Keeping Chinese Customers Happy

Keeping Chinese Customers Happy

Our Far East tour wraps as another load of U.S. soy reaches its destination: A Chinese crushing plant

Yesterday our tour of China wrapped up, appropriately, with a stop at Donling Grain and Oil Co., a major Chinese soy crushing facility. The managers of the plant brought us down to the river front where we watched high-tech equipment methodically unloading a barge full of U.S. soybeans – ready to be made into livestock feed and cooking oil for Chinese customers.

Dan Duval, who farms near Peoria, Ill., was watching along with the other American farmers in our group. "I felt some ownership of those soybeans, and was hoping they were good quality," says Duval, who grows corn and soybean seed for a major seed company.

Dumping American soybeans at the Dongling Grain and Oil Co., Guangzhou, China.

We got a nice feeling when Deng Hui, logistics manager, told us they liked the American soybeans coming out of the Gulf of Mexico, for their color and protein.

"We want to provide a good quality product to our customers," says Duval. "We want the customer to be happy."

Customer. It's easy to forget where your grain goes once you drop it at the grain elevator or river terminal. But in fact, all week we've been focusing on exactly what China may want from us as a business partner going forward. This was a perfect way to conclude our journey.

It began in Beijing with a market study presentation on future soybean export projections. We found our way into small crevices of this vast and beautiful country to meet smallholder farmers, owners of privately-held farm businesses, and others positively impacted by China's burgeoning market economy. We met newly-minted capitalists who are boosting Chinese agricultural efficiency with investment, education and innovation.

Managers told us American soy from the Gulf of Mexico (New Orleans) had better protein and color.

We also learned about their challenges, and there are many. So many, in fact, that it appears China's goal of food self sufficiency will remain aspirational for quite some time, despite the bravado coming from last week's 18th National Congress of the Communist Party.

For us, it comes down to listening to what China needs as a customer. I recall a conversation with another Illinois farmer three years ago as we were leaving here after a similar week-long market study. The experience had sparked some new thinking.

Our group posed for a photo at the crushing plant. You'll learn more about them in my next blog.

“As farmers we’re more concerned about producing products that are easy and cost-effective for ourselves,” he told me as we sat in the Hong Kong airport lounge. “Instead, we should be concerning ourselves with what our customers need. I don’t think about this when I’m hauling beans to the river. But when I come here and see a guy at one of these crushing plants grab a handful of imported beans and they’re full of foreign material, I have to think, those could be my beans. What if he can get cleaner beans from Brazil? Our customers have choices. I’m going to think about that at harvest.”

And that is the value of trips like this. Sure, it's a long way from home and there's a ton of work piling up while you're gone. But thousands of American farmers have made these trips, and thousands have been profoundly impacted by the experience. You can't fully appreciate globalization until you get out there and see it for yourself. That will require some time, money, and a passport.

This will be my last report from China, but I'll have a wrap-up blog in a few days to let you know what the folks on our tour thought about this experience. Rest assured you will see more on this important customer for U.S. farm products here and in Farm Futures. This is one market that every American farmer needs to understand.

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