Corn Commentary

DDGS Supply Demand Picture

2014-export-exchangeHundreds of international buyers from dozens of countries heard about the supply-demand picture for the ethanol co-product distillers grains (DDGS) this week at the 2014 Export Exchange.

“We have ample supplies of distillers grains coming from the U.S. ethanol industry but the demand picture is somewhat murky,” says Renewable Fuels Association (RFA) Senior Vice President Geoff Cooper. “That murkiness has to do with trade barriers and interruptions in the global trade of distillers grains that we’re seeing.”

Patriot Renewable Fuels DDGsCooper says the U.S. is expected to produce 36-37 million metric tons of DDGS in the current marketing year, but one of the biggest trade disruptions in the market is being created by China’s demand that shipments of distillers grains must be certified to be free of the MIR162 biotech corn trait. “That kind of certification is not possible,” said Cooper. “So, we expect exports to China to be significantly curtailed or even halted until this situation is resolved.”

Last year, half of the U.S. distillers grains exports went to China, but Cooper says there are other countries increasing imports. “We are seeing continued growth of distillers grains exports to other parts of Asia outside of China,” he said, adding that Mexico is increasing imports and countries such as Egypt and Turkey are also growing markets. Interview with RFA Senior VP Geoff Cooper at 2014 Export Exchange

Grains Council Helps Exports Rebound

usgcWith a record corn crop being harvested, exports are more important than ever. The United States exported more than 11 percent of the U.S. corn supply to over 100 countries in the 2013/2014 marketing year, which U.S. Grains Council president and CEO Tom Sleight says is a nice recovery from lost market share after the drought of 2012.

“Now it’s time to really dig in and dig in hard … recoup our market share, recoup our sales,” said Sleight. “With an abundant, competitively priced crop, plus our reputation for quality and contract and deliveries, we’ve been able to get back where we needed to be.”

U.S. corn exports to Japan enjoyed a powerful rebound in the just completed marketing year, with USDA reporting exports and outstanding sales of 11.8 million metric tons (465 million bushels). “In Japan, we’ve had a 90 plus percent market share since April,” said Sleight.

usgc-sleightHeading into the 2014/2015 marketing year, the Council has more plans to develop new markets for U.S. corn. “We have nine offices around the world, spending about 40% of our resources in Asia, another 40% in the western hemisphere,” Sleight said. “The other 20% in the middle part of the world – the Middle East, north Africa, very key market for us.” With hostilities and Ebola to contend with in those areas, Sleight said they are being mindful of safety and security issues.

In this interview, Sleight also talks about the upcoming Export Exchange, global biotechnology education challenges, the situation in China, and the potential for current trade negotiations to boost grain exports. Interview with Tom Sleight, US Grains Council

Increasing DDGS Exports

2014-export-exchangeComing up October 20-22 in Seattle is the 2014 Export Exchange sponsored by the Renewable Fuels Association and the U-S Grains Council to bring international coarse grain buyers and U.S. suppliers together, with a particular focus on the ethanol co-product distillers grains for livestock feed. More than 180 international buyers and end-users are expected to meet and build relationships with more than 300 domestic suppliers in attendance at this event held every two years.

RFA president and CEO Bob Dinneen says the Export Exchange is more important than ever right now. “We export about 25% of our distiller’s feed and in the past more than half of that has gone to China,” said Dinneen. “China is making export of distiller’s feed to that country today a bit more challenging today with their concerns about GMO.”

Expressing his opinion that China’s concerns are primarily about price and politics, Dinneen said this year’s Export Exchange will include an educational session on biotechnology, “but more importantly we’ll have buyers from more than 33 other countries” to build markets beyond China.

Registration is still open for the event and USGC Industry Relations Director Lyndsey Erb-Sharkey talks about what is planned for this year’s Export Exchange in this interview. Interview with Lyndsey Erb-Sharkey

Potential for Ethanol Exports to China

A trade mission to China last week revealed great potential for U.S. ethanol producers.

china1The USDA-led a mission to promote U.S. biofuels and agricultural product exports was part of President Obama’s “Made in Rural America” export and investment initiative, designed to help rural businesses and leaders take advantage of new investment opportunities and access new customers and markets abroad. Leaders from state departments of agriculture in Colorado, Iowa, Kansas, Minnesota, North Dakota, Oklahoma, Pennsylvania and Washington participated in the mission, along with representatives from 28 U.S. biofuels and agriculture companies and organizations.

Growth Energy Chief Economist Jim Miller, who formerly served as USDA Under Secretary for Farm and Foreign Agricultural Services, participated in the trip led by the current under secretary Michael Scuse. “Our goal was really to gauge what are the intermediate term opportunities to export ethanol to China, as well as to discuss the situation concerning our exports of distillers dried grains to China, which happens to be our largest export market for that commodity,” said Miller during a telephone press conference Tuesday regarding the mission.

National Farmers Union president Roger Johnson says the trip revealed that the potential ethanol export market in China is substantial. “Demand for ethanol is high, and domestic production meets less than half of their projected ethanol needs,” said Johnson. “However, in order to meet this demand, it is clear that we must first resolve some government regulatory and environmental issues.” Johnson added that there are issues with exports of the ethanol co-product distillers grains (DDGs) to China. “DDG exports to China will likely continue to be difficult and sporadic until China modifies its biotech approval process so it is comparable to that of the rest of the world,” he said.

Kelly Davis of the Renewable Fuels Association (RFA) was also on the trip. Listen to their observations here: China Mission Press Conference Opening Remarks

Record Distillers Grains Exports in 2013

Patriot Renewable Fuels DDGsU.S. exports of the ethanol co-product distillers grains set a new record last year with China continuing to lead the demand.

According to the latest government statistics, exports of distillers dried grains with solubles (DDGS) totaled a record 9.7 million metric tons (mmt) last year, up 31% from 2012 and well above the previous record of 9.0 mmt set in 2010. China was responsible for nearly half of the total – 46%, with Mexico and Canada a distant second and third.

Credit for driving the demand for DDGS exports can be given to the U.S. Grains Council and the Renewable Fuels Association, which sponsor the Export Exchange every two years to bring buyers and sellers of coarse grains and ethanol co-products together. The event this year will be held October 20-22 in Seattle.

Meanwhile, U.S. exports of ethanol were down a bit from the previous year, but at 621.5 million that’s still the third-highest annual total on record. Canada was by far the leading export market for the year, receiving 52% of the total. The Philippines ranked second, followed by Brazil, the United Arab Emirates, and Mexico. Meanwhile, U.S. ethanol imports were down 27% from 2012, making the United States a net exporter of 226.3 mg in 2013, roughly a 24% increase over 2012 net exports.

Exports of both DDGS and ethanol from the United States are expected to continue to increase to meet demand, which could make up the difference if the EPA follows through on its proposal to lower the RFS.

Corn Growers Strong at Farm Progress Show

fps13-ncgaThe National Corn Growers Association (NCGA) is out in full force at the 2013 Farm Progress Show, with both president Pam Johnson of Iowa and First Vice President Martin Barbre in his home state of Illinois on site.

They were doing interviews with all the farm media at the show, talking about a variety of topics. We chatted about the condition of the crop – which Pam says is “coming along” in Iowa and Martin says is “better than we’ve ever seen” in southern Illinois.

The farm bill is still a big concern for the corn growers and Pam says they are “not waiting very patiently anymore” for Congress to get the job done. They are strongly encouraging all members to contact their representatives during this August recess and urge them to make some real progress during the few days they are in session during September.

When it comes to membership, NCGA is now over 40,000 strong, which is a lot of voices that can make a big difference. “Our association has shown membership growth every year for the past 15 years,” Martin said. “Makes us feel like we’re really doing our job, really promoting the policy that the members create and making it happen.”

Pam and Martin also talk about the Renewable Fuel Standard, trade, WRDA and biotechnology in this interview.Interview with Pam Johnson and Martin Barbre

Japan Ready to Beef Up Again

neb-corn-japanA group of Nebraska corn farmers and cattlemen are convinced after a recent trade mission that Japan will soon return to its traditional spot as the number one export customer for U.S. beef.

The Nebraska Corn Board funded the participation of five Nebraska producers on the Japan mission, which centered on Tokyo and the Sendai region. They are pictured here next to an ad for U.S. beef in Tokyo Station, one of the city’s busiest metro stops. Left to right, the team consisted of Tim Scheer of St. Paul (Nebraska Corn Board), Dale Spencer of Brewster (Nebraska Cattlemen), Doug Parde of Sterling (Nebraska Cattlemen), Kyle Cantrell of Anselmo (Nebraska Corn Growers Association) and Mark Jagels of Davenport (Nebraska Corn Board and chair-elect of the U.S. Meat Export Federation).

Earlier this year, Japan finally agreed to ease up on import restrictions on U.S. beef implemented after an isolated case of bovine spongiform encephalopathy (BSE) in 2003. “During that time, Australia and New Zealand have been very aggressive in promoting their product into Japan with considerable success,” Jagels said. “We need to reintroduce Japanese consumers to the robust flavor of American corn-fed beef—and teach them ways to prepare and enjoy convenient and delicious dishes featuring U.S. beef.”

Already, sales of U.S. beef into Japan are on track to exceed $1 billion in value this year, up from virtually zero in 2006.

Read more from the Nebraska Corn Board and be sure to check out the mission blog for more insights and photos.

Importance of Biotechnology to the World

As an Iowa farmer, National Corn Growers Association President Pam Johnson knows how important biotechnology is for American farmers and this week she was on the road trying to get the message out that it is vital to the world as a whole.

“The continued use of biotechnology in agriculture is a key component to food security,” Johnson said during the American Association for the Advancement of Science’s Charles Valentine Riley Memorial Lecture in New York on Tuesday. “However, we need to greatly improve the public’s acceptance of biotechnology. Agriculture needs to lead the conversation on this important topic and provide education on the advancements of the industry. Consumers should be able to make decisions based on science and facts, not fearmongering.”

pam-ttipJohnson followed up that appearance by provided policy recommendations for the U.S. Trade Representative during a House Committee on Small Business hearing in Washington on Wednesday.

“For NCGA members, the biggest challenge is the approval of corn and corn products that are derived through biotechnology,” she said. “Unjustified regulations are costing family farmers millions in lost sales to the EU and could result in even great losses of U.S. exports if they are adopted by other countries.” She pointed out that 88% of the corn grown in the United States is derived from biotechnology, as it is in Brazil and Argentina.

The main point Johnson said the corn growers want to get across to USTR in these trade negotiations is that any agreement must be comprehensive and address any sanitary-phytosanitary barriers to agricultural trade up front. That means, she says, “nothing is agreed to until everything is agreed to.”

Listen to or download Pam’s testimony and answers to questions from lawmakers: NCGA president Pam Johnson Testimony

Minnesota Corn Growers Court Taiwan

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.

mn-corn-taiwanEncouraged 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.

Biotech Anniversary Triggering Accord

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.



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