DES MOINES — Iowa farmers got a double dose of good news Monday with the announcements that Taiwan intends to purchase up to 144 million bushels of U.S. soybeans over the next year with an estimated value of $1.56 billion and the Trump administration has reached a tentative trilateral trade deal with Canada and Mexico.
“Today’s announcement by our Taiwanese trading partners to increase purchases of U.S. soybeans is welcomed news,” said Iowa Soybean Association President-elect Tim Bardole, a Greene County farmer who grows soybeans near Rippey and was on hand for a signing ceremony with Taiwanese officials and Iowa acting Lt. Gov. Adam Gregg.
“As an Iowa soybean farmer, I can say firsthand that we need some good news,” added Bardole. “Soybean harvest is underway in Iowa and across the nation. This year is expected to be a record yield. We’re good at growing soybeans. Iowa and U.S. farmers are also committed to ensuring that we’re a reliable supplier and that our soybeans are of the highest quality. Taiwan knows this, evident by their intention to increase imports of U.S. soybeans by 37 percent compared to last year.”
With the new agreement, Taiwanese officials indicated that 90 percent of the soybeans they purchase will be grown in the United States. Yau-Kuen Hung, chairman of the Taiwan Vegetable Oil Manufacturers, called Monday’s development “a milestone” in the relationship between his nation and Iowa.
“Of course I would like to thank the state of Iowa and the Iowa Soybean Association for their support,” he told the Statehouse gathering.
In a deal that was formalized last Thursday in Washington, Taiwan plans to purchase between 118 and 144 million bushels of U.S. soybeans over the next year.
“Hopefully, we’ll just keep the positive optimism coming in and it hopefully will start providing some certainty to the markets, especially when it comes to agriculture.” Gov. Kim Reynolds said in an interview.
According to the Iowa Economic Development Authority, Taiwan is the sixth largest export market for U.S. soybeans, valued at $586 million in 2017, and the Asian nation ranks as Iowa’s 13th largest trading partner with exports estimated at $170 million in manufactured and value-added goods in 2017. In the first half of 2018, Iowa exports to Taiwan have increased 46 percent when compared with the previous year, officials said.
Eric Huang, director general of the Taipei Economic and Cultural Office, said his country’s relationship with Iowa is “very close” and the Taiwanese have “trust and high confidence” in the quality of Iowa products.
Ernie Goss, a Creighton University professor who puts together the Mid-America economic index, noted the U.S. stock market reacted favorably to news of the tentative U.S. agreement with Mexico and Canada and he expected the soybean deal with Taiwan will work in tandem to help commodity prices increase in the short term and stabilize.
Iowa Agriculture Secretary Mike Naig, who spoke at Monday’s signing ceremony, told reporters afterward that “every bit helps.”
“This agreement is a significant increase. It gives us something like 90 percent market share in Taiwan now,” he said. “Does it replace a China in its entirety? No, but every bit helps to restore that certainty to the market that we desperately need.”