"China will be the last to fail•bCrLf

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The above comment came from one of our Chinese hosts this morning after a brief discussion on the global economic situation. And after spending a week now in China, most of the American farmers I'm here with would agree: if there is one country well positioned to pull the world out of recession, it has to be China. But I'm getting ahead of myself.

I've spent a week now with a group of U.S. farmers, learning about this country's incredible market potential. The tour, organized by the Illinois Farm Bureau, includes 17 farmers and two guests from the Ohio Farm Bureau. We've seen so much in just a few days, and now everyone is trying to wrap their heads around what we're soaking up.

This morning we met with Wiley Wang (left), South China Commercial manager for Cargill here in GuangdongProvince. Guangdong is in South China, a region that produces half of all of China's exports. It's also the biggest feed production center in China. Overall China has 150,000 feed mills!

Cargill opened its doors here in the mid 70s shortly after Richard Nixon made his now famous visit to China to begin relations between our two countries. The company now has over 30 businesses in China, from processing plants to feed mills to its share of Mosaic, a joint fertilizer venture it set up with IMC Global in 2004. Cargill now owns the Purina brand outside of the United States, so there's a lot of animal nutrition activity here as well.

Wang told us the company favors soybeans out of the Gulf for their color and protein. Soy meal customers here come in all sizes — from large feed companies to smaller retailers. They are sensitive to appearance, color, granulation and odor. "We have a lot more small customers who are sensitive and focus on tradition and habit,•bCrLf he says. "That's one reason we don't like the Brazilian bean as much. Its color is not as nice, even though it has a slightly higher protein level.•bCrLf

The good news out of our meeting this morning with Cargill is that there's more growth ahead for China-bound soybeans. Wang believes people are still adding protein to their diets as incomes improve, despite the economic slowdown. More important perhaps, is that there are many regions of China that are still undeveloped. He believes the ingredients for success — a rising middle class and cheap labor — will add up to more livestock operations in areas where livestock does not yet exist.

Left: Illinois farmer Alan Acheson inspects bagged soybean meal at the Cargill plant at Guangdong Province, China

The bad news is that Wang is the latest Chinese authority on this trip to tell us he doesn't see much short-term importing of corn to China. At least, not in the next three years. "In fact, China may begin exporting corn in that time,•bCrLf he adds.

And yes, Wang does believe his country's economic stimulus package - announced last week with a price tag of $600 billion - will work. "China will be the last to fail,•bCrLf he says. "That's because we still have cheap labor and a well-set out industrial system. And we have a long way to go in terms of developing middle or inland China.

"This is the economic engine that will bring China out of recession.•bCrLf

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