Supply/Demand Basics

  • World’s 2nd largest corn producer and consumer.
  • World’s largest swine, aqua, egg, beer, and distilled sprit producer, 2nd largest poultry meat and corn ethanol producer and growing dairy and beef producer.
  • World’s largest sorghum and DDGS importer in recent years, but imports declined significantly due to trade tensions. However, corn and sorghum imports returning under Phase One trade deal.

Country Overview

  • Quick recovery from COVID-19 outbreak will play a leading role in global demand recovery. Restructuring toward more consumption, less savings and focus on growth in low-income areas where per capita animal protein consumption is low.
  • Urban residents consume more animal protein than their rural counterparts. Urbanization is expected to grow from 60% to over 70% in the next 5 years.
  • Relatively rapid recovery from ASF outbreak in 2018 is causing corn feed demand to surge as more modern production facilities forgo lower quality feed ingredients and replace them with corn & SBM feed rations.

Trade and Market Share Overview

  • China is again the largest importer of U.S. sorghum in MY2019/2020 and has the largest amount of U.S. corn forward contracted for MY2020/2021.
  • Ethanol imports are adversely affected by continued 15 percent “232 tariffs” that were not exempted in the Phase One deal, as well as a 30 percent tariff (the WTO bound rate) re-imposed at the end of 2016.
  • DDGS exports still affected by AD/CV duties but other constraints are addressed in Phase One deal.
  • A protocol for U.S. barley imports was agreed upon in April 2020.

Policy Overview

  • While we should expect continued trade tensions, the Phase One trade deal reduced tariffs and resolved many of the non-tariff barriers to exports, including the required GMO processing certificates and TRQ management for corn, the DDGS plant import licenses, and export facility registrations, and resulted in a U.S. barley export protocol.
  • China is scaling back its commitment to using E10 nationwide by 2020 due to reduced corn inventories, but there are still opportunities to advocate for low-carbon and renewable fuel benefits of E10.