Varying conditions in different countries are driving up US exports, particularly to South Korea, Algeria and Canada, including a boost in corn usage to combat higher prices for wheat.
April 11, 2008 By United States Grains Council
April 11, 2008
Global demand for U.S. corn has surged as exports have increased this year despite high prices. Several key market factors, combined with international market development efforts, contributed to the growth.
The U.S. Export Sales Report, released by USDA’s Foreign Agricultural Service, shows U.S. corn exports increasing significantly in various international markets, especially in Algeria, Korea and Canada. According to the report’s statistics, accumulated exports to all three countries have spiked when this year’s numbers (dated April 3, 2008) are compared to year ago numbers.
For example, Algeria’s imports from the United States have grown from 652,000 metric tons (25.7 million bushels) to 1 million tons (39.4 million bushels); Korea’s from 1.9 million tons (74.8 million bushels) to 4.6 million tons (181 million bushels) and Canada’s from 604,000 tons (23.8 million bushels) to 1.1 million tons (43.3 million bushels).
Various factors can explain these numbers, according to Chris Corry, U.S. Grains Council director of international operations for Rest of the World. In Algeria, the country’s poultry industry is the driving force for corn imports, which have doubled and continue to grow.
"The Council has played a key role in increasing demand for U.S. corn through its work with the Algerian poultry association," said Corry. "We have also been introducing new products such as DDGS (distiller’s dried grains with solubles)," he said, adding that Algeria received two containers from the Council last month for a commercial feeding trial.
In Korea, the Council has also promoted the benefits of U.S. corn and DDGS by sending representatives and experts to the country to meet with local end-users. In the past, the Council has also hosted Korean fact-finding delegations to the United States.
In addition, market factors have impacted the drastic spike in U.S. corn imports to Korea, particularly China’s limited availability of corn and Korea’s high demand for grains, said Byong Ryol Min, director of USGC’s Korea office.
"Korea produces 70,000 tons (2.8 million bushels) of corn a year, importing 99 percent of its total requirement, which is over 8.5 million tons (335 million bushels) yearly," he said. "China and Brazil have been major competitors in Korea’s corn import market, but unless China again becomes a huge corn exporter, the United States will dominate the Korean market as it has since 2007," he said.
The situation in Canada is different from the picture in Korea as Canada’s corn production has grown.
"I think the corn imports in Canada are probably due to the high price of wheat," said Neil Campbell, the Council’s consultant in Canada who works with Gowan’s Feed Consultants. "In Canada, wheat production is down but prices and demand are high. Wheat has priced its way out of livestock diets and ethanol use. Some of Canada’s ethanol plants in the western part of the country were built to use wheat but are now importing U.S. corn since it’s cheaper," he said.
Campbell also noted that the yield of ethanol is higher on corn than wheat, which would explain ethanol plants’ use of the U.S. product. Regardless of climbing prices, world demand for U.S. corn this year has shown no signs of weakening. Market circumstances and effective Council efforts are reflected in the increase of U.S. corn exports, providing a good outlook for U.S. farmers and producers.