Hill: Tremendous opportunity for Iowa as China transforms
Iowa’s first all-agriculture trade mission to China, led by Iowa Gov. Kim Reynolds, recently returned to the state. The 10-day mission was designed to build on the state’s strong and expanding relationship with China and work to boost sales of Iowa-raised crops, meats and other ag products. Craig Hill, Iowa Farm Bureau Federation (IFBF) president, and Joe Heinrich, IFBF vice president, were part of the trade mission.
As part of our periodic conversations with President Hill, the Spokesman visited with him last week about prospects for further growth in exports to China.
Q: China is already a top buyer of agricultural goods raised in Iowa, including soybeans and pork. In your visit, did you see the potential for continued growth?
Yes. China is seeking economic improvements in every possible way. Their economy is transforming with more people moving into the middle class who are demanding a better diet. China’s middle class will soon grow by some 300 million people, or nearly the population of the entire United States. At the same time, the government is committed to bringing millions of people out of poverty, another 600 million plus. Those two factors mean that China’s demand for food, and especially higher quality protein, will continue to grow.
Q: Is Iowa, and the United States, well-positioned to satisfy that increased food demand from China?
I believe we are. Despite all of the concern and rhetoric that we had during the election about trade, we’ve really seen some improvement in agricultural trade. Likewise, we were fearful that we would lose ground on trade with China, but we’ve gained some ground there, too. There is still concern that trade friction with China in other industries, such as steel, causes problems for agriculture. But to date, we have not seen that happen.
Q: Are there certain Iowa ag products that still have a lot of potential for export growth in China?
Of course, China is the world’s largest importer of soybeans. But I think there is a lot of potential for increased trade in corn. China has significantly reduced its subsidies on corn, and that should bring down the amount of area planted to corn. I think there is a long-term potential for more corn sales.
In the shorter term, China’s immediate need is for more protein, especially more pork, beef and other meats. And a lot of that will need to be imported. The average American consumes about 187 pounds of protein a year, while in China it’s only 130 pounds of protein. You don’t have to be much of a mathematician to take 50 pounds times 300 million in China’s middle class to see that it’s going to take a whole lot of protein to close that gap.
Q: While exports have remained strong, the United States continues to have ag trade issues with China, such as the approval process of biotech traits. Did you detect any movement on those issues in your meetings with Chinese officials?
Certainly, actions speak louder than words, but I think we have made a lot of progress in these trade issues. China recently approved four of the eight biotech traits that were in the pipeline, and they have opened the market to U.S. beef, rice and other products. The 100-day plan that was developed by President Donald Trump and Chinese President Xi Jinping has been very helpful.
In addition, it’s a real advantage to have former Iowa Gov. Terry Branstad as ambassador to China. He understands the importance of agricultural issues to Iowa and to the entire United States and will help us work though agricultural issues.
Q: You’ve noted in earlier conversations that Chinese citizens and officials are becoming more concerned about environmental issues and are changing agriculture to be more sustainable. Did those issues come up in your most recent visit?
We really saw there is an increasing focus in China, both citizens and government officials, on improving the country’s environment. Many of the farming practices in the past that were hard on the environment are no longer acceptable. They are changing their livestock production systems to be more environmentally sound. There is also a push to retain land for agriculture to keep it from being developed for non-farm uses.
China will never be able to produce the volume of food that their population needs. But it appears they are determined to produce food using more environmentally sound methods. That’s been a real transformation for the country.
Beyond citizens’ demands to clean up the environment is the demand for reliable, predictable and quality food products. That makes the Iowa-China connection one of mutual benefit.
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