State signs $400 million trade deal with Taiwan

Today, Governor Dave Heineman announced that Lt. Gov. Lavon Heidemann and members of the Nebraska trade delegation to Asia signed agreements with Taiwanese grain and soybean trade officials for approximately $400 million of Nebraska corn, soybeans and wheat to Taiwan. Lt. Gov. Heidemann is currently leading a Nebraska trade mission to Taiwan and Japan.

“This is good news for Nebraska,” Governor Heineman said. “This agreement shows the value of developing and fostering relationships when it comes to trade opportunities.”

“Throughout this visit we’ve been told by the Taiwanese that they appreciate Nebraska’s efforts to develop meaningful connections with government leaders, importers and other business leaders,” Lt. Gov. Heidemann said. “They also continue to point out that they enjoy knowing Nebraska will deliver high-quality commodities.”

The letter of intent, signed by Lt. Gov. Heidemann and Agriculture Director Greg Ibach at a ceremony in Taipei, Taiwan, pledges sales valued at $401 to $472 million over a two-year period. Taiwanese parties to the agreement included representatives of the Taiwan Flour Mills Association, Taiwan Feed Industry Association, and the Taiwan Vegetable Oil Manufacturers Association.

While signed by industry officials and Nebraska government leaders, the agreement pledges the purchase of crops through negotiations between importers and private suppliers. The agreement is similar to agreements signed by Gov. Heineman on his 2007 trade mission and that signed by a state delegation led by Dir. Ibach in 2010. The 2007 and 2010 agreements each pledged around $500 million in sales of Nebraska corn, soybeans and wheat. Dir. Ibach said those agreements have been fulfilled.

“We are pleased to have another opportunity to secure sales of Nebraska soybeans, wheat and corn,” Dir. Ibach said. “It shows that there is value in showing up and asking for business.”

The agreement specifies the intent to purchase 800,000 to 1 million metric tons of corn, worth an estimated $176 million to $220 million; 200,000 to 220,000 metric tons of soybeans, valued at an estimated $120 million to $132 million; and 500,000 to 600,000 metric tons of wheat, valued at an estimated $105 million to $120 million.

Von Johnson, chairman of the Nebraska Wheat Board, said the Nebraska wheat industry appreciates the opportunity for sales with Taiwan. “Strong export markets are critical to a supply and demand equation that means success for the Nebraska wheat industry,” Johnson said. “We appreciate the efforts of the Lieutenant Governor and Director Ibach and will do our part to raise a quality product to fulfill the agreement.”

In addition to finalizing the trade agreement, the delegation met with Taiwan Vice President Wu Den-yih. They also held meetings with officials in the Ministry of Economic Affairs, the Counsel of Agriculture, and the Ministry of Foreign Affairs and attended a ceremony to sign a proclamation marking the 30th anniversary of the Nebraska-Taiwan sister-state relationship.

Taiwan is Nebraska’s 13th largest export market with $94 million in imports in 2012 but was the state’s 10th largest agricultural export market that year.

The Lt. Governor and the Nebraska trade delegation will depart tomorrow for Tokyo, Japan, to participate in the annual Midwest U.S.-Japan Association Conference. This is the 12th foreign or reverse trade mission of the Governor’s administration.