The leaders of the U.S. Grains Council (USGC) and National Corn Growers Association (NCGA) traveled to South Korea and Mexico this week in concurrent missions to engage with customers and government officials during a period of policy uncertainty in the U.S. corn industry’s #1 and #3 markets.
Exports are brokered across continents, but customers still appreciate the opportunity to talk face-to-face with their suppliers – particularly U.S. farmers.
Developing markets for U.S. ethanol involves a complex combination of trade policy and marketing work. Two U.S. Grains Council (USGC) activities this past week aimed to not only provide insights on ethanol policy development with a role for trade, but also exchange information with government officials, traders and even consumers about the environmental, health and economic benefits of increased ethanol use.
Recent events in foreign policy and the ongoing conversation about the value of U.S. trade agreements have put a spotlight on South Korea as a close U.S. ally and an important customer for U.S. products, including grains.
South Korea is now the fifth largest market for U.S. agricultural exports, totaling $6.2 billion in purchases in 2016. The country was the fourth largest importer of both U.S. corn and distiller's dried grains with solubles (DDGS) as well as the seventh largest importer of U.S. barley in the 2015/2016 marketing year.
By: Byong Ryol Min, U.S. Grains Council Director in Korea
While Korea's hog inventory has increased to more than 9.9 million head in 2013, Korea's demand for pork has outpaced its production. Primary due to its inability to supply high quality pork at competitive prices, the Korean swine industry is looking for new ways to be more efficient. This sector is very important for sustaining Korea's demand for U.S. grains, as it used 3.3 million metric tons of grain in 2013, or about 27 percent of the nation's total demand for grain.
- Coarse grains demand of 13 MMT/year – 98.5% imported: 79% for feed, 15% corn milling, 6% beverage alcohol and others.
- #4 import market of U.S. corn in MY 2015/2016.
- #4 import market of U.S.
After two years of discussion, planning and organization, MAIZALL this week took to the field, meeting with key government and feed industry leaders in South Korea and China. A partnership of the national corn producer organizations of Argentina, Brazil and the United States, MAIZALL is an alliance of the world's top three corn exporting countries, working together to advocate the elimination of trade barriers, acceptance of modern agricultural technology and enhancement of food security through trade.
Korean imports of U.S. distiller's dried grains with solubles (DDGS) have increased more than 100 percent since with continued growth potential as Korean nutritionists gain confidence in utilizing DDGS in swine rations. The U.S. Grains Council hosted a webinar last week aimed at feed formulators, swine extension specialists and pork producers, giving the Council a longer reach into the Korean swine industry and enabling local partners to share information more broadly among industry colleagues.
Lower oilseed and grain prices have prompted a bevy of overseas buying. Corn prices have fallen to a three year low, amidst huge and better than expected harvest reports. Last week, the USDA reported net corn sales of 1.3 million metric tons (51.2 million bushels) and more than a quarter million tons (9.8 million bushels) of new sorghum sales. The bulk of the new sales are destined for unknown destinations, accounting for 428,000 tons (16.8 million bushels) of corn and almost 176,000 tons (6.9 million bushels) of sorghum.
In 2012 Korea was the third largest corn importer in the world and the fourth largest market for U.S. corn. Yet because of the drought of 2012, U.S. imports have dropped to less than 1 percent so far in the 2013 calendar year, according to Korean import statistics. This has propelled the U.S. Grains Council to engage in aggressive programming to reinvigorate Korean buyers for U.S. corn.