U.S. exports of feed grains in all forms to Colombia reached a record high during the 2015/2016 marketing year, according to data from the U.S. Department of Agriculture and analysis from the U.S. Grains Council (USGC) – a milestone on which the Council is seeking to further capitalize with outreach to buyers who want to take advantage of the favorable trade agreement between their country and the United States.
Total feed grains in all forms exports to the country reached a record high of 5.2 million metric tons in corn equivalent, up 6 percent from the previous marketing year, fueled by new export records in U.S. corn, sorghum and distiller’s dried grains with solubles (DDGS). The feed grains in all forms calculation also takes into account barley, meats and ethanol.
The United States exported more than 4.55 million metric tons (179 million bushels) of corn to Colombia during the 2015/2016 marketing year, claiming a 99.7 percent market share. Colombia has been the third largest customer of U.S. corn for the second straight year, only ranking behind Mexico and Japan.
Domestic production of corn in Colombia has flat lined in recent years while domestic demand for animal feed has increased. Coupled with low U.S. corn prices and trade preferences under the free trade agreement that went into effect in 2012, corn exports to Colombia rose 4 percent from 4.37 million metric tons (172 million bushels) in the previous marketing year.
The United States’ 2.55 million metric ton tariff-rate quota (TRQ) outlined in the Colombia-U.S. Trade Promotion Agreement was filled at the end of March 2016. Still, duties for corn in the Southern Common Market (MERCOSUR) were at a rate twice or three times higher than the out-of-quota duty for U.S. corn.
U.S. exports of DDGS to Colombia totaled more than 163,000 metric tons. The previous record of more than 129,000 metric tons was set in the 2013/2014 marketing year.
Exports of sorghum totaled more than 63,000 metric tons (2.5 million bushels), making Colombia the United States’ ninth largest sorghum customer in 2015/2016. The previous record of more than 19,000 metric tons (748,000 bushels) was set in the 2007/2008 marketing year.
The free trade agreement between Colombia and the United States was signed in 2006 but not put into effect for six more years. During that delay, U.S. grain exports decreased due to more favorable duties on products from regional sellers.
Once in place, however, the FTA and market development efforts by the Council and its members have fueled dramatic growth in this market.
Three in a series of “trade schools” recently hosted by the Council throughout Central and South America were held in Colombia, seeking to educate buyers on purchasing, risk management and sophisticated buying strategies such as direct sales or FOB purchasing.
Attendees at these events included management, operations and administrative staff at buying companies at all levels, a diverse set of interests showing the desire for more information about how best to buy from the United States and more and more sophistication in purchasing strategies.
Promotion continues with the upcoming roll-outs of the Council’s corn quality reports, freight contracting training, sorghum missions with top importers and continuous networking with local stakeholders.
More about Colombia’s market potential is available in past stories available here and here.