It’s not only about what you know, but about who you know.
Luckily, Northern Soy Marketing (NSM) has both – relationships and knowledge.
An NSM delegation visited Indonesia Feb. 17-21 to continue building relationships and spreading the global knowledge of soy quality.
“It was good,” NSM Chair Glen Groth said. “I feel like we’re making progress there.”
A collaboration of farmer leaders from Minnesota, South Dakota and Wisconsin, NSM promotes the quality, consistency and reliability of northern-grown soybeans and soymeal by working with respected researchers to provide a more accurate picture of soybean quality. An important component of NSM’s work is highlighting the advantages of considering critical essential amino acids, rather than crude protein, as the true measure of soy quality during trade missions to key markets.
“This trade mission was important because we are trying to move U.S. soybeans and soymeal into that area,” said David Struck, NSM vice chair. “That’s our number one thing – to try and break into that market.”
With the largest population and economy in Southeast Asia, Indonesia’s animal feed production is projected to grow three percent annually, which will increase the use of soymeal 47 percent by 2035 and 40 percent by 2040. In Southeast Asia as a whole, animal protein consumption is projected to achieve a compounded annual growth rate of 20 percent in the next five years; to meet demand, the region needs to increase its purchase of soybeans and soymeal exponentially.
“Indonesia is the largest soymeal market in the world,” Groth said. “We need to understand their needs and understand their challenges and come up with ways we can meet those challenges and needs. The market size of Indonesia cannot be ignored.”
Along with Groth and Struck, South Dakota farmer and NSM Director Mike McCranie attended the trade mission. Seth Naeve, a University of Minnesota soybean researcher, poultry nutritionist Bob Swick and Alvaro Cordero, a senior export trader with AGP, also joined the trade mission.
“We’re working to build relationships over there and ultimately sell them product that will benefit both their livestock businesses and northern U.S. farm families,” Groth said.
While in-country, the U.S. Soybean Export Council (USSEC) provided essential support.
“The USSEC staff was invaluable to what we accomplished in Indonesia,” Groth said. “Having them in our corner is a great asset to the American soybean farmer.”
While many of the experts the NSM delegation met with understood and recognized the superior quality of U.S. soybeans, price remained a consistent deterrent.
“They’re very price conscious but we explained to them that U.S. soymeal is going to get very competitive here in the next year or two,” Struck said. “Everywhere we went, the number one deal was that we are too expensive right now. It’s their main concern.”
Though northern-grown soybeans are more expensive than Brazil or Argentina soy, hope is on the horizon that the price gap will narrow.
“We’re crushing soybeans for oil now instead of meal,” Struck said. “Supply is going up, so naturally that is going to bring the price down and the basis is changing. Within the next year or so, we are going to be price competitive with Argentina, and we have higher quality meal than what comes out of Argentina.”
Not every face in Indonesia was a stranger’s face – there were plenty of familiar faces, too, especially for Groth, who hosted several of the same people they had meetings with in Indonesia on his Ridgeway, Minn., farm during the 2024 NSM Crop Tour.
“It was pretty cool to see them on their own turf and learn about their businesses to be able to better understand their livestock and milling operations,” Groth said. “It’s great to reconnect, build and maintain those relationships. International business is built on those relationships, and it’s great to be part of that process.”
