The first ever all-Iowa agriculture trade mission, set for July, will 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 to customers there, Iowa Gov. Kim Reynolds and farm leaders said last week.
"There is no better time than now to market and pitch our products in China," Reynolds said during her first weekly press conference after taking office in late May. "Our relationship with the country is strong, and their growing middle class means increased purchasing power, and Iowa stands to gain as a result. We need to cultivate and maximize our relationship."
Reynolds will lead the 10-day trade mission set to begin July 19. She will be accompanied by representatives of the state’s major agriculture groups to help build Chinese demand for a wide range of Iowa products, including soybeans, corn, pork, beef, turkey, dairy and eggs.
It’s the first time that all of Iowa’s major farm organizations have come together on a trade mission, Reynolds said.
The Iowa Farm Bureau Federation (IFBF) will be represented by Craig Hill, IFBF president, and Joe Heinrich, IFBF vice president.
A vital market
Hill said it makes sense for Reynold’s first trade mission to travel to China. "China is really a vital market for all of Iowa’s commodities," he said following Reynolds’ press conference. "As income levels and the demand for protein increases in China, Iowa is really in a perfect place to supply that growth."
In addition, Reynolds and ag leaders said the mission is well timed because it will likely occur just after former Iowa Gov. Terry Branstad takes up residence as the new U.S. ambassador to China.
"This will help us support Ambassador Branstad’s work to increase U.S. exports of agricultural goods and all U.S. goods to China," Hill said.
During the mission, the Iowans will travel in and around Shanghai, Xian and Beijing. They will meet with Chinese government officials, buyers and others.
"Personal relationships and friendships are very significant in the Chinese culture and we want to build on that," Reynolds said.
Iowa, Reynolds noted, already has a special relationship with China because President Xi Jinping spent time in the state during the 1980s as a young agricultural official. Xi and Branstad have built a strong friendship over the years, she said.
China, with its huge population and growing middle class, has emerged over the past decade as a key factor in the health of the farm economy in Iowa and the entire United States, according a new analysis by Iowa-based Decision Innovation Solutions (DIS).
China was the largest buyer of U.S. ag products in 2016, outpacing traditional leaders Canada, Mexico and Japan. At a total value of $21.4 billion, China’s purchases were up 5.7 percent from 2015 and were slightly higher than the $20.5 billion in sales to Canada. In all, China last year accounted for 15.8 percent of the value of all U.S. ag exports last year.
What’s remarkable, the DIS report showed, is how quickly sales to China have grown. A little more than a decade ago, China’s purchases of U.S. ag products amounted to only about $5 billion. But around 2007, sales to China caught fire and rose to more than $25 million in value in 2012 and 2013, before falling back a bit as commodity prices cooled.
China’s food demand includes many of Iowa’s primary products. China buys one in every four rows of soybeans grown in Iowa each year and a growing amount of pork, Reynolds noted.
Still, as Reynolds acknowledged last week, the United States has ongoing trade conflicts with China that have restricted trade. Trade missions, she noted, can help ease those conflicts.
One trade conflict, China’s 13-year ban on imports of U.S. beef, does appear to be coming to an end.
China, which banned U.S. beef after a single BSE incident in late 2003, is expected to begin importing U.S. beef by this summer.
"We are cautiously optimistic about increased exports to China. The deal seems to be moving along well," Matt Deppe, CEO of the Iowa Cattlemen’s Association, said during the press conference.
China has already become the world’s second-largest export market for beef, and beef demand is expected to continue to grow as the country’s wealth expands, he said.