U.S. Grains Council director in Latin America Kurt Shultz traveled to Colombia last week to find the lack of progress on the U.S.-Colombia Free-Trade Agreement (FTA) is continuing to have a devastating impact on U.S. corn, soybean and wheat producers. Colombia is a traditional market for U.S. corn producers, importing approximately 3 million metric tons (118 million bushels) of yellow corn annually. However, since 2009, Colombia has been gradually switching its corn imports to South American origins at the expense of U.S. producers.

This switch is due to an agreement with Mercosur countries (primarily Argentina and Brazil) which will gradually phase out their grain import duties. Meanwhile, the United States, which has had an FTA agreement negotiated since 2006, has been unable to get the agreement before the U.S. Congress for a vote.

“As a result of this inaction, the Argentinean market share for corn has increased from 3 percent in 2007, to 67 percent through June 2010. Furthermore, the U.S. market share, previously 96 percent in 2007, now stands at only 22 percent,” said Shultz.

“To further highlight the economic impact this is having on U.S. farmers in the first six months of 2010, Argentinean corn exports to Colombia have soared to $201 million, while U.S. exports have dwindled to $67.6 million,” said Shultz.

“The U.S. government needs to ratify this already signed FTA before it’s too late. Once these competitors’ trade patterns and relationships are established, U.S. market penetration will be significantly damged not only in Colombia, but it could result in continued erosion of the U.S. market share in neighboring countries, such as the Dominican Republic which has imported 80,000 metric tons (3.1 million bushels) of South American corn,” Shultz said. 

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