Missouri Correspondent
ST. LOUIS, Mo. — The United States exported about 4.75 billion bushels of corn, sorghum and barley from September 2017-August 2018, a 6 percent increase over the record-setting marketing year of 2016/17.
The U.S. Grains Council (USGC) tabulates the feed grain export totals using U.S. trade data. Totals include feed grain equivalents for beef, poultry and pork exports, as well as equivalents for grain used in exported ethanol and its co-products, like distillers dried grains with solubles (DDGS).
Export strength persisted throughout the marketing year. “For U.S. grain producers, our 2017/18 export performance was outstanding and above recently revised expectations due to particularly strong shipments in the second half of the marketing year,” or March-August 2018, said Mike Dwyer, USGC chief economist.
That second-half export bump has been counteracted by prospects of a bumper new crop in recent months, even as global buyers continue buying U.S. corn.
“When you have a very large harvest, you tend to have a price depression,” said Michael Langemeier, Purdue University agricultural economist. For producers in the region, that translates to downward price pressure and a wider basis.
Continued strength in exports could mean pricing opportunities for producers who are able to store new-crop corn, as well as soybeans, he said. “If it looks like exports will stay up, that is usually a favorable scenario for on-farm storage.”
Producers should always consider income implications for selling this year’s crop in subsequent tax years, according to Langemeier.
Mexico continues to be the major market for U.S. corn, DDGS and barley. Trade with Mexico is equivalent to almost 1 billion bushels of corn, according to USGC. Japan, with both significant grain and meat demand, is the second-largest market for corn and sorghum in all forms. South Korea, the third-largest corn buyer, is also the second-largest buyer of U.S. DDGS.
The U.S. Trade Representative’s Office recently announced trade deals with Mexico, Canada and South Korea. USTR chief Robert Lighthizer announced on Oct. 16 his intent to begin talks with Japan, the European Union and the United Kingdom.
Trade disputes with China had some impact on corn and sorghum products there, though not to the extent as felt with soybeans. U.S. DDGS exports to China dropped in the last marketing year. Sorghum exports also declined, although China was still the leading destination for U.S. production, according to USGC.
Corn growers, challenged by prices remaining near or below many cost-of-production estimates, will likely benefit as corn export levels remain relatively high. Recent export shipment reports are ahead of pace to meet export sales projected by USDA for 2018/19, said Dan O’Brien of Kansas State University.
“It does set the tone for us to wonder if we’re as low as we’re going to go for this fall,” in terms of grain prices, he mused. “Now I think we’re setting our sights on asking the question of where might demand take us as we move off into November, December and January.”
Ethanol trade and domestic ethanol sales are helping boost all-forms corn trade. “We are the world’s low-cost ethanol producer, which has helped the United States capture more than 65 percent of global ethanol exports in the 2017/2018 marketing year,” said Dwyer.
Ethanol trade has remained steady as the U.S. maintains a reputation for low-cost production. That continues a reliable market for a certain volume of U.S. corn each year, according to Langemeier. “Ethanol volumes seem to have pretty much leveled out recently,” he observed.
