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Luepke travels to Korea on trade mission

Lafayette Nicollet Ledger of Lafayette, Minnesota

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John Luepke may be a "junior member" on the Minnesota Corn Growers Association board, but the Courtland farmer had luck on his side when his organization asked for someone to take part in a trade mission to Korea. Only Luepke and one other board member were available to go-and the other member's passport was due to run out before the trip would be completed.

Luepke represented the Corn Growers on the Minnesota Mission to Korea September 25-October 1. The 33-mem-ber group included Minnesota Governor Mark Dayton and seven ag representatives, along with representatives of education and industry.

The trip was designed to improve opportunities for exports and trade.

"We put a human face on it," Luepke said. "They see that we appreciate their business. Korea is our fifth largest customer. They're very pro-American. We have a good ag trade surplus, even through we have an overall deficit."

In briefings during the trip, Luepke learned that 80 percent of Korea's GDP is tied to world trade as the country has only 17 percent arable land and few natural resources. Korea has one of the world's largest steel industries-but no iron and little coal.

The government supports monopolies to get business started.

Currently, there is a 14 percent tariff on U.S products going to Korea while the U.S. has a two to three percent tariff on Korean products coming to the U.S. 3M factories in Korea import $800 million in sub-assemblies from the U.S. They add value and export $15 billion.

Fifty percent of the country's food is imported, along with 75 percent of its feed grains and soybeans. Most farms are small-less than five acres-using hand labor and small equipment. They raise rice, fruit, vegetables, ginseng, and barley. Rice is subsidized, but consumption is down 50 percent in the last 25 years. Beef and pork imports are rising, but Australia, Canada, and Chili are competing with the U.S.

"I'd sty their ag is many years behind ours, but their industry is ahead of ours," Luepke said.

Farm land costs $130,000 per acre. Real estate in downtown Seoul is priced at $15,000 per square foot. In residential neighborhoods, land costs $1,000 per square foot.

When the trade delegation dined with the American Chamber of Commerce of Seoul, Luepke sat next to David Ki-Yong Kim, chairman of Cargill in Korea. Seated next to him was B. K. Jung, president of the 1,600 employee 3M in Korea.

"He treated me like a hero when he found out I worked for 3M for 35 years," Luepke said with a chuckle.

After a briefing at the Korea World Trade Center, group members met with industry representatives. Luepke met the com buyer for the largest corn refining company in Korea. His company uses 23 million bushels annually, at two plants. One uses GMO com, the other non-GMO corn.

"The larger food and beverage companies will not buy high fructose corn syrup produced from GMO corn," Luepke learned. "He is having a rough time finding non-GMO corn. He gets a little from the U.S. through New Orleans, but most is from Hungary and Serbia."

Luepke continued, "I explained that he would have to pay a premium to get identity preserved non-GMO. They do not want to pay more as they have price controls on the products they sell. IP documentation is extensively creating difficulties for importers."

That evening, the Minnesota group was hosted by Hanwha Corporation, one of Korea's largest conglomerates.

"They are interested in buying into a hog processing plant in southern Minnesota or northern Iowa," Luepke said "They rolled out the red carpet for the governor and our party."

The next day, the group visited the National Agriculture Cooperative Federation.

"They have over 1,000 co-ops. They charge five percent for urban loans but only three percent for farmers. The coop has helped increase the standard of living of the farmers. They have 2.4 million members and are involved in farm machinery rentals, fertilizer, pesticides, distribution, and retail of farm production. They have a ten percent share in the supermarket dollar," Luepke noted.

The next stop was the Ministry of Food, Agriculture, Forestry and Fisheries.

"They are aware of the importance of ag cooperation with the U.S. They consider us a mutually beneficial partner," Luepke said. "The U.S. took ten percent of their exports and provided nine percent of their imports. We export $40 billion to Korea but import $49 billion, so we can export a lot more, just to catch up."

Later that day, the group visited a Good Morning Foods store and meat processor. The company has a relationship with Hormel of Minnesota. The Hormel representative that met the group grew up in Austin, Minnesota!

That evening, the group was invited to the residence of the U.S. Ambassador. Each trade delegation member was allowed to invite guests so Luepke invited the parents of a student who had attended MVL High School as an exchange student and was a friend of his daughter Kristen.

On their final day in Korea, the group visited a new grain terminal-open only a month-a dairy, and a soybean crushing plant.

Cargill-Purina is a major stockholder in the Taeyoung Grain Terminal and plans to build an oil crushing facility on adjacent property.

"They can unload two ships at a time and unload the largest ship in three to four days," Luepke said. "They are currently loading about 200 trucks per day and plan to handle three million metric tons a year-110 million bushels," Luepke said. "Most of the corn, soybeans, and wheat comes from the U.S., with some from Canada."

The 60-cow dairy is housed in a building without walls.

"They ran fans in the summer. They also have automatic brushes," John said. "It is right in town and also has a large garden-but they give the manure away. All the complete ration feed is purchased at 25 cents per pound."

He continued, "They currently get $44.00 per hundred weight for milk. That's negotiated with the Seoul Dairy Cooperative."

Cows in the herd average 26,000 pounds milk annually. The farmer uses AI and has attended World Dairy Expo in Madison, Wisconsin.

The last ag stop was a soybean crushing plant which "seemed quite similar to one here, but smaller."

The feed mill at this plant produces feed for dogs, cats, pigs, chickens, shrimp, and two kinds of fish.

The company has another plant that produces sesame oil.

Governor Dayton gave three speeches during the trip and "did a great job," according to Luepke.

While in Korea, the group also visited the Korean War Memorial and the Demilitarized Zone.

"The war memorial is lavish and includes the names of the U.S dead. 33,642 U.S. soldiers and 150,000 Republic of Korea troops died, as well as troops from 14 other countries," Luepke pointed out.

At the Demilitarized Zone, group members went to the negotiation shed in Panmunjom and got to walk into North Korea.

"Their soldiers were looking at us with binoculars," Luepke said.

Of the trip overall, Luepke commented, "It was a great group of people in the delegation and I hope we increased the good will between Minnesota and the Republic of Korea."

He added, "I did learn the best food we tried was bulgoi and the best drink was soju."



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Original Publication Date: October 13, 2011



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