Claremont farmer cultivates potential in India as a way to use more soybeans

Connie Sieh Groop
Special to the Farm Forum

Why did the soybean farmer go to India to talk turkey? To sell more soybeans.

“I helped persuade our South Dakota Soybean Research and Promotion Council (SDSRPC) to look at the potential consumption of poultry in India,” Mike McCranie, a soybean farmer from Claremont said. “As the demand for increased protein increases in the diets of people in India, their domestic market cannot sustain the demand. Companies such as Kentucky Fried Chicken, McDonald’s and Subway have an increased presence in the country, and they need turkey for sandwiches and chicken for nuggets. Turkeys and chickens eat soybean meal which creates more demand for our beans.”

McCranie represents SDSRPC on the United States of America Poultry & Egg Export Council, which works on exporting and market development for the industry. McCranie traveled to India as USAPEEC hosted its first industry trade mission to India with 12 U.S. poultry and egg exporters participating. They stopped in New Delhi and Mumbai.

India’s economy increases by 8.2 percent each year. The country has a population of 1.34 billion and projections are that its population will surpass China by 2025. This could be a significant market for U.S. poultry and egg products. India’s current per capita consumption for protein was under 4 kg in 2016. The government of India regards 9 kg as the minimum for nutritional needs. With poultry the only major protein option for India, U.S. poultry stands to benefit from helping to increase local consumption.

USDA is projecting a bumper soybean crop in South Dakota this year at 277 million bushels. Those in the industry look for new markets which can use the soybeans and soybean meal. McCranie said it is estimated that 47 percent of U.S. soybeans are exported. Of soy meal fed to animals in the U.S., 51 percent is fed to poultry. By encouraging those who live in countries such as India to eat more turkey and chicken, this could increase demand for soybeans. Turkey processing plants such as Dakota Provisions in Huron could provide frozen product which could be exported and consumed in India. McCranie noted that turkeys in South Dakota are fed bovine-free feed, an important consideration for consumers in India.

South Dakota is one of the top 10 soybean exporting states in the country, totaling $1.3 billion in soybean exports annually. According to statistics on the South Dakota Soybean website, South Dakota turkeys consume on average 47,000 tons of soybean meal, while egg layers in the state consume 15,000 tons of soybean meal on average. South Dakota raises an average of 5 million turkeys a year. Turkeys produced 181.5 million pounds of meat in 2015. South Dakota poultry generates over $2.5 million in taxes and over 300 South Dakota jobs.

“The potential in South Dakota is huge,” McCranie said. “It will take a few years to get everything in place. Adequate cold storage is a big issue. Companies are building the storage. As incomes rise, today’s young professionals purchase meals at restaurants rather than cooking at home. They would rather buy groceries once a week at supermarkets, and they like to have food delivered. This differs from the traditional household where people buy their food daily from the live market.”

USAPEEC works to open new markets for their products, which can offset the tariffs imposed on ag products. They have made inroads into South Africa, Thailand and Morocco. Some trade barriers in India still exist that U.S. poultry would need to overcome, such as high tariffs (30 percent on whole chicken and all turkey, and 100 percent on all other chicken). If they can manage those barriers, this would be a significant market for U.S. poultry and egg products.

McCranie said the highlight of the mission was a reception at the home of the U.S. ambassador to India, Kenneth Juster, with about 150 importers, retailers and representatives from the hotels, restaurants and institutions. Juster, along with USAPEEC President Jim Sumner, McCranie, and Jeanne Bailey, agricultural counselor at the U.S. Embassy in New Delhi, were at the event. AJC International and Perdue Farms provided chicken and turkey meat products for the event. The products were prepared locally with regional spices such as curry.

“I only got heartburn twice; it was worth it,” McCranie said.

Besides the reception, one-on-one meetings in New Delhi and in Mumbai provided an opportunity to speak with importers. The team visited meat processing facilities and cold storage units. Contributions by the United Soybean Board, the South Dakota Research and Promotion Council, and USDA’s Market Access Program made the trade mission possible.


Why now?

India officially opened its doors for U.S. poultry and eggs in March of this year. The first small shipment of U.S. chicken leg quarters landed in India in mid-April via air. USAPEEC executives visited India in March where they met with USDA APHIS, FAS, and held meetings with potential importers to discuss market opportunities. India’s importers welcomed the opening as their fast food industry is struggling to find products that meets their quality standards. They sell over 90 percent of India’s broilers in live markets while the processing industry comprises only 5 percent. India has seen small amounts of turkey imports from Spain and Belgium; although, they have struggled with quality issues. This led to the trade mission in September.

McCranie is optimistic that India will become an important market for U.S. poultry and that will increase the number of soybeans used. McCranie said, “We can provide the value-added poultry they need. We worked on building one-on-one relationships across many levels. It will take time, but it will happen. It’s not a once-and-done visit.”

Local ag production

About 50 percent of the population in India is involved in production ag. While most operations are small, there are some large facilities for raising poultry. Ag producers have a lot of voting clout. That’s why it’s important to build relationships across the board to allow frozen poultry products to come into India.

India is Asia’s second largest producer of soybeans, and it accounts for 3.95 percent of global production according to Statista. Livestock in India consumes most of the soybeans produced in the country. The country exports some soybean meal. Annual production for the three seasons up to 2014-15 had ranged from 9.5 to 12.2 million metric tons annually.

McCranie said the people they talked to in the Indian government were open and optimistic. Those importers for the fast food industry really want the availability of frozen U.S. poultry products to fit into their business model. There are a lot of companies looking forward to expanding to meet the demands. They need to convince the population that turkey is a protein option for more than holiday dinners. Having adequate cold storage available is critical.

“We put a small crack in a very large door. We are the first trade mission to advocate specifically for poultry,” McCranie said. “We need to bring buyers from India to our poultry farms and visit places such as Dakota Provisions to see our the turkey-processing plant.”

For now, the turkey sandwiches are selling well at the Starbucks locations in India.

“We’re taking baby steps in this market and trying to find the right approach. We need the buy-in from importers and government officials. They must convince their domestic producers that this is not a threat. Market development takes time. Other countries will want in. We must prove to India that we have a quality product and we have enough to satisfy those markets. We never know when we may lose a market, so we have to cultivate new markets all the time.”

Mike McCranie of Claremont met with U.S. Ambassador to India Kenneth Juster on a recent trade mission.
A traditional live market in India.
As income rises in India, more people are bypassing the live markets and making food purchases at supermarkets. They are looking for variety, such as turkey for alternative food choices.