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United States Risks Losing Export Market to Colombia
--Canada Ratifies FTA with Colombia--

While the United States sits on the sidelines, competition for market share in Colombia heats up as U.S. competitors negotiate free trade agreements (FTA). This week, Canada ratified an FTA with Colombia and the European Union is expected to complete an agreement this summer. According to the U.S. Grains Council, the continued delay in ratifying the U.S-Colombia Trade Promotion Agreement (CTPA) is having a profound impact on U.S. agriculture.

“Despite the fact that Colombia has been the largest market for U.S. agriculture exports in South America and the third-largest market in the Western hemisphere, behind only Canada and Mexico, we have lost significant market share in just a short period,” said USGC Chairman Rick Fruth.

U.S. exports of agricultural commodities declined sharply from $1.6 billion in 2008 to $907 million in 2009, a 46 percent decline.

“This lack of an agreement cost the U.S. corn sector alone $314 million in 2009. The U.S. market share of Colombia’s feed grain imports dropped from 96 percent in 2007 to 38 percent in 2009,” said Fruth, who farms corn just outside of Holgate, Ohio. 

U.S. agricultural products continue to face a 15 percent import tariff and Colombia’s price band system which imposes a variable charge on top of the regular import duty. Meanwhile, Argentina and Brazil continue to enjoy the advantages from the MERCOSUR agreement with Colombia, facing only a 6.9 percent tariff.

“The tariff for MERCOSUR countries will be completely phased out by 2018. This will result in the United States being only a residual supplier to Colombia, at best. Ratification of the CTPA will eliminate both the import tariff and price band system, allowing a level playing field,” said Floyd Gaibler, USGC director of trade policy.

According to the American Farm Bureau Federation, a ratification of CTPA would result in U.S. agricultural export gains of more than $815 million per year at full implementation.

“The ability of the U.S. agricultural sector to remain competitive in the long-term will rely on our collective ability to supply the global markets with growing demand for feed and food products,” Gaibler said. “That can only happen if the United States endorses the trade agreements we successfully negotiate and fully reengage in negotiating bilateral, regional and multi-lateral trade agreements around the world.”

John Block, Former U.S. Secretary of Agriculture, Speaks About His Experience with the U.S. Grains Council 
When I look back at the U.S. Grains Council, they were always active in working on issues related to selling U.S. grain.

As Secretary of Agriculture, and later, when I was running a trade association, my relationship with the Council remained positive.

I was invited to travel to Ecuador and other countries in South America, to open markets and strengthen the U.S. relationship with these countries. In my opinion, farmers realize the importance of traveling down the avenue of forming relationships; however, a single farmer is not going to get much done. But, if you have an organization advocating for U.S. farmers, that’s when things get done. That is exactly what the Council does. It works for farmers.

U.S. grain exports have increased over the years. The United States is exporting at least one third of its agricultural production, even more of some grains.

The United States is efficient in producing grain. As a kid I remember when we had two horses pulling a two-row corn planter and couldn’t even reach a 100 bushel yield. Today, the horses are gone, and we have tractors, machinery, big combines, and now we can pick and shell 100 bushels of corn in seven minutes.

With high production comes the need for markets, and that’s where the Council comes in; helping to develop these markets.

As the United States expanded production, its relationship with other countries has changed. While historically positive relationships exist, some have fallen into disrepair and the United States has dealt with its fair share of controversy.

The United States and the Council must continue to adapt to change and find appropriate export markets.

The Council still has a strong team, working directly with the U.S. Department of Agriculture, especially the export wing and the Foreign Agricultural Service, to straighten out any issues that arise.

As Secretary of Agriculture, when I went to my first cabinet meeting with President Reagan, he asked the members of the cabinet if we had any priorities. I quickly said, “Mr. President, you promised in your campaign that you would lift the Soviet Grain embargo. We had sold a lot of grain to the Soviet Union, and would like to continue to do so.”

About one year later, I signed a long-term grain agreement with the Soviet Union, solidifying our trade relationship. Within 100 days, I was called into the Oval Office and given word that the grain embargo was lifted. Similar work has been done in many countries and relationships continue to be formed today.

Looking ahead, I’m optimistic. The United States has already established itself as a reliable global supplier of food and I am confident that demand for U.S. grains will continue to grow.

Chinese Agricultural Expert to Speak at USGC 50th Anniversary Meeting 
Mr. Hanver Li is scheduled as the Monday luncheon speaker at the U.S. Grains Council’s 50th Annual Board of Delegates Meeting, to be held July 19-21, 2010.

Li is the chairman and chief consultant of Shanghai JC Intelligence Co. Ltd. (JCI), a Chinese consulting company that specializes in research and consultation on industry development, market evolvement and price movement in relation to grains, oils and feedstuffs.

JCI established the “JCI-style” method of analysis, which incorporates influencing factors on major agricultural commodities and many mathematical models. JCI information is highly regarded by well-known international investors, government departments and international trading houses.

“In light of the evolving market development opportunities in China, we find Mr. Li’s insight quite helpful and consistent with what is occurring,” said Thomas C. Dorr, USGC president and CEO. “We are looking forward to hearing Mr. Li’s presentation.”

Li has served as directors in different grain, feedstuff and oil companies, in addition to positions in the local government since 1974. In 1993, he was assigned by Charoen Pokphand Group as assistant vice president in its Beijing Headquarters, specializing in research on international trade and information related to the agricultural industry. After resigning from that position in November 2001, Li, joined by other investors, established JCI.

To learn more about the meeting or to register, click here.

COUNCIL NEWS

Please Join the Council in Welcoming its Newest Members: 
Amaizing Energy currently operates a dry-mill corn processing ethanol plant in Denison, Iowa, with a run rate of 55 million gallons per year. The primary co-product of the ethanol production process is distiller’s grains. Amaizing Energy is governed by a 17 member board of directors.

Boehringer Ingelheim Vetmedica Inc. (BIVI) serves as a center of competence in biological research, development and manufacturing for the worldwide animal health business. BIVI is headquartered in St. Joseph, Mo.

Global Ethanol currently operates two ethanol production facilities, one in Iowa and one in Michigan. Each of these plants will be an individual member of the Council. The first plant, located just outside Lakota, Iowa, is a traditional dry-mill plant with two distinct production trains. The plant utilizes approximately 34 million bushels of corn annually and produces about 226,000 tons of DDGS each year. The second plant is located in Riga, Mich. It is also a dry-mill ethanol production plant. The plant utilizes about 20 million bushels of corn per year and produces 164,000 tons of DDGS per year.

The Midwest Shippers Association (MSA) is a regional trade association focused on promoting exports and marketing of value-added premium grains and oilseed crops, and on advancing cost effective shipping and transportation from the region. Included among its focus areas are DDGS exports. MSA maintains close working relationships with the state agriculture departments in the region, and with commodity organizations and state transportation agencies in the five states. The group’s main annual event is the Midwest Specialty Grains Conference and Trade Show.

Rycom Trading Ltd. trades a variety of commodities for the swine, beef cattle, dairy, broiler and layer markets, including DDGS and barley. Rycom also serves as a link between end-users and buyers of agricultural commodities, as well as between manufacturers and producers through its trading services. The company helps agricultural manufacturers and producers strengthen their market, with services including foreign exchanges, customs brokerage, transportation and storage. Rycom is headquartered in British Columbia, Canada, but also has an office in Montana.

Zeeland Farm Services Inc. (ZFS) is a family-owned and operated business with over 55 years of service to the agricultural and transportation industries. ZFS is a diversified company specializing in many areas of agriculture and transportation. The company has several divisions, including grain, ingredients, seed, elevators, freight and export.

Register for the USGC International Distillers Grains Workshop to be held in Southeast Asia
The U.S. Grains Council, in partnership with USDA’s Foreign Agricultural Service (FAS), is sponsoring a DDGS seminar and trade conference in Southeast Asia July 29-Aug. 11, 2010. The Council extends an invitation to U.S. DDGS exporters and producers to attend this seminar to initiate face-to-face introductions with foreign end-users and importers.

The Southeast Asia Road Show will focus on DDGS promotion in the growing poultry (broiler, layer, duck) feed sector. Participants will visit four markets: the Philippines, Thailand, Malaysia and Indonesia, where seminars, technical workshops and one-on-one consultations will be held. The program in Kuala Lumpur will be a part of the SEA Feed Quality Conference. The target audience includes local traders, independent feed milling companies, integrators and large poultry producers with on-farm mixing capabilities. The program will serve as a platform for information exchange as well as buyer and seller interaction.

The Council will assist members with hotel arrangements, but travel and hotel costs will be the responsibility of the participant. The Council and FAS will pay for the seminars, marketing materials and translators.

If interested in attending, please contact Kimberly Karst at This e-mail address is being protected from spambots. You need JavaScript enabled to view it  or 202-326-0637.

Register for the Council’s 50th Anniversary Meeting 
Registration for the Council’s 50th Annual Board of Delegates Meeting is now available on the Council’s website, www.grains.org.

Join the Council July 18-21, 2010, for a meeting packed full of world renowned speakers.
- Ambassador Carolina Barco, Colombian Ambassador to the United States
- Ambassador Islam A. Siddiqui, Chief Agriculture Negotiator for the Office of the USTR
- Dr. Joseph Glauber, Chief Economist for U.S. Department of Agriculture
- Mr. Hanvar Li, Managing Director and Chief Analyst of Shanghai JC Intelligence Co. Ltd.
- The Honorable Daniel R. Pearson, Vice Chairman of the U.S. International Trade Commission
- The Honorable James Miller, USDA Under Secretary for Farm and Foreign Agricultural Services
- Mr. Richard Fritz, Executive Director for the Food and Agriculture Export Alliance
- The Honorable Clayton Yeutter, former Secretary of Agriculture

Contact Valerie Smiley, USGC manager of membership, at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , for more information.

COUNCIL ACTIVITY CALENDAR

June 27-July 2: The Council, in cooperation with the U.S. Embassy in Tokyo, will organize a team of the Japanese experts involved in the food, feed and environmental approvals of biotech corn events in Japan to travel to the United States. The team will meet with U.S. government regulators, and academic officials in the United States, as well as U.S. corn farmers and companies involved in the production, distribution and export of U.S. corn to Japan. For more information, contact Rebecca Fecitt, USGC director of biotechnology programs, at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .