NDTO News Article

Sprouting Bean Deals have North Dakota Flying High

Published in The Forum of Fargo-Moorhead Farmers’ Forum – December 5, 2014

Three North Dakota exporters will fulfill half of the total United States bean sprout quotas set by the U.S.-Korea Free Trade Agreement.

The exporters have signed contracts to export 1,600 metric tons of identity-preserved soybeans, totaling approximately $2 million, to Korea in 2015. The Korean Bean Sprouts Association plans to increase that amount in 2016, according to the North Dakota Trade Office.

Only the Korean Bean Sprouts Association has a quota from the government to import soybeans to be used as sprouting beans, said Jiwon Kim, the trade office’s manager of international business development.

That half of the quota will come from NDTO members is a big deal, he said.

“Not only because it is lucrative for our companies but also because it is a reflection of the strong trade relationship that exists between North Dakota and South Korea, a relationship that we expect will only grow stronger,” he said.

The U.S.-Korea Free Trade Agreement was signed into effect in 2012 to help increase trade flow between the United States and South Korea by reducing tariffs and trade boundaries on a number of products. Korea had previously protected its domestic soybean growers by putting a 489 percent import duty on foreign soybeans, according to the trade office.

When the agreement took effect in 2012, North Dakota’s exports of agricultural and construction equipment to Korea immediately tripled to $20 million, the trade office stated. More than $1.2 million of North Dakota barley has also shipped to the country.

North Dakota is one of seven states that sends more than 60 percent of its exports to free trade partners, according to the trade office.

Casselton, N.D.-based Sinner Bros. & Bresnahan (SB&B), a family-owned, large-scale agribusiness, is one of those companies.

“It’s a difficult market,” said Bob Sinner, SB&B owner partner and president. “The sprout market is not just about having good germination beans, but beans that have a certain germination quality.”

That quality, he said, is dependent on the grower, the harvest moisture, and the variety characteristics. Since the moisture cannot be controlled, he said there’s some risk in making a commitment to provide the sprouts.

Though Sinner said it’s a risky and very strict market, he thought with the company’s number of producers and sprout varieties, it was also a market SB&B could handle.

“The way we minimize our risk is to spread out our production footprint, the location of where we plant our bean, and hope we will get a range of moisture levels at harvest,” he said.

So far, Sinner said, it has worked out well.

“The Korea Bean Sprout Association has made numerous trips to this region to sincerely develop a relationship with companies for the supply of soybeans for sprouts. They’re committed to this region. They’re committed to companies like ours,” he said. “It’s really kind of a tribute to the producers in this region.”

North Dakota and the upper Midwest are known for having some of the highest quality soybeans in the world, Kim said.

“When the Korean Bean Sprouts Association first tested the quality of our soybeans, they were so impressed with the obvious attention and care our growers give to their product,” he said. “Farmers from this region are known around the world for this care and the quality products that result from our farming and processing methods.”

The Korean Bean Sprouts Association first visited the North Dakota Trade Office last fall, looking for high-quality, identity-preserved soybeans to import for food use as bean sprouts.

The identity-preserved process ensures the purity or identity of soybeans with unique attributes, Kim said. Such soybeans can be segregated by variety, quality or specialty trait such as high protein, high sugar or isoflavone content.

The trade office introduced the Korean Bean Sprouts Association to a number of soybean exporters and the association toured the state four times before signing the contracts.

Exporting takes an extreme amount of time, energy and financial resources, Kim said.

“When NDTO and the state of North Dakota can assist in building a government-to-government bridge, it benefits our companies greatly,” he said. “Once there is a strong relationship on the government level, business transactions often follow.”

This is just the beginning of the relationship in the sprouting beans industry, Kim said.

“We expect our producers will export more, year over year, to fill US-Korea Free Trade Agreement quotas,” he said.