Iowa benefits from ag deals with China


WASHINGTON - Bill Northey, Iowa's secretary of agriculture, said Vice-President Xi Jinping's visit to the state later this week will likely secure deals with China on the export of soybean, pork and corn.

"The benefit of trade with China is huge for us," Northey said. "I am looking forward to building better connections and have longer conversations about what we can do to build more business relationships between Iowa and China."

On Wednesday, Xi will attend a reception and a dinner at the Iowa Capitol in Des Moines. He will be attending a symposium on agriculture followed by a visit to a farm on Thursday.

"Soybean is the biggest crop because China is the largest buyer in the world, and that demand has grown in the last 15 years," Northey said.

China began to import soybeans in 1996 and the country was bringing in 54.8 million tons of soybeans a year by 2010, making it the largest importer of the crop in the world. China surpassed Canada to become the largest importer of US agricultural goods in 2011, according to the US Department of Agriculture.

Soybeans are a major part of the Chinese daily diet. It is also used widely in China to produce cooking oil and to feed livestock.

"Iowa is in the Northwest and the Northwest has become a stronger region right now in economic growth in part due to China," Northey said.

Iowa also has 20 million hogs and experienced a successful year in its pork trade with China in 2008.

In US pork exports to China, Iowa was the first producer and No 1 exporter, Northey said.

Northey said trade with China is not only boosting Iowa's economy but also creating more job opportunities.

"Our unemployment rate is about 2 percent less than the rest of the country as a whole," he said.

There are 90,000 farmers in Iowa, who produce about 20 percent of the soybean products in the country.

Cotton in Iowa, he said, has seen record prices from just a year ago because not only is China buying but also because cotton production has gone down after farmers switched to growing soybeans.

"People in Iowa are not only planting and selling crops, but they sell the seeds that help crops, so we have companies like Pioneer and Monsanto and other seed companies expanding because they see that people would like to pay good prices for good seeds," he said.

Northey said Iowa is also looking to expand its manufacturing capacity, citing the success of a tractor tire plant.

"(The plant) has added a $100 million in investments and a hundred employees in the last year because of agricultural demand," he said.

According to the US Department of Agriculture, agricultural imports supported more than a million jobs in the US and the value of US agricultural exports is expected to reach a new record of $137 billion by the end of 2012.

The total revenue from farmers in Iowa reached $12 billion in 2002 and has since doubled in 2010, said Northey, who projects that 2011 figures could reach $30 billion.

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