The Machong Port in China is one of the major soybean consumption areas in in Guangdong province. It is an entry hub to major downstream companies in the country and sends grain products to a thriving feed industry producing millions of hogs, broilers, and aquaculture.
Zhang Xiaoping the China Director of the U.S. Soybean Export Council leads a group of farm broadcasters through this port in Guangzhou.
He says they use the demand of big animal producers as specific marketing targets of U.S. soybean exporters, "We are working with them, educating them, to create the demand and also the preference for U.S. soy. Those are our target audience."
Zhang says 10 years ago, they changed a marketing strategy to build preference and now Chinese businesses prefer U.S. soybeans, "Because we have this competitive advantages in terms of the consistent quality, the efficient logistics, a timely delivery, and also the accessibility, U.S. can produce, sustainably, the soybeans supply the customer needs in China, and also, the beans itself is rich in digestible amino acids."
Chinese businesses also prefer the sugar content, color, and flavor.
This river way is one of the best places to move products. The area is in the top three for soybean meal, corn and other feedstock consumption.
Zhang says, "And the water system is so developed and is so busy on the river that that's the most efficient way for the customers to receive their cargo and for this crushing facility to deliver their products to the end users and integrators. So, that's very cost effective."
Upstream, the Dong Fuzhiyuan Feed Stuff Protein Crushing Facility welcomes the farm broadcasters to give a tour of the facility. Workers were hauling soy meal off of boats.
This one location can crush more than 11,000 metric tons of oilseeds a day, which is around 400,000 bushels. For reference, an ocean vessel can haul about 65,000 metric tons. The company as a whole can crush 50,000 metric tons a day and hopes to increase capacity by another 30,000 in the next five years, which would make them number one in China.
Zhang says, thirty percent of the soybeans processed here are from the United States, "The crushing industry is still expanding. And for the one we visited, we have another expansion plan to add more crushing capacities in the Guangdong province. at least two more crushing facilities will be added in the east of the province and west of province. So the whole region will be well covered."
Crushers in China believe the trade war with the U.S. will be temporary and hope to keep supplying feed for industry demand.
Zhang says during the trade war they are looking at other options, "Currently, they cannot crush more beans from the U.S. they want to try and seek some alternatives like the canola from Canada and some other feed ingredients and also the beans from non-U.S. origins so to keep their operation and supply the need in this particular region."