Posted By Cindy February 1, 2013
The 2012 drought caused a little shake up in the top four corn producing states that produce more than a billion bushels a year. Normally Iowa and Illinois take the top two spots – sometimes Illinois is first but mostly it’s Iowa. Nebraska takes third and Minnesota usually comes in 4th. Last year, however, Minnesota moved up to second place because they actually increased corn production while the other three states were down due to the drought.
Encouraged by such a good year, the Minnesota corn growers are aggressively pursuing export markets and recently went on a trade mission to Taiwan. “We just want to emphasize that we had a very good crop this past year,” said Minnesota Corn Growers Association president Tom Haag, who noted that they also stressed the safety of genetically-modified corn. “We’re feeding them to our own livestock, so it’s safe for them to feed.”
Haag says they were able to meet with high level government and industry officials in Taiwan during the trade mission and would like to return the favor. “Every two years Taiwan has a mission to the U.S.,” he said. A delegation goes to Washington, D.C., to sign an agreement regarding corn purchases and then they visit corn producing states. “Two years ago when they came, they missed Minnesota as a state to visit and we were over there to convince them to come this time to show off our state,” said Haag.
Corn is Taiwan’s top agricultural import from the United States, with an annual trade value of $805 million.
Posted By Cindy December 11, 2012
An important milestone for biotechnology is nearing, which will mean the beginning of a new era for genetically modified traits.
In 2015, patents for the very first ag biotech “events,” as they are called, will be expiring and becoming “generic.” Like pharmaceutical drugs are less expensive when they can be offered in a generic form, one benefit to the expiring patents may be lower seed prices and greater opportunities for the industry. However, also like drugs, International Seed Federation (ISF) president Tim Johnson of Illinois Foundation Seeds says these “events” are highly regulated. “We do not want biotechnology to disrupt markets,” he said, noting that the seed industry has been working on a framework to ensure access to the technology while addressing international trade concerns.
The initial step was announced recently by the American Seed Trade Association (ASTA) and the Biotechnology Industry Organization (BIO) in “The Accord” – which has already been signed by most of the major companies involved in the biotech business for agriculture. “The Accord is a framework that we developed to provide a mechanism for that transition from proprietary biotech events to off-patent or generic biotech events,” says ASTA Vice President for Science and International Affairs Bernice Slutsky. “We view it as an opportunity for our broader membership to utilize events when they go off patent to provide farmers with a wide array of product.”
Interview with Bernice Slutsky
It’s amazing to think that the first biotech events aren’t even old enough to drink yet. That includes Bt corn and cotton, and Roundup Ready soybeans, as well as canola with modified oil composition and bromoxynil resistant cotton. “Biotechnology’s in its teenage years,” said Johnson, giving credit to Monsanto’s Hugh Grant for the analogy. “We’ve learned a tremendous amount over the last 15-20 years in biotechnology.”
If biotech is only a teenager, it’s achieved Justin Bieber-like popularity in that time. Between 90 and 95% of the U.S. canola, corn, cotton and soybean crops are genetically modified today – up from zero in 1994, when Justin Bieber was born.
“It’s important for us to find pathways that respect all technologies and all genetics to move forward on behalf of society,” Johnson says. “The accord lays that foundation down for us.”
Interview with Tim Johnson
Find out more about The Accord at agaccord.org.
Posted By Cindy October 30, 2012
Grain buyers from around the world at the recent 2012 Export Exchange had the opportunity to hear directly from U.S. farmers themselves about the impact of the drought on the 2012 crop through a producer panel during the opening general session. Among the panelists was Ron Gray, an Illinois farmer and Secretary/Treasurer of the US Grains Council.
Gray related how this season got off to a great start but quickly went downhill due to lack of rainfall, resulting in a severely diminished corn crop. “Our farm probably averaged 50 bushels an acre, which is approximately 1/3 of our normal production. The rainfall did come later and the soybean crop is a fairly good crop, but the corn crop was devastated,” Gray said.
However, Gray notes that “hope springs eternal in the farm community” and farmers are forging ahead with optimism in 2013. “That will mean it’s not 2012 anymore and that will be a good thing,” he said, pointing out that most farmers who had crop insurance this year will be in good shape for next season.
His take home message for international grain buyers was that U.S. corn and distillers grains will still be available for the export market. “We do have quality product available,” he said.
Listen to Jamie Johansen interview Ron at the Export Exchange: Ron Gray Interview
You can find photos from this years Export Exchange here: 2012 Export Exchange
Posted By Cindy October 26, 2012
More than 200 international buyers and end-users were in Minneapolis earlier this week to meet with grain suppliers and to hear from industry and government leaders about prospects for U.S. export capacity, particularly in light of this year’s drought.
“What we’re telling customers around the world is how the U.S. producers will be there for them,” said Tom Sleight, President & CEO of the U.S. Grains Council, which sponsored the 2012 Export Exchange with the Renewable Fuels Association. “The US farmers will be there for them now and in the future. Yes, we have droughts, that’s a problem we have, but for the future the U.S. has always responded to production challenges with more acres, greater production. Our message to the international community is that the US farmer is there in the international market for keeps.”
Listen to an interview with Sleight here: USGC President Tom Sleight
The Export Exchange focused heavily on exports of the ethanol co-product distillers dried grains (DDGS), which have increased substantially in recent years. RFA vice president of research and analysis Geoff Cooper addressed concerns that a waiver of the Renewable Fuels Standard could impact the supply of DDGS, quoting one study that estimated a waiver might reduce ethanol production by about 3% or 500 million gallons. “If a waiver was granted, you might see distillers grains prices increase about six percent commensurate with that 500 million gallon reduction,” he said.
However, Cooper says they expect a waiver will only reduce corn prices by about four cents a bushel. “We believe that a waiver of the RFS is completely unnecessary and we do not believe that it would noticeably impact corn prices or availability in the current marketing year,” he said. “The markets are already adjusting and there is no evidence that a waiver will provide any additional relief.”
Listen to Geoff’s comments here: Geoff Cooper Comments
At the conclusion of the Export Exchange conference, teams of international grain buyers fanned out across America, from Ohio to Washington State, and Minnesota to Louisiana to gain further first hand information about the current U.S. corn crop and build relationships leading to future sales. Teams from Saudi Arabia, Egypt, Turkey, Mexico and Taiwan got a head start, visiting U.S. farms, agribusinesses, and export terminals before heading to Minneapolis. This week after the conference, a Japanese team headed to Iowa and Minnesota, a European team went to Nebraska and a Chinese team had visits scheduled in Ohio and Louisiana.
You can find photos from this years Export Exchange here: 2012 Export Exchange
Posted By Cindy December 22, 2011
There’s a hot new craze called the “Ethanol Shuffle” sweeping seaports from Sao Paulo to Los Angeles as tankers carrying Brazilian sugarcane ethanol bound for California pass those carrying corn ethanol bound for Brazil.
Renewable Fuels Association (RFA) Vice President of Research and Analysis Geoff Cooper wrote about the “Ethanol Shuffle” last week on the RFA E-xchange Blog. Basically, we are shuffling sugarcane ethanol from Brazil to California to meet that state’s Low Carbon Fuels Standard (LCFS) – while at the same time, Brazil is importing lower priced corn ethanol from the United States to make up for not only the ethanol it is exporting to California, but the shortfall that country has experienced in ethanol production recently.
So, that’s how the “Ethanol Shuffle” works. California imports sugarcane ethanol from Brazil rather than corn ethanol from Nebraska or Kansas; and in turn, corn ethanol from the Midwest travels to Houston or Galveston via rail, then is shipped to Brazil via tanker to “backfill” the volumes they sent to the U.S. Picture the irony of a tanker full of U.S. corn ethanol bound for Brazil passing a tanker full of cane ethanol bound for Los Angeles or Miami along a Caribbean shipping route.
This is more than ironic, it’s just plain ignorant. First of all, sugarcane ethanol costs more than corn ethanol. According to Cooper, the ethanol California has been importing from Brazil has been an average of $1.56 per gallon MORE than corn ethanol from the Midwest. “As far as E10 goes, that’s about a 16 cent per gallon differential,” said Cooper.
The reason California prefers sugarcane ethanol over corn is because they claim it is better for the environment, a claim which can be disputed, depending on how the life cycle analysis is determined (see previous post). But, even if sugarcane ethanol actually does have a better carbon footprint than corn ethanol, that advantage is lost in the transportation shuffle. “If we were serving the California market with corn ethanol from Nebraska and the Brazilians were satisfying their own demands with their own fuel, the emissions related with moving that fuel are about half of what we’re seeing with this shuffling dynamic,” said Cooper.
Listen to an interview with Cooper about the Ethanol Shuffle here: Geoff Cooper on the Ethanol Shuffle
Posted By Cindy November 17, 2011
One of the busiest booths at the National Association of Farm Broadcasting Trade Talk last week was the National Corn Growers Association (NCGA), where president Garry Niemeyer of Illinois and first vice president Pam Johnson of Iowa spent the day doing interviews with broadcasters from all over the country.
Among the topics of interest were farm policy, this year’s crop, the American Ethanol partnership with NASCAR, USFRA, exports and atrazine. I hit on just about all of those subjects during my interview with Garry. Here’s some of his comments:
Farm Bill – “Passing farm bills usually takes about 15 months, and ironically, this one – if it happens – will be one of the quickest ever in history.”
Corn Crop – “All the adversity we’ve had, and here we are with the 4th largest corn crop. I’m thoroughly amazed.”
USFRA - “We’ve been laying a lot of the ground work here to get the message out to defend agriculture. We have everybody working together on the same page for the first time, telling our story.”
Trade – “These three free trade agreements give us the impetus to move forward to improve our infrastructure – locks and dams on the Mississippi and Illinois Rivers.”
American Ethanol – “We have been going back over the advertising and we’re at 71% acceptance, that’s with 75 million fans throughout the United States.”
Atrazine – “It’s been a stalwart, it works, it’s inexpensive, it keeps the price of food affordable for the American public.”
Listen to my interview with Garry here: NCGA president Garry Niemeyer
Posted By Cindy October 26, 2011
It took over four years, but free trade agreements with Korea, Colombia, and Panama have finally become law.
Now it’s time to play catch up to gain market share lost due to the slowness in getting those agreements ratified. “Earlier this year, NCGA provided testimony to the Senate Finance Committee citing Panama as an example of lost market share,” says National Corn Growers Association president and Illinois farmer Garry Niemeyer. “Corn exports to the country peaked in 2008 and have since dropped 20 percent. This market erosion was due in part to a lack of progress on the Panama FTA. As a farmer, it has been frustrating to see other nations achieve access to markets over U.S. corn and corn products.”
Colombia has been importing more corn from Argentina, Brazil and Paraguay because of an import duty preference. From marketing year 2007-08 through 2009-10, U.S. corn exports to Colombia dropped 78 million bushels, an estimated loss of $475 million. Under the Colombian FTA, U.S. corn producers gain immediate access to the Colombian market for 2.1 million metric tons of corn at zero percent duty.
The new agreement with Panama eliminates 50 percent of tariffs immediately and is estimated to mean a $46 million gain in U.S. agriculture exports to that country. The Colombia agreement will bring a $370 million gain in agriculture exports and will eliminate 80 percent of tariffs, and the Korea agreement could mean a $1.9 billion gain for U.S. agriculture exports by eliminating two-thirds of tariffs immediately. Under the Korea FTA, imports of U.S. corn for feed and distillers grains are guaranteed to enter duty free immediately.
What this means in a word is jobs. “Farm exports help support more than 1 million American jobs, said Agricultural Secretary Tom Vilsack upon the signing of the FTAs. “These three agreements will increase farm exports by an additional $2.3 billion—supporting nearly 20,000 American jobs—by eliminating tariffs, removing barriers to trade and leveling the playing field for U.S. producers.”
American Farm Bureau estimates that the trade agreements will create more than 22,500 jobs when fully executed. Now that’s a real stimulus for the economy. Let’s get back in the game and play catch up.
Posted By Cindy October 18, 2011
By all accounts, China is producing a record amount of corn this season, but still not enough to meet their domestic demand, which means they are also expected to import a record amount of corn.
According to the latest USDA supply-demand forecast, corn production for China this year was increase 4.0 million tons to a record 182.0 million tons. That figure is supported by 2011 weather data, information from crop tours, and early forecasts by officials in China. The U.S. Grains Council after its annual China Corn Harvest Tour earlier this month came up with a lower figure of 167 million metric tons (6.6 billion bushels), which is still a bumper crop. That was calculated on the basis of a projected corn harvest area of 30.9 million hectares (76.35 million acres), with a yield of about 85.9 bushels per acre – not impressive compared to the U.S., but pretty good for them.
“The 2011 corn crop I witnessed in China was far more impressive than I expected,” said Don Hutchens, Nebraska Corn Board executive director who participated in the USGC tour. “They have little, if any, crop loss and average yields are expected to be in the mid 80 bushel per acre range.”
However, all that corn is still expected to be insufficient to meet China’s demands. USGC expects China will need to import 5-10 million tons of corn for the 2011/12 season, a significantly more than USDA’s estimate of 2.68 million tons.
“With the fastest-growing middle class in the world, China has a great opportunity to enhance its food security through trade. That translates into a growing opportunity for U.S. producers over the next several years,” said Dr. Wendell Shauman, USGC chairman.
As recently as 2002/2003, China exported nearly 600 million bushels of corn. Exports then began to decline, and China was a net importer in 2009/2010 and 2010/2011.
Read more about the USGC China Tour and see photos here.
Posted By Cathryn May 27, 2011
The majority of average Americans are still painfully cognizant of the recession’s impact upon their lives. With high levels of unemployment and little disposable income, regular Americans wonder what the government has done to bail them out. Right now, Congress has a chance to improve the lives of 22,500 people while improving the economy as a whole simply by passing stalled trade agreements with Korea, Colombia and Panama.
The U.S. Department of Agriculture estimates that passage of all three FTAs would result in 22,500 new jobs in that sector alone. While this would not return unemployment levels to their pre-crisis lows, it would drastically, immediately change the lives of both the 22,500 hired as well as the approximately 67,500 people who depend upon them. By opening these markets, Congress would directly improve the financial, physical and emotional well-being of 90,000 Americans.
Albeit in a less dramatic manner, the passage of these trade agreements benefits the entire nation. The American Farm Bureau estimates passage of these agreements would generate an additional 2.5 billion dollars in the U.S. economy through agricultural trade alone. If Congress is willing to fight tooth and nail over cutting a few billion dollars from current spending, actually growing the national economy should be a high priority.
Posted By Chuck October 7, 2010
The Export Exchange 2010 is taking place in Chicago, IL. This event brings in international buyers and U.S. suppliers of DDGS and coarse grains. The attendance has met if not exceeded expectations. There are nearly 500 attendees, with about 180 of them coming from another country and there are 33 countries represented.
On hand is the President/CEO of the National Corn Growers Association, Rick Tolman. I asked Rick what he thought about the conference and its importance to the industry. Rick says it’s critically important and that the DDGS export market is one of the bright spots in the industry.
You can listen to the interview with Rick here: [audio:http://www.zimmcomm.biz/rfa/export-exchange-10-tolman.mp3]
