July 12, 1999

The American Soybean Association and the North Carolina Soybean Association have asked officials to pressure companies to reconsider importing two shipments of Brazilian soybean meal. They say U.S. soybean and soybean meal prices are at their lowest levels in 23 years and supplies are the largest in more than a decade.

They sent letters to North Carolina's congressional delegation, members of the state legislature, the governor, commissioner of agriculture and secretary of commerce. Several North Carolina livestock integrators are importing the meal from Brazil.

About $16 million will be taken out of North Carolina and U.S. soybean farmers' pockets if the two remaining shipments from Brazil are allowed to dock, they said.

Murphy Family Farms, Nash Johnson & Sons Farms, Prestage Farms, Carroll/Smithfield, and Goldsboro Milling, all North Carolina livestock firm, contracted to import as much as 75,000 tons of soybean mean into the United States. They cited high U.S. transportation costs as the reason for the imports. Southeastern livestock and poultry operators have expressed concern about the impact of rail logistics on their ability to source Midwest grains dependably this season.

ASA, however, cites trade sources, market analysts and other livestock integrators who say the group likely will lose $5 per ton on the deal. "Skepticism about the economics of this Brazilian transaction is reinforced by the steadfast refusal of the North Carolina livestock integrators to share information on a confidential, non-disclosure basis," says ASA. Cost estimates compiled by ASA from trade sources were provided the firms for comment last month, but they did not respond.

"It's hard to understand why these companies would turn their backs on the very farmers who have supported them during hard times," says ASA President Mike Yost, Murdock, MN. "Soybean farmers this year are investing over $3 million in producer funds to help support pork and poultry exports. Soybean farmers also actively supported federal assistance measures for the pork industry when it recently faced the lowest prices ever."

The first of three shipments has arrived; the other two are due in July and August. ASA and the North Carolina Soybean Association asked the North Carolina legislature to urge the companies to reconsider.

"We recognize that the health of our industries is closely linked," says Yost. "That is why we are so disappointed that these firms would turn their backs on North Carolina and other U.S. soybean farmers to complete a transaction with questionable economics at best."