With grain piled on the ground and meat stocks building, attention is turning to whether U.S. agriculture exports can alleviate the glut, with China in particular looming large in any conversation about trade.

With grain piled on the ground and meat stocks building, attention is turning to whether U.S. agriculture exports can alleviate the glut, with China in particular looming large in any conversation about trade.

Sorting out the upside potential from whatever diplomatic threats China might pose is a complex undertaking, even for those who know the country well.

Brady Sidwell, a graduate of Oklahoma State University’s agricultural economics program, worked in Southeast Asia for Rabobank and later for global food conglomerate, OSI, before quitting his corporate career and returning home to Northwest Oklahoma to start a grain storage, seed and brokerage business.

Now based at Kremlin, Oklahoma, he shared his experiences and views on China during a presentation on the Oklahoma State University campus.

While China’s economic growth rate has slowed from 14 percent to around 6 percent, rising consumer expenditures there are still exploding at staggering rates as the country urbanizes, he said.

“Beef in China is going to be huge. They want our American beef, I can tell you that,” he said. “And China’s going to need a lot of corn and feed grains.”

How China positions itself to meet growing internal food demand and how the U.S. farmer fits into that picture isn’t entirely clear, Sidwell said, but he was optimistic.

“The export opportunities are going to be a big contributor to the development of our ag economy here,” he said.

China, already a large producer but also an equally large consumer of food and ag products, has vast potential to modernize, Sidwell said.

Compared to the U.S. where the average farm is 430 acres and growing, Chinese farm size is still somewhere around a half-acre. But there’s currently “zero private property ownership of land in China,” which means young people have little incentive to return to the farm, Sidwell said.

While working in China, Sidwell helped OSI open several new poultry production facilities across the country. However, as foreign investors, his employer encountered grave setbacks.

In the summer of 2014, an undercover video appeared to show serious food safety violations at one of the company’s plants in Shanghai, capturing headlines around the world.

“We had 10 people arrested, nine of our facilities were shut down by the local version of the FDA and several U.S. executives had to leave the country, including me,” Sidwell recalled. “In China, there’s a saying: kill the chicken to scare the monkey. That’s what’s happened to a number of other companies, and it happened to us.”

Sidwell now believes American agribusinesses would be better served to build up their export capabilities rather than to invest directly in China’s infrastructure.

Meanwhile, China is positioning itself to obtain the food it needs to feed its huge population, and that’s where the story gets more complicated.

“China is buying more companies globally than the U.S., and don’t think this won’t start coming to the United States at a more rapid pace in the future,” Sidwell said. “We will see more activity from China looking to buy cattle operations here.”

As U.S. companies consolidate into global corporations, they become easier targets for Chinese ownership. Instead of stealing U.S. agriculture technology, something that has occurred in the past, China is now more apt to simply buy it by buying corporate entities, Sidwell said.

A couple of examples include Chinese company, Shineway, which purchased the largest U.S. hog producer, Smithfield, and ChemChina, which is now in the process of buying crop technology firm Syngenta.

“Smithfield’s sales are actually double Shineway’s, so how are they buying these much larger companies? They are all state-owned enterprises, and they’ve been able to get (federal) approval,” Sidwell said. “So the game is changing. We’re going to see a lot more of this going forward.”

Even if the U.S. had the political will to do it, rejecting Chinese ownership isn’t as easy as it sounds, he added. In Australia, for example, China got around a ban on foreign ownership of farmland by partnering with a domestic mining company to purchase the Kidman Ranch, the largest in the country, Sidwell explained.

“They are partnering (with private or publicly traded firms) to acquire assets,” he said. “The most valuable asset we have in our country is agriculture and the productivity of our farmland, so don’t think we won’t see more of that in the future.”

How Chinese ownership will change management is yet to be seen, Sidwell said. “China has a very different corporate culture, with a different emphasis on performance, so that is evolving. In the case of Smithfield, they may end up leaving the company alone and letting the company run its business as it did before,” he said.

China is a huge player on the world stage and needs more strategic consideration from U.S. policy makers and diplomatic organizations, Sidwell said.

He applauded efforts like the U.S.-China Ag and Food Partnership for facilitating cultural exchange and an exchange program OSU operates with the Chinese Ag University of Beijing that allows students to graduate with degrees from both universities. That type of outreach cultivates enormous goodwill, he said.

Inviting students to the U.S. and establishing personal relationships can provide unanticipated rewards down the road, he added. To this day, the state of Iowa benefits from friendly ties to a former Chinese student, Xi Jinping, who is now beginning his second five-year term as China’s president.

“We often rely on federal officials to talk to China at highest level. I think a better approach would be to have more state-to-state engagement, such as Oklahoma or our universities reaching out to China’s provinces and states, or between private companies here and companies in China. Agriculture often gets thrown by the wayside during large international trade expeditions,” he said.

Kristen Kuehn, who runs a cow-calf operation with her husband and works as the assistant vice president at a community bank in Coffeyville, Kansas, summed up the view of many in Sidwell’s audience that day.

“From the business side, I’m thinking we should be open minded about exporting our products to China, because it could help our market, and I want prices to go back up,” she said. “But the idea of the Chinese government having ownership of our land is a little unnerving. If they come here just to export their own beef into their own country, it doesn’t help us as farmers. We’re in unfamiliar territory, and I feel like this is something we need to continue to study carefully.”