Farmers currently participating in the U.S. Grains Council’s (USGC) Grain Export Mission (GEM) are taking part in a unique opportunity to see the global market in which they work from the eyes of both customers and competitors.
Two groups of mission participants departed early this week for South America, each visiting a competitor country and a U.S. customer country. GEM participants are observing local conditions, trade opportunities and constraints, as well as sharing with foreign contacts insights about producing coarse grains in the United States.
This week, one group of participants was in Colombia, the second largest corn importer in the Latin American region. Colombia is a country in which the United States traditionally captured more than 80 percent of the market, though there recently had been an erosion in U.S. market share due to unfavorable tariff treatment. This year Colombian buyers return to purchasing U.S. corn, driven by price and advantages from the implementation of the U.S.-Colombia free trade agreement (FTA).
This market offers significant opportunities for U.S. corn, sorghum, barley and corn co-products, which were noted by GEM participants.
“The FTA created an opportunity for increased sales of U.S. coarse grains and co-products to Colombia,” said Lyndsey Erb-Sharkey, USGC director of industry relations. “In fact, Colombia importers ran through the 2.4 million metric tons (94.5 million bushels) tariff rate quota (TRQ) in June, which created congestion at the ports.
“Regaining U.S. corn market share was a key priority for the Council in 2014, and maintaining that market share will be important in 2015. Having USGC members see this success firsthand is key to expanding their awareness of how new trade opportunities and trade policy impact not only the global grain trade but their work as well.”
This team will continue to a competitor country, Brazil, late this week, where they will see an agricultural powerhouse that faces many challenges with infrastructure. Understanding the current reality and the future prospects of Brazil’s agricultural production is vital for U.S. farmers.
Another group of GEM participants started their week in Argentina, a significant competitor for U.S. corn, barley and sorghum exports. Agriculture is vital to the country’s economy but faces many challenges due to politics. Despite these constraints, it is estimated Argentina has the capacity to double its corn production and significantly increase its sorghum production, making it of substantial interest to both U.S. corn and sorghum producers.
While in the country, this group met two Argentine barley experts who presented a picture mirroring the situation faced by U.S. barley producers. Argentine barley growers face similar constrictions related to contracting with breweries. Group participants were very interested to learn about the use of silo bags by Argentine barley producers to store malt barley for more than a year with less than 10 percent moisture.
On Saturday, this GEM team will travel to the second largest U.S. corn export market, Mexico. Its shared border with the United States and the North American Free Trade Agreement (NAFTA) create unique opportunities for growth and closer cooperation between U.S. agricultural producers and their customers in Mexico. Mexico is a growing market and the Council is actively seeking to create new market opportunities there.
Both GEM groups will complete their missions in Panama at the end of next week with a tour of the Panama Canal, which is in the process of being expanded.
The Council expects participants to walk away from this mission with a clearer understanding of the challenges, opportunities and competition U.S. grains face in the international marketplace.
Updates on the GEM will be posted throughout next week on the Council’s social media including Facebook, Twitter and Flickr.