With an influx in grain production, international trade is taking center stage. Missouri Corn Growers Association is ramping up marketing efforts with its longstanding partners at the U.S. Grains Council and buyers across the globe.
The organization says farmers should be aware of four important developments in the trade arena:
1. Feed grain is breaking a record. Exports of grain in all forms increased 17% from the same time period a year ago. With one month remaining in the 2016-17 marketing year, U.S. feed grain exports in all forms are expected to hit a new high, thanks in part to the extensive marketing efforts by USGC and partners. Year-over-year gains for corn and the grain equivalent of ethanol bolstered the record, with corn exports totaling 2.15 billion bushels during the first 11 months of the marketing year. This is a 29% jump and the best performance for U.S. corn equivalent exports since 2007-08.
2. Vietnam ends its suspension of U.S. DDGS. In early September, it was announced that Vietnam would lift its suspension of U.S. distillers dried grains with solubles (DDGS) imports and ease fumigation requirements for U.S. corn and wheat imports. The announcement follows many months of work to resolve the suspension, which was implemented late last year. U.S. Grains Council CEO Tom Sleight noted in a statement that Vietnam is one of the fastest-growing feed markets in the world
3. The U.S.-Korea Free Trade Agreement is at risk. Talk of U.S. withdrawal from the U.S.-Korea Free Trade Agreement spurred action by agriculture entities, which noted such action would lead to substantial losses in sales to the third-largest corn customer for the U.S. South Korea is also the third-largest importer of U.S. DDGS this marketing year, purchasing 850,000 metric tons. Following a strong response from grassroots, as well as agriculture industry, talk of withdrawal has tamed — for now.
4. Brazil imposes a tariff on U.S. ethanol. In August, Brazil imposed an immediate two-year tariff-rate quota system for ethanol imports. This tax will apply a 20% tariff to purchases of U.S. ethanol after a 158.5-million-gallon quota is met. U.S. ethanol industry supporters, including Growth Energy, the Renewable Fuels Association and U.S. Grains Council, instantly responded, calling on the U.S. government to develop an immediate response. This year alone, fuel ethanol exports to Brazil through July hit 310 million gallons. As the largest ethanol export market for American producers, this measure will have detrimental impacts for the ethanol industry and rural farm economies if it isn't reversed.
Source: Missouri Corn Growers