WORTHINGTON — A dozen individuals who work in poultry breeding and production in Indonesia were in Worthington Thursday afternoon as part of a multi-state tour to see how U.S. poultry is produced and to meet with local farmers growing high-quality soybeans that can meet Indonesia’s demands.
Indonesia currently buys 2 million tons of whole soybeans from the U.S. annually, but only 200,000 tons of its 4-million-ton yearly demand of soybean meal is shipped in from American farmers. The majority of its soybean meal is purchased from South America.
Minnesota farmers hope to change that.
Bill Gordon, a rural Worthington farmer and vice president of the American Soybean Association, hosted the trade team. Its afternoon visit to the Worthington area included tours of the New Vision fertilizer facility and 266 Ag Service, as well as visits to three local farms to see their soybean fields. The day wrapped up with a steak fry at the Gordon farm with about 20 local farmers and members of the Nobles County Corn and Soybean Growers Association.
The Indonesians were visiting the U.S. as a reciprocal trip sponsored by the U.S. Soybean Export Council (USSEC). In late June, Gordon was among a U.S. soybean contingent to visit the southeast Asian island nation.
“Especially in Asia, it’s about relationships,” Gordon said. “We initiated the conversation talking about not only nutrition, but our quality and value of our northern soybean meal and U.S. soybean meal in general.”
The whole soybeans Indonesia imports from the U.S. are used to make tempeh, a fermented soy food similar to a cracker.
“It’s kind of the food of the poor,” described Kim Nill, director of market development for the Minnesota Soybean Growers Association. “If you can’t afford meat, you can afford tempeh.”
The soybean meal, meanwhile, is used in poultry feed.
Gordon said showing Indonesians the quality and quantity of U.S. beans will hopefully encourage them to purchase more soymeal for their poultry producers.
A primarily Muslim nation, Indonesia’s main protein source is poultry — chickens and duck. The country doesn’t currently have the capacity to process its own soybeans into meal, but two large feed mills are under construction.
“That tells us they’re going to be expanding,” Gordon said.
Minnesota soybean farmers are poised to meet Indonesia’s demand.
The state has long been a supplier of soybeans to Indonesia through its transportation links that take soybeans by rail to the west coast.
Omaha, Neb.-based AG Processing, Inc. (AGP), a large farmers cooperative with grain storage and soybean crushing facilities throughout the Midwest states of Minnesota, Iowa, Nebraska, South Dakota and North Dakota, built a terminal at Grays Harbor, Wash., that is optimal for loading soybean meal onto ships, Nill said.
The panamax ships can carry 55,000 tons of soymeal to countries like Indonesia.
“This is a propitious moment in history," Nill said. "Because of the China-U.S. trade war, China is suddenly buying a lot of that South American soy meal. We’re hoping there won’t be any left for the Indonesians, and they’ll start buying from us more.”
Expanding the Minnesota soybean market in Indonesia has the potential to improve the price paid to farmers.
“Right now, Minnesota soybean farmers face very, very low prices for a number of reasons," Nill said. "We have an awful lot of soybeans in storage from last year. In addition, there was an outbreak of a swine disease in a lot of overseas countries, mainly China. African Swine Fever has caused a real reduction in demand (for soy) in a lot of places.
“We would very much like to increase our sales to overseas customers,” Nill added.
While a primary focus of the trip was to meet with farmers and see soy product, the Indonesians also toured several poultry production operations. They made stops in Virginia and Maryland before traveling to the Midwest. Thursday morning, they toured an egg laying operation near Sibley, Iowa.
“Many of the visitors are coming from FIT Company,” said Budi Tangendjaja, technical consultant in nutrition and feed technology for USSEC in Indonesia. “They are learning that feeding U.S. soybean meal is better for production for the chicken farm. Broiler-breeder companies love to have a consistent quality of the product.”
Tangendjaja said the group of 12 represented seven or eight different companies, including three of the largest poultry producing companies in Indonesia.
“It’s a good opportunity for them to learn,” he said.
After touring a chicken layer facility near Sibley, he said the guests couldn’t imagine housing 3.6 million birds in one location.
“We never have such a big farm like that,” he said, adding that in Indonesia, one person can manage only about 3,000 birds.
Tangendjaja said the country is looking at vertical integration, something the U.S. has done to gain efficiencies. During their multi-state tour, they garnered ideas on how to make it work for them.
On Friday, the group traveled to Mankato for a stop at the Minnesota Soybean Growers Association offices, and then on to the Twin Cities to learn about University of Minnesota soybean research.