Ten huge shiploads of Virginia soybeans, worth nearly $300 million in all, will head to China this fall under a deal announced Monday by Gov. Robert F. McDonnell.
A company based in Dandong, China has agreed to buy 10, 2-million-bushel shipments of soybeans from Perdue Agribusiness for use as animal feed. Soybeans are currently trading at $14.86 per bushel, although the price could fluctuate before they are ready to ship in October.
The export deal was finalized in New York last month but announced Monday as McDonnell prepared to leave the state for his sixth overseas trade mission, this time to Germany, Switzerland, Great Britain and Sweden. He heads to Europe again next month.
“Growing exports are key to growing our economy,” McDonnell said in a prepared statement. “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.”
Agriculture and forestry are Virginia’s largest industries, and McDonnell (R) and administration officials have traveled the globe to promote their exports. They’ve struck deals to sell wine to China, beef cattle to Canada, dairy bulls to Russia, and wine, seafood, and specialty foods to the European Union. Since 2010, those efforts have helped secure about $200 million in new agricultural exports — a figure now eclipsed by the soybean deal.
McDonnell worked with the General Assembly to provide money in the state budget to hire trade representatives in China and India, and to pursue export opportunities in Europe, Northern Africa and Latin America.
“The governor and myself have been going around the world playing matchmaker, bringing together Virginia agribusiness with foreign purchasers,” Todd Haymore, secretary of agriculture and forestry, said in a phone interview from London.
After McDonnell introduced Dandong to Perdue last year, the Chinese firm bought five vessels of the 2011 soybean crop from Perdue, which owns and operates a major deep water export facility in Chesapeake. U.S. Representative Robert Hurt (R), who had a hand in the most recent deal, said it will help farms in his district weather the tough economy.
“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,” he said. “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.”
In addition to the soybeans, Perdue has agreed to help improve the quality of the animal feed that Dandong produces at its soybean crushing and soy meal production facilities.
“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.