
“They'll feed the world, and someday the world will need it,” Rezac said, “but we need to make sure that right now we keep that in check.”
But Rezac and others argue that U.S. exporters can compete with their superior quality product.
Brazil’s soybeans have more moisture due to the tropical environment, he said. Brazilian producers dry the beans with wood, but this affects their digestibility, Rezac said. Buyers in places such as Turkey and Egypt are beginning to sour on South American soy for this reason, which creates market openings for U.S. producers, he alleged.
“We're going to be higher priced,” Rezac said, but argued that is okay. “We don't want to be in the same ball game as Brazil.”
Rezac added that the European Union’s forthcoming deforestation rules could advantage U.S. producers in the European market. The law, which requires some products to be free from deforestation, was supposed to be effective at the end of last year but was postponed a year.
“We look at our carbon scores,” Rezac noted. “That's really going to set us apart, again.”
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Similarly, panelists said that U.S. meat exports are also competing in crowded markets by focusing on high-quality cuts and products.
Scott Gaffner, a board member of both WISHH and the USA Poultry and Egg Export Council, described how the council had worked with Japanese chefs to build demand for U.S. poultry.
“Educating everybody we come in contact with about that creates that demand,” Gaffner said.
Sometimes creating demand requires consumer spending shifts. U.S. poultry is eying India as a potential expansion market and vying to increase chicken and turkey consumption. Gaffner said that using social media influencers to increase consumption of chicken and turkey products during weddings is one way the industry is looking at increasing its footprint in the country.
Global demographic shifts, however, mean that some markets that the U.S. has prioritized in the past – through trade agreements, trade missions and deepening trade ties and buyer-seller relationships – may not be the growth of the future. China, Japan and South Korea, for example, may have already seen their populations peak, according to recent analysis from Terrain.
Building demand for U.S. product in key growth markets for the future like Southeast Asia and sub-Saharan Africa, where countries may not have a trade deal with the U.S., takes time, the panelists argued, but work is already underway and in the early stages of market-building.
The panelists highlighted efforts in countries like Nigeria and Ghana. They touted an approach that finds or establishes a local voice that understands the quality of U.S. products and can champion it from inside the country.
“That's how we engage,” said Megan Kaiser, former chair of the United Soybean Board. “Having that local voice see the difference and then letting them kind of go to work on their own side.”
It’s slow work, said John Hinners, senior vice president of industry relations at the U.S. Meat Export Federation. But he added that meat exporters are already engaging in Africa, where more than a quarter of the globe’s population is expected to live by 2050.
Similarly, Rezac said Nigeria has begun buying small amounts of soybeans. USSEC has also been working with partners in east Africa to promote genetically modified crops, which could eventually unlock new markets such as Kenya.
“We work with these kind of companies and associations in all these different countries to help work your way up and get your way in that way,” Rezac said.
