What is in this article?:
- U.S. unlikely to dominate future corn exports
- Corn is primary feedstock
- Foreign nations that previously relied on the U.S. for corn are growing more of their own or buying from other producing countries.
- High prices have caused the rest of the world to expand their production and become more self-sufficient.
The United States remains the world's corn export king, although its empire is shrinking, says a Purdue University agricultural economist.
Foreign nations that previously relied on the U.S. for corn are growing more of their own or buying from other producing countries, said Philip Abbott. He predicted the trend will continue even if market conditions improve and U.S. corn production increases.
"The U.S. has historically been a very important part of the international corn market," Abbott said. "Prior to the 2007-08 food crisis and spike in commodity prices, the U.S. exported well over half the amount of corn that entered international markets. Since then, the high prices have caused the rest of the world to expand their production and become more self-sufficient.
"Even if we get bigger corn crops in the future, it's likely that the demand in foreign markets will not soon recover to the level that it once reached."
U.S. Department of Agriculture statistics bear that out. In the 2007-08 marketing year, the U.S. exported 2.4 billion bushels of corn. The USDA estimates just 1.1 billion bushels of U.S. corn will be exported in the 2012-13 marketing year.
What has happened to U.S. corn exports, and why might the U.S. not claim 50 percent of future world corn markets? There are a few reasons, Abbott said.
First, ethanol. The federal Renewable Fuel Standard mandates that gasoline sold in the U.S. be blended with ethanol. This year, the law requires oil companies blend 13.2 billion gallons of ethanol with the gasoline they produce. Next year, the blending requirement increases to 13.8 billion gallons.