Some international buyers prefer US soy to that from top competitors Brazil and Argentina because they can count on it reaching them in a timely manner, according to a new soy-checkoff-funded study.
In fact, foreign soy buyers often pay as much attention to the timeliness of a shipment delivery as they do to the price. That's because late shipments can be expensive for buyers, as they incur costs in trying to find replacement crop, slowing down crush facilities and other problems that arise when shipments don't arrive in the time frame that was promised.
"Our industry depends on the reliability of our transportation system to keep us competitive in the global market," says Dwain Ford, soy farmer from Kinmundy, Illinois, and United Soybean Board (USB) International Opportunities Target Area coordinator.
"This study really shows the advantage the roads, rails and rivers give us and how important it is to maintain and improve our infrastructure."
Conducted in partnership with the checkoff-supported Soy Transportation Coalition, the study gathered input from buyers in China, Taiwan, Thailand and Vietnam to get first-hand reports on the timeliness of shipments and the repercussions late shipments have on their businesses. In most of these markets, US shipments were the most predictable, with several participants adding that they prefer to buy from the United States because of this predictability.
Argentina has the advantage when it comes to shipping costs because of its relatively short distances from the growing areas to major ports for export. But US soy rises to the top because of the relatively short amount of time it takes for soybeans to move from the growing areas to export position, which greatly impacts the United States' edge in delivery predictability.
Even though US soy has the longest distances to travel, the extensive US rail and river infrastructures move these beans quickly, and the port infrastructure allows for timely loading and limited delays. Both Brazil and Argentina have significantly less rail and underdeveloped inland waterway systems, so roads are the main mode used to move products from growing areas to export position.
"It's great to see the infrastructure here in the United States is still doing its job," adds Ford. "But if our competitors continue to update their infrastructure and we don't, we could easily fall behind. It's vital to US soybean farmers and the US soy industry that we protect this advantage."
The 70 farmer-directors of USB oversee the investments of the soy checkoff to maximise profit opportunities for all US soy farmers. These volunteers invest and leverage checkoff funds to increase the value of US soymeal and oil, to ensure US soy farmers and their customers have the freedom and infrastructure to operate, and to meet the needs of US soy's customers.
As stipulated in the federal Soybean Promotion, Research and Consumer Information Act, the USDA Agricultural Marketing Service has oversight responsibilities for USB and the soy checkoff.