August 19, 2014
While trade is still used as a bargaining chip among nations, its impact on grain markets has been lessened somewhat through U.S. corn farmers' focus on adding value domestically through livestock production, biofuels and industrial uses for corn. That creates greater demand across a variety of sectors, says Alan Tiemann of Seward.
Tiemann is a member of the Nebraska Corn Board and secretary of the U.S. Grains Council.
But exports remain an important component of the U.S. corn market portfolio. "The equivalent of one in six rows of corn in Nebraska is exported," says Tiemann. "There is no question that corn prices are enhanced by the demand in the international marketplace."
Through their checkoff, Nebraska corn farmers support the efforts of the U.S. Grains Council in building demand for corn around the world.
Global competition in corn exports has grown significantly over the past four years, driving the U.S. share of the market down to about 50%. Since 1990, the amount of corn grown outside the U.S. has increased from 11 billion bushels to nearly 22 billion bushels in 2012.
"Brazil and Argentina are formidable competitors, but other areas such as the Black Sea region, Paraguay, South Africa, Thailand and China are emerging as well," Tiemann adds. "We're using more and more corn domestically, which is creating opportunity for other nations to fill the void. That's why it's even more important that we redouble our efforts to maintain and build international markets for our product."
As emerging nations become more prosperous, their appetite for protein—poultry, pork and beef—grows as well. USGC is working around the world to help farmers grow their flocks and herds, which in turn increases demand for feed grains such as corn. From water buffalo in Morocco to turkeys in Canada to pigs in South Korea, USGC has been extremely successful in demonstrating the outstanding feed value of American feed grains.
As the ethanol industry has grown in Nebraska and the U.S., so has the supply of distillers grains, a high protein value animal feed that is a co-product of ethanol production. As a result, USGC has also begun building international markets for dried distillers grains. One big example is China, which four years ago imported no DDGS, but today is the number one customer in the world for DDGS from the U.S. Mexico ranks second.
"Instead of simply shipping raw corn overseas, this ethanol byproduct adds value here at home," Tiemann says. "Exports of DDGS help build markets for Nebraska ethanol producers as well, and that helps create profit opportunities to keep these plants running and energizing our rural economy."
Tiemann says it's critical that Nebraska corn farmers continue to invest in international market development. "We're going to have more than 9 billion people to feed by 2050, and Nebraska can and should play a big part in meeting that demand," he says. "By encouraging fair trade and staying in front of international customers, we can make sure we feed the world—and create economic vitality right here in Nebraska."
Source: U.S. Grains Council
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