Governor Bob McDonnell announced today that Perdue Agribusiness, Incorporated, which owns and operates a major deep-water export terminal for grains and oilseeds in Chesapeake, has reached a new agreement with China's Jiusan Oil and Grain Industries Group (Jiusan) to supply up to 8 million bushels of soybeans in a series of bulk shipments for the 2013-14 crop. The agreement was facilitated during meetings held in Beijing in April during the Governor's trade and marketing mission to Asia. Agricultural and forestry exports from Virginia continue to grow, with the Commonwealth reaching a record high of $2.61 billion in 2012.
Governor McDonnell and staff organized a meeting and related discussions between Jiusan Group officials and executives from Perdue AgriBusiness, where the two sides agreed to the sale of up to four Panamex vessels of soybeans from the upcoming season's crop, which will be ready for export in October. Each Panamex vessel holds approximately 55,000 metric tons, or more than 2 million bushels, of soybeans. The value of the shipments will depend on market prices at the time each order is placed. For reference, the August 12, 2013, closing price for new crop soybeans from the Norfolk terminal, as reported by Virginia Market News Service, was $12.10 per bushel.
Speaking about the new agreement during a tour of Perdue's export facility in Chesapeake with Perdue executives, Governor McDonnell said, "Virginia's aggressive marketing and development efforts and new manpower around the world are yielding results in the form of new sales agreements and new business partners for the Commonwealth. Exports have reached record levels the last few years and Virginia agribusinesses are engaging daily with potential new customers in key growth regions. Combine these strategic efforts with our high quality agricultural and forestry products, outstanding agribusinesses, such as Perdue, and world-class ports, and Virginia has all the necessary ingredients in place for more export growth and opportunities in the future. And, the more new business partnerships we facilitate, the more economic opportunities there are for businesses and citizens in the Commonwealth. More agricultural exports equal more jobs here in Virginia."
During the almost two-week trade mission to China and Japan, Governor McDonnell, Secretary of Agriculture & Forestry Todd Haymore, and Virginia Department of Agriculture and Consumer Services' (VDACS) staff had an itinerary partially focused on meeting with leading agricultural importers as part of the Governor's trade initiative to grow agricultural exports from Virginia. China was the leading market for Virginia's agricultural products, buying approximately $638 million in farm and forest products from the Commonwealth. By comparison, China imported approximately $170 million in agricultural and forestry products from Virginia in 2009.
"We look forward to working with the Jiusan Group in this new partnership, and to continuing to expand the market for Virginia soybeans," said Dick Willey, President of Perdue Agribusiness. "With the assistance of Governor McDonnell and his staff, we have formed new business relationships that are benefiting Virginia farmers and U.S. agriculture, and we appreciate their efforts."
"We thought the meeting in Beijing with Governor McDonnell in April was quite productive," said Jiusan Oil and Grain Industries Group Co., Ltd. "We are pleased that Jiusan Group has been able to work with Virginia officials to start a new business relationship. Jiusan has aggressive growth plans in the future and making new business partnerships will be important for Jiusan's continuing successful business development."
The new agreement, which occurred after VDACS staff first introduced Jiusan and Perdue officials in 2012 to explore opportunities for a business relationship, will mean soybean shipments from Virginia will reach new market areas within China through Jiusan's network of processing plants. This agreement will further expand the reach of Virginia's agricultural exports to this fast growing market and continue to diversify Virginia's customer base in the leading market for Virginia agricultural exports.
The Jiusan Group, based in Harbin, China, is a wholly-owned subsidiary of Beidahuang Group and one of China's largest soybean processors and a top soybean importer. The company operates 12 soybean crushing facilities, where the soybeans are processed and soybean oil is extracted. The oil extracted is primarily used as cooking oil for the domestic market in China, while soybean meal, another byproduct of the crushing process, is used for animal feed. Jiusan is listed as one of the "Top 500 Chinese Enterprises" by China's State Administration of Industry and Commerce.
Perdue AgriBusiness ranks among the top U.S. grain companies and is committed to helping its customers prosper with flexible, forward-thinking solutions for agriculturally based products from a uniquely trusted name. Perdue AgriBusiness merchandises grain and oilseeds, processes oilseeds, custom blends feed ingredients, refines edible oil and trades a wide variety of agricultural commodities domestically and internationally. Perdue AgriBusiness is a direct exporter of US commodities through its deep-water port in Chesapeake, Va. With an entrepreneurial spirit, Perdue AgriBusiness ventures touch such diverse opportunities as bio-energy, organic fertilizers and specialty livestock feeds. Perdue AgiBusiness is a division of Perdue Farms, the family-owned, family-operated company working to become the most-trusted name in food and agricultural products.
In 2010, Governor McDonnell implemented a strategic plan to grow the state's agricultural and forest product exports. Working in close partnership with Virginia's producers, agribusinesses, and exporters, Secretary Haymore and VDACS Marketing and Development staff focus on retaining strong market presence in mature and established markets like Canada, China, and Japan, pursuing new opportunities in emerging markets such as India and Mexico, and developing business in unconventional markets, such as Cuba and Venezuela. This team also works with state government partners, including the Secretariat of Commerce and Trade, the Virginia Port Authority, and the Virginia Economic Development Partnership, to find more export opportunities.
To supplement the strategic effort, the governor secured new international marketing funds from the General Assembly over the last three years for VDACS to open agricultural trade offices in India, China, Latin America, and the European Union, all regions that contain some of the world's largest and fastest growing economies. The Governor formally opened the China agricultural trade office during the April trade and marketing mission. Later this year, Virginia will open an agricultural trade office in Canada. VDACS has had a trade office in Hong Kong for more than 20 years.
Since taking office in 2010, Governor McDonnell led overseas trade missions to Canada, Great Britain, Ireland, Switzerland, the Netherlands, Sweden, Germany, Japan, China, South Korea, Israel, and India. These missions and the work of VDACS' new international marketing staff with Virginia's private sector exporters have resulted in well over $500 million in new agricultural exports from Virginia so far.
According to a 2013 economic impact study, agriculture and forestry are two of Virginia's largest industries, with a combined economic impact of $70 billion annually. Agriculture generates more than $52 billion per annum, while forestry induces over $17 billion. The industries also provide more than 400,000 jobs in the Commonwealth according to the Weldon Cooper Center for Public Service at the University of Virginia.