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Serving: NE

International trade crucial to producer bottom line

TAGS: Trade
Courtesy of Adam Grabenstein LEAD Class 37 graduate, Adam Grabenstein, Farnam,
TOUTING TRADE: According to LEAD Class 37 graduate Adam Grabenstein of Farnam, Neb., international trade for U.S. grain and livestock products is crucial for the profitability of Nebraska farmers and ranchers.
LEAD Comment: Farmers can’t capture the most value for their products without reaching consumers beyond U.S. borders.

When I finished harvest last fall, it looked as though corn prices were going to skid into a long, dark winter.

After all, Nebraska raised its biggest corn crop on record in 2020. People were stuck at home because of the COVID-19 pandemic. They weren’t taking road trips or going to restaurants. It felt like the 2021 planting season was setting up to be pretty gloomy.

China connection

Then, corn prices started rising into the new year and eventually broke multiyear highs. How could that happen? The answer is that demand for our products was coming from outside the U.S.

We know now that China bought more than 60 million bushels of corn in December and also placed orders for U.S. ethanol. Since China didn’t buy much corn the year before, this was a big deal to the market.

As a LEAD program graduate, it helped remind me how important international trade is to Nebraska’s farmers and ranchers. LEAD Class 37 took our international trip to Germany, Poland, the Netherlands and Belgium. These probably aren’t countries you’d think would be major destinations for ag products.

But the Netherlands is the fifth-largest market for U.S. ethanol and a top 10 market for Nebraska beef. We know other countries — such as Mexico, Canada and Japan — are critical markets for U.S. corn, beef and pork.

Mexico accounted for 97% of our corn exports last year. We shipped $4.6 million of ethanol to Canada. Japan bought almost $600 million of Nebraska beef and pork products.

Red meat exports have been the fastest-growing category of corn use since 2015. The U.S. Meat Export Federation says red meat exports account for at least 46 cents of every bushel sold — and that study was with corn below $4 per bushel.

Distillers grains

Distillers grains are a really important part of our feedlot diets here. Other livestock feeders around the world have found they can be a good part of their rations, too. While Mexico remains our largest market for distillers grains, we’re seeing the most growth in Southeast Asia.

The U.S. Grains Council says Southeast Asia accounts for about 35% of our shipments — and some of those countries might only be using a quarter of their potential. Distillers grains have found a home in poultry and aquaculture rations there, with a lot of interest in the emerging high-protein products.

Our international partners have already helped us achieve success, as shown by a 97% market share for U.S. distillers grains in Taiwan and a growth of 46% in distillers grains exports to Thailand.

While we can continue to sell our products to Nebraskans and the rest of the country, we can’t capture the most value without reaching consumers beyond our borders. Achieving true, free trade should be our ultimate goal. That way markets can’t just disappear, like we’ve experienced with ethanol to Brazil or distillers grains to China.

Nebraska farmers are the best at what we do. We can grow corn more efficiently and sustainably than anywhere else in the world. Our grain-fed beef is known by chefs in restaurants all over the world. We should continue to remind ourselves how important those customers are to our farms and ranches here at home.

Grabenstein is a farmer from Farnam, District 5 director for the Nebraska Corn Board and a graduate of LEAD Class 37.

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