August 8, 2012

Grains Council meeting focuses on future


New USGCThe U.S. Grains Council held the 52nd Annual Board of Delegates meeting in Vancouver, Washington last week.

Although it is easy to talk about the challenges, issues and the big topic in the room – drought – the Council is really focusing on the goals ahead for the future.

DSC02831One of the discussion points included transportation – specifically water transportation in the Pacific Northwest (PNW). Kristin Meira with the PNW Waterways Association – an organization that is an advocate for transportation/navigation funding, policies and issues – spoke on the positive current river system completed project. The PNW accounted for 26% of the grain exports in 2011 in the U.S. She explained that the Columbia Snake River system is 110 miles of deep draft channel 43 foot channel depth (recently deepened through a dredging project) extends 365 miles inland. They have eight locks which keeps 700 trucks off of the highways and has brought in a lot more terminal use and rail investments.

DSC02834During a tour conference participants were able to see the PNW waterways in action by visiting two grain river ports which unloaded grain through rail or barges onto large vessels in the Columbia River. One facility was new as of February and they use robotics to unload trains and load vessels with grain. This is important to Nebraska corn farmers because a majority of the corn being exported is sent through the PNW and out of ports like these to Asia. We were also able to see the tallest grain silo in the U.S. which is the second tallest in the world.

My role in the meetings was involvement in the Membership/Communication Action Team where we discussed the best membership structure for the corn, sorghum and barley checkoff groups, as well as agribusiness and general farm organization sectors. Communicating the issues of the drought with our international customers is going to be an upcoming priority to explain corn crop quality and quantity with our buyers of grain.

My main six takeaways are listed here:

  1. China's grain storage is at an all-time low and increasing commercial high end poultry production. This is projected to provide long-term demand for corn.
  2. Vigilant focus on the implementation of FTAs (Korea, Panama, Colombia) and TPP negotiations.
    1. Japan will go forward with TPP, but may take until 2013 until it happens and will probably be 2014 when it is finalized.
  3. Overarching issue of funding - FMD/MAP
  4. Ethanol capacity and demand has peaked in the last three years
    1. Where will the excess corn go? Export market.
  5. The most populated areas in the world aren't using GMO. Good for US because we can export to those areas, but a tough challenge with increasing population.
  6. Food 2040 is focusing on the increasing middle class: Affluent Asian consumers will drive global demand.

DSC02827Lastly, during the meeting, members voted in a new slate of board of directors, selecting Don Fast, farmer from Montana, as Chairman.

"All of us understand that 95 percent of the worlds people live outside the United States, and that many of them are making great strides economically. Our world is getting smaller and our markets are getting bigger,” Fast told attendees of the conference.

"That's the reality we face and that's what we've chosen as our theme for the coming year, 'Smaller World, Bigger Markets.' We have a lot of work to do, it will be a challenging year...but the strategic situation hasn't changed."

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