From the Corn Rows

U.S. Grains Council hard at work for farmers

Biofuel waivers threaten farmers and jobs in rural communities

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One of South Dakota Corn’s major industry partners is the U.S. Grains Council, an organization that consists of corn, sorghum and barley producers as well as agribusiness organizations. The council develops and expands export markets and promotes trade globally. In addition to corn, sorghum and barley, exported products include ethanol, distillers grains and other co-products. The council operates programs in more than 50 countries and has 28 full-time offices.

Nearly one-third of the corn harvested in South Dakota is exported, making the Grains Council a valuable partner. Most grain that leaves our state is transported by rail to the Pacific Northwest and then shipped overseas.

Although COVID-19 has slowed exports this year, Grains Council Chairman Darren Armstrong says there have been bright spots. The current marketing year’s top five markets for U.S. corn are Mexico, Japan, Colombia, South Korea and China, in that order.

China is a bright spot at 84 million bushels this year – nearly 4½ times as much as it purchased all of last year (18.7 million bushels). In new crop corn, China is the top buyer so far, including its biggest single sale ever. Armstrong says that during this extraordinary time, U.S. farmers have never stopped working and neither has the Grains Council.

Although exports are down after a slow start because of the pandemic, the last half of the marketing year is seeing a real surge in sales and shipments.

New-crop corn sales are currently double what they were at this time last year. The destination for much of that corn is China, which recently made substantial purchases of corn and sorghum. In fact, China has purchased three times as much U.S. corn as it had purchased by this time last year, according to the Grains Council.

Commodities economist Arlan Suderman, who spoke during a virtual summer meeting of the Grains Council, pointed out that U.S. farmers have an abundance of grain in storage and will need to move it to make room for new crops. Much of the nation’s corn is normally used to produce ethanol, but production dropped drastically during the pandemic.

Fortunately, Suderman expects China to dramatically increase its grain purchases and shipments through the end of the year because its corn reserve is nearly depleted.

Elsewhere, sales of dried distillers grains have climbed in Vietnam, one of the fastest-growing feed and food markets in the world. In addition, Vietnam has imported 221,000 metric tons of U.S. corn, compared to 65,000 metric tons by this same time last year.

Indonesia has been a strong purchaser of distillers grains and corn gluten meal and substantially increased its ethanol purchases after the Grain Council and its ethanol partners convinced the country to eliminate a ban on blending ethanol into fuel. If Indonesia moves to an E10 policy, that would provide a potential ethanol market close to 1 billion gallons. Incidentally, that total would be nearly as high as the amount South Dakota’s 16 ethanol plants have a capacity to produce annually.

Gains also have been made in Africa. One example is Egypt’s purchase of a vessel of U.S. corn for the first time in two years. The council is working on a project to prove U.S. corn has higher starch value than corn from other countries, which could open big opportunities with starch plants in various nations.

Ethanol exports are a major export emphasis for the Grains Council as countries expand their fuel use and mandate biofuel blending. Although the main use is as a fuel, ethanol destined for industrial uses accounts for 25% of U.S. ethanol exports. In May, because of the pandemic, that total reached 50% as more ethanol was used to make sanitizer.

As farmers in South Dakota and throughout the U.S. try to expand existing markets for their grain and develop new markets, export opportunities are crucial. That’s why the Grains Council is such an important partner of South Dakota Corn.

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