Governor Bob McDonnell today announced the expansion of a major soybean export agreement between Perdue Agribusiness, which owns and operates a major deep water export facility in Chesapeake, and the Dandong Port Group and Dandong Pasite Grain and Oilseed Co. of Dandong, China.
Under terms of the expanded export agreement, Dandong will purchase from Perdue up to 10 Panamex vessels of soybeans from the 2012 crop, which will be ready for export in October. Each Panamex vessel holds approximately 55,000 metric tons, or about 2 million bushels, of soybeans. On Friday, the Chicago Board of Trade per bushel price for soybeans was $14.86. Dandong purchased five vessels filled with 2011 crop soybeans from Perdue as a result of the original business agreement signed in September 2011 in Richmond. The first shipment from the 2011 crop was worth approximately $25 million.
Speaking about the agreement, Governor McDonnell said, "Today's announcement is more great news for Virginia agriculture, especially our soybean producers. Growing exports are key to growing our economy. In the last few months alone we've announced a record export level reached in 2011 and new trading deals with countries around the world, some of which were initiated during international marketing and trade missions. I applaud the leadership of Perdue and Dandong for building on their existing relationship to increase exports from Virginia. Their work and cooperation means more economic opportunities for our producers, shippers, and so many others between our farms and world-class ports."
The deals, which were finalized and signed in New York City last month during a ceremony attended by senior leadership of Perdue and Dandong as well as the senior government official of the Liaoning Province where Dandong is located, were witnessed officially by U.S. Representative Robert Hurt (VA-5th) and Virginia Secretary of Agriculture & Forestry Todd Haymore on behalf of Governor McDonnell. Chief of Staff Martin Kent and Secretary Commerce and Trade Jim Cheng also attended the ceremony.
In addition to the new exports, Perdue and Dandong also agreed to terms on an agronomic cooperation agreement that will assist Dandong's efforts to improve the quality of animal feed stock. The agreement is for use in Dandong's soybean crushing and soy meal production facilities. It primarily calls for Perdue to assist Dandong with its efforts to improve the quality of animal feed stock developed, in part, from soybeans sourced from Perdue.
"We are very pleased with the results from the first year of our business relationship with Dandong and are excited about continuing to build on it in through product sales as well as expertise sharing in the coming year," said Jim Perdue, Chairman of Perdue. "We are grateful to Governor McDonnell and his team, and to the Commonwealth of Virginia, for introducing us and facilitating the original agreement, and for their support as we grow this mutually beneficial relationship."
"I am pleased to expand our already solid business relationship with Perdue Agribusiness," said Mr. Wenliang Wang, Chairman of the Dandong Port Group and Dandong Pasite Grain and Oilseed Co. "Perdue has been a valuable partner in our expanding soybean import growth and we look forward to continue working with the company in the coming years. Governor McDonnell introduced our company to Perdue last year and his on-going efforts to facilitate greater opportunities for agribusiness cooperation as well as this agreement was crucial to its success. I appreciate the Governor's continued commitment to agriculture."
"I was honored to assist Governor McDonnell and his team in reaching an expanded export agreement between Perdue Agribusiness and the Dandong Port Group," said Rep. Hurt, who represents Virginia's 5th Congressional District. "Our family farms and small businesses are the lifeblood of our economy in Virginia's 5th District, sustaining many rural communities and creating the jobs that we need in this stalled economy. This expanded export agreement is great news for the 5th District and the Commonwealth and I was proud to be a part of ensuring that our Central and Southside Virginia agribusinesses continue to have opportunities to grow and expand their reach, both in Virginia and internationally."
After taking office, Governor McDonnell fully integrated the promotion of agriculture and forestry products into his overall economic development agenda and implemented a strategic initiative to help Virginia's producers, agribusinesses, and shippers increase exports into the global marketplace. Since 2010, the Governor has worked with a number of the Commonwealth's agribusinesses to help secure approximately $200 million in new agricultural exports, including soybeans and wine shipments to China, beef cattle to Canada, dairy cattle to Russia, and wine, seafood, and specialty foods to the European Union.
The Governor also has worked with the General Assembly to secure new international marketing funds for the Virginia Department of Agriculture and Consumer Services (VDACS) to hire trade representatives in China and India, two of the world's fastest growing economies. New appropriations sought by the Governor in the recently completed state budget will allow VDACS international marketing staff to pursue new export opportunities in other fast growing regions, such as Europe, Northern Africa, and Latin America.
Agricultural exports from Virginia reached an all-time high of $2.35 billion in 2011. Virginia's top customers include a diversified portfolio of developed and emerging countries, including Morocco, China, Canada, Switzerland, Egypt, and Cuba.
Agricultural exports are an increasingly important part of the nation's and Virginia's economy. A United States Department of Agriculture study concluded that for every $1.00 in agricultural exports from a state, $1.40 is generated in-state from related services, such as production, processing, shipping, storing, and financing.
Agriculture and forestry are Virginia's largest industries, with a combine economic impact of $79 billion annually: $55 billion from agriculture and $24 billion from forestry. The industries also provide approximately 500,000 jobs in the Commonwealth according to the Weldon Cooper Center for Public Service at the University of Virginia.