What is in this article?:
- Several countries ramping up corn production
- Market wide open
- Over the last decade or so, US farmers and commodity traders have had to pay more attention to South American corn production, particularly Brazil and Argentina. Today that view has to include countries in Europe, Asia, and Africa as well.
Market wide open
There was a time when the US had the corn export market locked up, with everyone else playing a minor role. Over the last decade or so, US farmers and commodity traders have had to pay more attention to South American corn production, particularly Brazil and Argentina. Today that view has to include countries in Europe, Asia, and Africa as well.
As multinational agribusiness firms have begun selling corn seed with top-notch genetics to farmers around the world, the list of competitors has increased dramatically. This is reflected in the increase in non-US yields from 50.1 bu/ac in 2000 to 65.1 bu/ac in 2011, a 30 percent gain. Comparing those yields to US yields in the 150-165 bu/ac range, we have an indication of the potential competition US farmers may face in world export markets over the next couple of decades as these countries bring their yields closer to US levels.
With the collapse of the Soviet Union, breadbasket countries whose trade was limited to the Soviet sphere are now free to participate in world agricultural commodity markets. They are also able to access the management systems, equipment, and seed technologies they were previously denied. As a result agricultural production is booming in some of these countries.
Looking at these numbers, one is apt to conclude that, “If it were not for the over 5 billion bushels of domestically produced corn to produce ethanol in the US, the US corn production sector would be a lot smaller and much less prosperous.
Daryll E. Ray holds the Blasingame Chair of Excellence in Agricultural Policy, Institute of Agriculture, University of Tennessee, and is the Director of UT’s Agricultural Policy Analysis Center (APAC). Harwood D. Schaffer is a Research Assistant Professor at APAC. (865) 974-7407; Fax: (865) 974-7298; email@example.com and firstname.lastname@example.org; http://www.agpolicy.org.