Asian delegation checks soybean cropBRANDON, S.D. — With both hands holding it open, Fadjar Setiawan plunged a small, clear plastic bag into the cascade of soybeans flowing from a truck unloading at the Eastern Farmers Cooperative in Brandon.
By: Peter Harriman, The Associated Press
BRANDON, S.D. — With both hands holding it open, Fadjar Setiawan plunged a small, clear plastic bag into the cascade of soybeans flowing from a truck unloading at the Eastern Farmers Cooperative in Brandon.
With a pen, he labeled the sample. Before sealing it, he extracted a few beans. On one bean, he pointed to the hilum, the eye that attaches a bean to the pod. In this case, it was pale yellow, almost white.
“This is what we like to see,” he said. He bit down tentatively on another bean.
“About 10 percent, 9.5,” he reported of the moisture content.
Setiawan, the Indonesian agent for Ag Processing Inc., was among a delegation of soybean buyers from China and Indonesia who visited South Dakota on Wednesday as part of a tour that included the Port of Grays Harbor in Washington, from which soybeans are shipped to Asia, and farms and elevators in South Dakota, Nebraska, Iowa, Minnesota and North Dakota. The South Dakota portion of the trip was organized by AGP and the South Dakota Soybean Research and Promotion Council.
Collectively, the tour members account for roughly 20 million metric tons of soybean purchases annually, according to Pete Lombardo, head agent of AGP’s China division. To the degree most people even think of grain trading, it is an abstract, arcane enterprise best expressed in numbers and decimal points and in obscure crop reports.
However, at the elevator in Brandon and at farms in South Dakota and Minnesota on Wednesday, the tour members who buy immense quantities of soybeans made it personal.
“A contract in Asia is really the beginning of a relationship,” said Peter Mishek, head of Mishek Associates, an Omaha international trade firm participating in the tour.
“Legalities don’t matter that much. A person’s word over there is
“For Asians, relationships are really important,” Lombardo said. “The more contact, the more trust. The more education, the more trust.”
So the tour participants were eager to see for themselves the effect of widespread drought on the U.S. crop.
From officials such as Kent Mulder, grain department manager for Eastern Farmers Co-op, and Stan Hanson, a South Dakota Soybean Research and Promotion Council director who farms near Garretson, the tour participants learned much of the South Dakota soybean crop does not appear to have been devastated by the drought, Mulder said.
From farmers such as Kevin Scott, the trade tour received reassurances South Dakota soybean producers intend to be reliable suppliers to the Asian export market. Scott stood in the stubble of a newly harvested corn field near Valley Springs as a combine swept across a nearby soybean field. Tour participants took turns riding in the combine and in a tractor pulling a grain cart.
As the harvest went on around him, Scott talked frankly to tour members about soybean yields that were variable but in some fields “almost the same as last year for us.” He hopes to have 40 percent of a crop sold before harvest but has the storage capacity to hold an entire crop, if necessary. New soybean varieties are increasing yields, Scott said, and the potential for continued drought wasn’t scaring him from planting next year.
“I don’t plant for what I think the moisture ought to be. I plant for the optimum crop,” he said.
Scott has the same high regard for relationships as the soybean buyers, and having the tour come to his farm was valuable.
“These guys buy much of our soybeans. It’s always good to connect with customers,” Scott said.
With soybeans selling near $17 a bushel amid fears a short crop because of the drought could drive the price to $20, the soybean buyers were vitally interested in reports South Dakota farmers north of Interstate 90 expect to harvest at least two-thirds of a normal crop.
“The issue with Indonesia is purchasing power,” said Wayan Sumantra, associate director of Setyacipta Ekatama, a soybean processor in Jakarta. Soybean products such as tempeh and tofu are crucial protein sources for the Indonesian population, he said.
At the co-op in Brandon, South Dakota Soybean Research and Promotion Council director Hanson glanced quickly at a cheat sheet. In 2010, South Dakota soybean exports were worth $1.1 billion, he said. Sixty percent of the crop is typically exported, the majority to China.
“This is huge for South Dakota farmers,” he said.
Exactly, Mishek agreed. He looked about the scene in Scott’s field, a handful of tour participants grouped around the farmer, others watching the combine at work or riding in it. First-hand impressions of the 2012 South Dakota crop were being gathered. Relationships were being formed.
“This is too important to be left to some grain company,” Mishek said.