Corn Commentary

Morocco Corn Mission Comments

The Morocco portion of the U.S Grains Council Corn Mission has concluded and the team is now in Egypt. While in Morocco, the group toured a cattle feedlot, poultry operation and shipping port, and met with many government and agricultural representatives. Among them was Abdelali Aziz, General Director for the Moroccan Office of Cereals, who is pictured here on the right next to Wisconsin corn grower Joe Zenz.

Agwired’s Chuck Zimmerman, who has been blogging the trip, interviewed Joe when they were leaving Morocco to get his impressions about what they saw and heard as it relates to the potential for U.S. corn exports. Joe says he sees great potential in the Morocco market, but he thinks producers still have a lot to learn about production and the USGC is playing a key role in providing educational resources. In the future, Joe thinks there’s a lot of market potential with DDGs by setting up some trials to show producers how well it can perform.

Listen to Chuck’s interview with Joe here:

Chuck is also taking numerous photos on the Corn Mission and putting them in separate Flickr photo albums for each country, which can be viewed by clicking on the links below.

USGC Corn Mission In Morocco Photo Album

USGC Corn Mission In Egypt Photo Album

Growth of Grain Imports In Morocco

A team of corn growers on a mission in Morocco this week heard from Kurt Shultz, Director for the Mediterranean and Africa for the U.S. Grains Council (USGC), about the agriculture industry in Morocco and the potential it holds for U.S. grain producers.

Chuck Zimmerman, who is blogging the trip on Agwired and The Grain Board, reports that Kurt told them the USGC became involved in Morocco about 15 years ago when corn imports were low and there was a huge duty of about 75 percent. USGC formed a relationship with livestock producers and the government that has led to the reduction of those duties to about 35 percent, which has driven growth tremendously, as has an increase in poultry production.

Kurt says that the USGC helped form a poultry organization that provides members with educational materials so that it can compete on a global level. He says that investment has paid off big dividends over the years. Besides corn, he says they are seeing a growth in the imports of dried distillers grains. Kurt says that imports in Morocco could double in the next five years, especially with developments in the ruminant sector.

Listen to Chuck’s interview with Kurt here:

See photos from the trip here: USGC Corn Mission In Morocco Photo Album

Turkey Lays an Egg

Just in time for Thanksgiving, the country of Turkey dropped a big, fat egg on grain imports.

The U.S. Grains Council reports that last week, Turkey placed an unexpected ban on imports of biotech crops.

Turkey, the 27th largest export market for all U.S. goods, issued a new regulation on Oct. 26, 2009, placing additional requirements on all food and feed products containing genetically enhanced components. This new regulation essentially came without warning, according to U.S. Grains Council Regional Director in the Middle East and Subcontinent Joe O’Brien. “This ban came at us pretty much out of the blue,” he said. “This regulation impacts everything from a bag of potato chips to grains and co-products.”

The Office of the United States Trade Representative (USTR) reported on its Web site that this signifies approval of the fourth draft of a National Biosafety Law and is similar in nature to the draft reviewed last year. O’Brien said the potential impact is substantial to U.S. coarse grains and producers. For example, Turkey is the largest buyer of U.S. corn gluten feed (GCF) and the third-largest buyer of U.S. distiller’s dried grains with solubles (DDGS). Turkey imported 435,378 metric tons of CGF in 2008 and 202,422 tons in the first six months of 2009. Turkey imported 465,212 tons of U.S. DDGS in 2008 and 199,173 tons from January through August of this year. USTR reports the U.S. goods trade surplus with Turkey was $5.8 billion in 2008, an increase of $3.8 billion from 2007. USTR also notes the total value of U.S. “transgenic” crop exports to Turkey exceeded $1 billion in 2007, which are endangered depending on how this new regulation is implemented. O’Brien said one issue currently “up in the air” is the fate of the vessels currently on the water loaded with U.S. goods.

There is a good chance the regulation will be reviewed and possible reversed, but immediately after it was issued last week there was a big holiday in the country, which effectively shut down all government operations (it was Turkey Independence Day). USGC is working with USTR to get the decision changed.

Taiwan Goodwill Mission Visit Midwest

Taiwan is expected to purchase $3.5 billion in soybeans, corn and wheat from the United States over the next two years and last week Taiwanese delegations traveled around the Midwest to see their future purchases in progress and formalize agreements on the state levels. The groups visited a number of states, including Indiana, Illinois, Iowa, and Missouri and met with corn and soybean grower organizations and state officials.

In Missouri, they met with Governor Jay Nixon and representatives of the agricultural industry and signed a Letter of Intent to purchase between 303 and 413 million bushels of American corn and up to 750,000 metric tons of distillers dried grains, with a total estimated value of up to $2.37 billion.

Iowa Corn Growers Association president Don Elsbernd met with the Taiwan delegation in his state and signed the agreement with them. “As our 4th largest customer, we see this agreement as critical to our corn industry in Iowa and we think it shows their satisfaction with the product we are providing,” he said.

U.S. Corn Grower in China

National Corn Growers Association board member Guy Davenport of North Carolina has been taking part in the U.S. Grains Council’s Annual China Corn Tour this month which has already visited Northern China Plain regions of Henan, Anhui, Hebei and Shandong Provinces and is now touring the drought stricken Northeast region of China.

During a conference call from China this morning, Guy talked about what they have been seeing. “China corn farming was certainly not what I envisioned it to be,” Guy said. “They have soils that are just as good as ours, very large fields that are very comparable to our Midwest farms.” Guy says they found most farmers had just about five acres, but they were small holdings all close together, giving the impression of vast acreage for miles. They also found out that harvest is done by hand and takes a typical farmer about ten days.

As a representative for all corn growers, Guy will be reporting back to the NCGA board what he has learned in China. “I think this gives us a better perspective about how much corn can be grown in that part of the world, how efficient they are in their corn production and to what extent they use irrigation. It was truly an eye-opening experience to me.’

Cary Sifferath, USGC Senior Director in China, talked about the drought conditions in the country and high corn prices. “Those high prices have led to some opportunities for US feed grains products, specifically distillers dried grains (DDGS) products from the US ethanol industry,” Cary said. “We had roughly 8,000 metric tons of DDGS that was exported from the US into China and right now for 2009 we can easily predict 250,000 to 300,000 tons of distillers dried grains being imported by China’s feed and livestock industry, especially in the southern and coastal areas of China where DDGS has become a very competitive feed ingredient.”

Lots of photos from the tour are already posted on the USGC Flickr photo album here and commentary can be found on the USGC blog The Grain Board.

Listen to Guy Davenport’s remarks from China here:

Tom Dorr Named New CEO of Grains Council

A man with his roots in corn has been chosen to help take U.S. corn exports to the next level.

It was officially announced today that former USDA Undersecretary for Rural Development Thomas C. Dorr will serve as president and CEO of the U.S. Grains Council, effective November 16.

Before serving the USDA for seven years, Dorr was an Iowa farmer for 30 years and a member and officer of the Iowa and National Corn Growers Associations. Dorr is taking the helm of the organization as it is about to celebrate 50 years in 2010, succeeding Ken Hobbie, who has been with USGC for 33 years and served as president and CEO for the last 19 years.

Dorr says his first priority will be to work with the Council’s membership, Board of Directors, and staff to clearly define, not just the challenges, but the opportunities for international grain trade.

Chuck Zimmerman with Agwired interviewed the new CEO:

Bigger Crop Means More Exports

Iowa Corn Promotion Board past chairman Julius Schaaf is expecting to harvest one of the best corn crops ever on his farm in Randolph, Iowa. According to the USDA crop progress report this week, Iowa’s corn crop is rated 75 percent good to excellent, with 76 percent dented, up 23 percent from last week, and eight percent of the crop mature.

The near record crop forecast this year will mean a 100 million bushel increase in exports and Schaaf, who also serves on the board of directors for the U.S. Grains Council, says it proves that farmers are more than capable of supplying the necessary feed grains both domestically and abroad. “We produce more on fewer acres because we deploy sound science when making our planting decisions. Because of biotechnology we can meet all demands domestically and around the world,” Schaaf says.

The corn crop continues to make slow but sure progress - still running well behind schedule but the near ideal weather is helping the crop along.

Meat Comes from Corn

Corn growers and meat exporters have teamed up to remind consumers in Asia that the best tasting beef and pork is made from corn.

A campaign sponsored by the Missouri Corn Merchandising Council and the U.S. Meat Export Federation has produced these colorful posters to be used in retail campaigns and special culinary events.

“While consumers in Japan always say that safety is a top priority, we have found that they actually respond more positively to messages that convey quality and wholesomeness,” said USMEF Japan Director Gregory Hanes. “This type of image helps us subtly address consumers’ safety concerns, but do so in a more positive and appealing manner by stressing the quality of corn-fed beef and pork.”

Earlier this summer, a delegation of producers representing the Iowa Beef Industry Council, the Iowa Corn Promotion Board, the Nebraska Beef Council and the Nebraska Corn Board went to Tokyo on a trade mission organized by USMEF to promote U.S. corn-fed beef in both Japan and South Korea.

Alan Tiemann, a corn and soybean farmer from Seward, Nebraska was on that mission and says that USMEF’s promotional efforts are paying off in Japan. “In the grocery stores, markets and restaurants where USMEF has promotions going on, U.S. beef is very well-received,” he said. “We see a lot of meat going off the shelves where they are doing promotions, and it’s been fun to watch those programs produce results.”

The bad news is that between the overall economy and low prices in key export markets, U.S. beef and pork exports have been down this year. Add in the H1N1 problem and pork exports were down about 30 percent in June of 2009 compared with June 2008.

The National Pork Producers Council today urged the USDA to help U.S. pork producers to help recover from the economic crisis that has caused them to lose an average of more than $21 on each hog marketed for the past two years. Among other things, NPPC wants USDA to work with the U.S. Trade Representative to open export markets to U.S. pork. Several countries, including China, continue to impose unwarranted bans on U.S. pork because of the H1N1 flu.

Rest assured that corn growers will continue to do what they can to help open markets and increase meat exports as well.

Corn Growers at Grains Council Meeting

Ran into a few corn growers out in San Diego today at the U.S. Grains Council’s 49th Annual Board of Delegates Meeting.

I got a chance to chat for a few minutes with National Corn Growers Association First Vice President Darrin Ihnen of South Dakota about a number of topics, including how NCGA works with USGC. “We work very well together,” Darrin said. “The Grains Council is kind of the export arm of the corn industry and so from the National Corn Growers perspective, we need our sister organization to handle our exports. We do export roughly 15-20 percent of our corn crop, so that’s a very important market for us.”

He says the export outlook is not as good as it was a year ago because the world economy and the recession have taken their toll and growers are looking at producing another huge crop this year. “I farm in southeast South Dakota and our crop looks as good or better than ever, we’ve got a tremendous crop coming on” Darrin said. “We gotta find a home for all this corn.”

We also talked about the challenges facing livestock producers - which includes Darrin - and what to do about those pesky activists.

Listen to Darrin’s interview here:

Distillers Grains Exports Nearly Double

The Renewable Fuels Association this week published a report on the export of distillers grains that demonstrates the growing popularity of this key ethanol coproduct. According to the RFA, citing U.S. Department of Agriculture data, U.S. distillers grains exports nearly doubled last year, rising 91 percent — from 2.36 million metric tons (mmt) in 2007 to 4.51 mmt in 2008.

In its report, the RFA maks a good point:

Considering that more than half of all corn is fed to livestock, increasing the use of distillers grains domestically and internationally reduces the need for increased acres for both corn and soybean production. This factor is critically important to the current debate surrounding the land use change impacts of America’s renewable fuels industry. Properly accounting for the use of distillers grains would dramatically lower any calculated land use change impact for grain-based ethanol.

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