The U.S. Grains Council Takes Advantage of a Market Opportunity for U.S. Sorghum and Corn in South Africa

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Using Market Access Program (MAP) funds, the U.S. Grains Council and its members responded to a short term market opportunity in 2016 to export U.S. corn and sorghum to South Africa, which was suffering from a severe drought due to El Nino. This activity resulted in sales of more than $50 million and established interest in these products among importers that will benefit the U.S. industry for years to come.

South Africa, typically a significant corn exporter, found itself looking in 2016 to import U.S. corn for the first time in almost a decade. South Africa uses both yellow corn for animal feed and white corn for a staple food known locally as pap or mieliepap.

While the United States had plenty of corn available for export at a reasonable price, the South African government had not kept its biotechnology traits approvals in line with U.S. approvals, creating a technical barrier to U.S. corn exports.

To address this constraints and set the stage for new sales, the Council organized three rapid response activities to engage the market and to promote U.S. exports:

1. The Council sent a trade team to meet with government and industry leaders in South Africa and learn more about constraints limiting U.S. exports, while also exploring the possibility of imports of feed grains beyond corn.
2. Immediately following that visit, the Council hosted a team of representatives from one of the largest corn milling companies in South Africa to the United States, offering those representatives information about the U.S. grain handling system and quality standards and meeting with exporters who could provide them with the corn they needed.
3. In the fall of 2016, the Council hosted another team of commercial grain traders and end-users from South Africa to showcase the 2016 U.S. sorghum harvest.

As a result of these outreach efforts, South African buyers imported 59,000 metric tons of U.S. sorghum valued at $9.5 million in the 2016/2017 marketing year.

In addition, the South African Department of Agriculture, Forestry and Fisheries (DAFF) announced in December 2016 that it would immediately eliminate the biotech restrictions on corn imports from the United States. Subsequently, the South African government issued 15 permits authorizing the import of 1.3 million metric tons of white and yellow corn from the United States. As of May 2017, 221,000 metric tons of U.S. corn valued at $43 million have been shipped to South Africa.

The Council invested $80,000 of MAP funds into capturing this short term market opportunity, resulting in sales valued at $52.5 million and a return on investment of (ROI) of $656 per $1 of MAP funds invested.