(Posted Mon. Mar 31st, 2014)
During the last week, the officers of the U.S. Grains Council and National Corn Growers Association traveled to Colombia and Mexico and met with key customers and end-users, expressing appreciation for their business and reaffirming commitment to the export market. In both countries, customers anxious and excited to do business with the United States greeted the delegation.
For this marketing year, Mexico leads the world as the top U.S. corn export customer with accumulated exports of more than 216 million bushels from Sept. 1, 2013, to March 20, 2014, an increase of 253 percent over the same time period last year. Colombia is making a comeback as a regular buyer of U.S. corn, with accumulated exports totaling more than 59 million bushels from Sept. 1, 2013, to March 20, 2014.
NCGA President Martin Barbre commented that, "the simple comeback of the Colombian market after the free trade agreement is a true success story for both the Council and NCGA and highlights the fact that when trade works, the world wins."
In 2008, U.S. corn imports accounted for 80 percent of the Colombian corn market. The delay in ratification of the U.S.-Colombian Free Trade Agreement contributed to a decline in U.S. market share. By 2011, U.S. corn accounted for only 21 percent of that market.
NCGA, along with a variety of other organizations, pushed vigorously for passage of the FTA and, in late 2011, this important trade agreement was ratified by the U.S. Congress. Colombian buyers are now returning to purchasing U.S. corn without paying the disproportionate tariffs in place prior to FTA implementation.
“U.S. corn farmers export relationships in Mexico and Colombia clearly illustrate both why NCGA’s work in promoting trade agreements benefits U.S. corn farmers and the effectiveness of its work in collaboration with the U.S. Grains Council,” said CEO Rick Tolman. “Together, NCGA and USGC can affect real change by promoting policies that open markets and building the relationships that capitalize on said policies. While this work may seem ephemeral, the impact on corn demand has very concrete benefits for farmers.”
Meetings in both countries highlighted economic strength and demand growth for livestock products. With growing demand for meat, milk and eggs comes an increased demand for feed products. Despite the overwhelming good news coming from both markets, importers expressed concern about the increasing delay in shipping times from the United States.
Recent delays have caused importers to feel that U.S. infrastructure and logistics may not be keeping up with the pace of production and increased worldwide demand. With world corn imports up more than 85 percent and distiller's dried grains with solubles exports up more than 54 percent from September 2013 to January 2014 over the same time period last year, improvements to the U.S. logistics system need to be a priority.
"In order of priority, we look at quality, logistics and price," said Alejandro Lozano, Italco Feed Company procurement manger.
As long as the United States takes care of these issues, it will continue to enjoy a productive trade relationship with these important markets.