By Jay O’Neil, USGC Consultant, Senior Agricultural Economist, IGP at Kansas State University

Historically, the United States has enjoyed 100 percent of the corn market in the Dominican Republic. However, in the past two years, competition from South American corn has been encroaching on U.S. market share, which is currently maintaining about 70 percent of the market. A recent trip through the Dominican allowed this USGC consultant to gain some perspective on the potential causes of this loss and to uncover new marketing opportunities for U.S. coarse grain and co-products.

What was clear after speaking with poultry feed manufacturers and representatives from the commercial food industry was their lingering reservations of U.S. corn quality following the issues of the 2009/2010 corn crop. The one-on-one seminars with buyers gave us key facetime to detail the improvements in corn quality and to educate these end-users on ways to better control the quality of corn they do receive.

Interestingly, the majority of importers from the Dominican Republic purchase corn based on whole vessel average quality specifications, which allow for the maximum amount of supplier blending. To reduce quality variability in shipments, contract terms need to include either sub-lot sampling with maximum limits on broken corn and foreign material (BCFM) or a FGIS Cu-Sum load plan, which also greatly minimizes quality variability.

Also, logistics out of Argentina and Brazil have advanced fairly rapidly, allowing for cost advantages in storing and handling. It should be noted that U.S. soybean meal (SBM) is still preferred over other origins, and combination cargoes carrying SBM and corn have the potential to create freight advantages for the United States. Moreover, given the recent shipment delays in Argentine corn, Dominican feed manufacturers and poultry producers are more likely to consider U.S. suppliers now to avoid additional problems in the future.

Distiller’s dried grains with solubles (DDGS) has yet to establish a stronghold in the Dominican. Producers have been deferring to cheaper, domestically-produced, wheat midds for livestock feed. However, carefully targeted seminars, educating producers on DDGS nutritional value in livestock rations will be invaluable to market development.