North African Buying Team Visits Nebraska to See Corn Industry Firsthand

The U.S. Grains Council’s Export Exchange conference just wrapped up in Detroit, Michigan, and overseas grain buyers from the North African countries of Morocco and Tunisia have now seen corn harvest and ethanol production for themselves after making a pre-conference stop in Nebraska.

International trade plays a key role in the success of our industry. With a record corn harvest expected for 2016, it is critically important that there are markets for our corn and value-added corn products. U.S. Grains Council’s (USGC) Export Exchange conference offers the perfect opportunity to bring international trade teams to Nebraska, and across the U.S., so they can see our corn supply and quality for themselves.

The team, consisting of representatives from major North African corn importers and feed companies, had the opportunity to visit Central Plains Milling in Howells to learn about the U.S. feed industry, before heading to Green Plains trading floor in Omaha. They also had the opportunity to tour the Green Plains production plant in Shenandoah, Iowa to see ethanol and distillers grain production. The team capped their Nebraska visit by experiencing corn harvest firsthand at Alan Tiemann’s farm by Seward.

Tiemann, at-large director on the Nebraska Corn Board and past-chair of the USGC said, “The grain buyers from North Africa were extremely impressed with the quality of our corn and corn products and were appreciative of their time in Nebraska.”

“The fact is, every farmer and rancher in Nebraska benefits from exports, even if they don’t personally export anything. Inviting grain buyers from Morocco, Tunisia and other places around the world to Nebraska is a vital step in establishing relationships and building new export markets with international trade partners,” added Tiemann.

Held every other year by the USGC and the Renewable Fuels Association (RFA), Export Exchange brings together international buyers with U.S. sellers of corn, sorghum, barley, distiller’s dried grains with solubles (DDGS), corn gluten meal and corn gluten feed. The conference highlights the importance of strong trade policy and market development to U.S. agriculture. The USGC in partnership with Nebraska Corn Board works in more than 50 countries and the European Union to market U.S. grains and their related products and build long-term demand from loyal customers.

Boone McAfee, Nebraska Corn Board’s director of research and coordinator for this team, noted, “Strengthening the bonds between Nebraska suppliers and our international trade partners is essential. The connections made during their visit to Nebraska, in addition to their time at US Grains Council’s Export Exchange Conference, will help propel a positive trade partnership for current and future trade opportunities.”

Photos available (Click here).

Panama Canal Expansion

The long-awaited Panama Canal expansion opened on June 26, 2016 with a ceremonial ship passing through the waterway. The U.S. grains industry, including the U.S. Grains Council (USGC), has eagerly anticipated the completion of the Canal expansion project since it was announced nearly a decade ago.

"The Canal is a vital trade route for all grains and other agricultural commodities that are shipped from the U.S. Corn Belt to Asia," said USGC Chairman and Nebraska farmer Alan Tiemann, who attended the ceremony. "In fact, with the completion of this project, it is estimated that the cost to transport grain between those two points will drop."

This project was the largest expansion for the Canal in nearly a century. The multibillion dollar plan constructed a new set of locks that allowed for the passage of wider, longer and heavier loaded ships.

"The Canal's expansion and resulting decreases in shipping costs and time will improve competitiveness of U.S. grains in growing markets," Tiemann said. "This will help U.S. farmers gain access to new markets and continue to expand sales with buyers in our established markets who want more efficient shipments of grain."

While the exact impact of the Canal's expansion on the global grain trade remains uncertain, the Canal's ability to handle Capesize vessels will create greater opportunities for exports.

For more about the grand opening of the Panama Canal, watch Alan's Tiemann's interview below with Market Journal.

For more information on the expansion project, visit the Panama Canal Authority's website here.

Growing Nebraska Through Trade

Nebraska and its role in the international market were on the forefront of discussions this week as Nebraska Congressman Adrian Smith hosted the “Growing Nebraska Through Trade” seminar on Tuesday at Raising Nebraska in Grand Island. Trade of agricultural products is an ever-important issue to Nebraska corn producers as markets for our products rely on international customers.

“With more than 96 percent of the world’s customers living outside our borders, trade provides tremendous opportunities to grow our rural economy,” Smith said. “As our work on trade negotiations moves forward, I am committed to helping expand access to thriving international markets for Nebraska producers, manufacturers, and consumers. I hope everyone who joined us today gained valuable knowledge and connections to help drive their businesses toward greater success in the global marketplace.”

The seminar featured Nebraska native and Chief Agricultural Negotiator in the Office of the U.S. Trade Representative, Ambassador Darci Vetter. AgView talked with her about a busy week ahead, progress on TPP and the continuing process of the Country of Origin Labeling dispute, watch here:

Topics at the seminar included state-level efforts to grow the agriculture economy, rural growth and value-added agriculture, and ongoing efforts to open markets to Nebraska and U.S. agriculture products. Other featured speakers included Vice-Chancellor of the University of Nebraska Institute of Agriculture and Natural Resources, Ronnie Green; and speakers from state and federal agencies as well as business and education leaders from the Third District.

Dr. Green emphasized that Nebraska plays a pivotal role in international trade, and the University of Nebraska also has many programs which helps develop ideas into goods and services for a growing world.

Learn more about how international trade is important to Nebraska corn farmers at our website, www.nebraskacorn.org.

*Pictures and video from AgView.net.

Greetings from Denver!

By Kaydee Caldwell, US Meat Export Federation Intern

My name is Kaydee Caldwell; I’m a 5^th generation cattle producer and avid beef eater. I’m going into my junior year at the University of Nebraska – Lincoln with a major in Animal Science. This summer I am spending my time in Denver, CO at the U.S. Meat Export Federation through a partnership with the Nebraska Corn Board. Being a producer I have been trying to gain knowledge on what happens after my cattle leave our pastures and enter the feed yards to be finished out. Where does the end product go? Of course the grocery stores, but OUR beef is sent all around the world, and people LOVE it! I’m so thankful for the opportunity to be working with the Meat Export Federation so I can fully grasp the trade concepts as well as what I, as a producer, can do to make our exports even stronger and more sought after.

 I moved to Denver the 11^th of May and started working on the 12^th. I take the Denver Light Rail to and from work every day, which is pretty handy! It really hasn’t been too hard adjusting to getting through the city; the hardest part is not being able to see pastures of cattle or cornfields! 

I’ve had a few adventures since starting. My second week at work USMEF flew me down to San Antonio, TX for their Board of Directors meeting. I got to walk along the River Walk, eat at NAO, dine at Texas Land & Cattle AND find out what happens when your car keys get lost in a different state! It was a great week listening to numerous industry leaders and having great discussions with members of the international offices. I had a great chat about Beta Agonists with a representative from the EU.

My project for the summer while at USMEF is to compile a pork cuts book that targets the international markets. I’ve contacted our international offices, lined up a photo shoot with a packing plant and photographer and will be going to Guymon, OK next week to get the photos done for the book!

The staff here in Denver is amazing, there’s quite

a few in the office that have really helped me to adjust to living in Denver and helped me through some stressful times, mostly losing my keys in San Antonio. I am truly thankful for the experience and having the opportunity to work with some VERY amazing people. I can’t wait to see what I learn throughout the summer, there’s a lot of knowledge in this office and I plan on absorbing as much of their wisdom as I can.

Now for some fun pictures!

This is my office farm, I have a cow, pig, chicken, steer and owl. 

I have taken up indoor sky diving and it is VERY fun, scary, but fun. 

I was also very excited to find out there is such a thing as a S’mores frappucino!

Proud to Represent Nebraska Agriculture in Global Programs

By Amanda Clymer, US Grains Council Intern

Metro stations, museums, and taxis galore- not your normal small town Nebraska, let alone Lincoln. It’s the big city of Washington D.C. and I get to call this city home for the summer.

My name is Amanda Clymer and I just finished my sophomore year at the University of Nebraska- Lincoln where I major in agricultural economics. I grew up outside of David City, Nebraska on a small cattle, sheep and row crop operation.  This summer the Nebraska Corn Board has given me the opportunity to explore the supply chain further after the American producer delivers grain to the local elevator.  I am interning at the U.S. Grains Council in the Global Programs department to get a closer look at how this organization works to develop the export markets for U.S. grains and co-products.

The U.S. Grains Council is focused on developing markets, enabling trade and improving lives. The organization works specifically for corn, sorghum, barley producers and agribusiness organizations. In order for the organization to accomplish its goals, the organization implements a number of programs aimed toward maintaining markets and opening doors in new markets.  The Global Programs department works on several different USGC programs, but this time of year they are in full swing of planning for international trade teams coming to the U.S. The trade teams provide opportunities for USGC members and overseas customers to make connections and for international customers to see a firsthand look at the production, quality and export system in the U.S. Trade teams will be composed of buyers, end-users, policy makers, government regulators and media. As the intern in Global Programs I have had and will have the experience of helping to plan for the 27 trade teams coming to the U.S. to experience what I love, American agriculture.

Outside of my time in the office, I have been exploring what the city has to offer. I have taken the time to visit the United States Botanic Garden and the Smithsonian museums including the museum of American History and the Air and Space Museum. I have many more to see, but I have a few more weeks ahead of me. I am also looking forward to going to a Washington Nationals baseball game, canoeing down the Patomac, and going on a monuments by moonlight tour.

Lastly, when you’re in a new place it means the opportunity to try new food. My roommates and I have been marking restaurants off the list and adding new ones to the bottom. I know one staple for me already in D.C. is Pitango, a sorbet and gelato shop.

With two and a half weeks down, there is still lots to learn, explore and try. I am looking forward to the opportunities that await me here in Washington D.C. 

Podcast: Trade teams from Malaysia and Egypt coming to Nebraska

In this podcast, Boone McAfee, director of market development and research for the Nebraska Corn Board, shares about the upcoming international trade teams from Malaysia and Egypt in cooperation with the U.S. Grains Council. They are visiting Nebraska to evaluate our 2014 corn crop and witness the harvest of what promises to be the largest U.S. corn crop in history. This is a great opportunity for us to tell the story of the quality, abundance and reliability of Nebraska corn.

Now, click here to listen to the podcast.

Podcasts are also available on iTunes! Click here to subscribe.

Harvested Biotech Crops Top 4 Billion Acres

When the sixteen farmers representing agriculture around the globe gather in Des Moines next week for the Global Farmer Roundtable, they can celebrate a milestone. Since 1996 until now, over 4 billion acres of biotech crops will have been harvested.

That’s billion with a B.

Four billion acres is 1.5 times the size of Europe. It’s nearly as big as South America.

Ross Korves, economic and trade policy analyst with Truth About Trade and Technology: “The calculation starts with 1996 commercial production of biotech crops. Each February we benchmark back to the ISAAA (International Service for the Acquisition of Agri-Biotech Applications) December 31 number of acres planted for the year. Much of the world does not have a harvested number like the U.S., but we’re making an educated guess to paint a simple picture. The counters (for planted acres and harvested acres) run 365 days per year. They come alive in the spring and fall and peak out at 25-30 million acres per week in the northern hemisphere and 15-20 million in the southern hemisphere.”

What’s the bottom line lesson here?

Bill Horan, chairman of Truth About Trade and Technology: “The B word for billion acres of biotech crops without any reported issues in the food chain means just one thing. There are a lot of voices out there critical of biotechnology, spinning their precautionary tales. Four billion acres of biotech crops have filled a lot of stomachs, and biotech is one of the answers for meeting agriculture’s goal to feed 9 billion people by the year 2050. I think it’s time we lay all of these scary food myths to rest, like the passing of the boogeyman, once Halloween is over. Once we’re able to do that, we could focus on the work ahead of us.”

Nebraskans Prepare for USMEF Japan Beef Mission

A group of Nebraskans is packing its bags for Japan as part of a mission coordinated by the U.S. Meat Export Federation (USMEF).  The group departs on Sunday, July 7 and will return Saturday, July 13.  The Nebraska Corn Board is sponsoring the Nebraskans on the mission.

The focus for this mission is an opportunity for U.S. beef and corn producers to assist in U.S. beef promotions and trade activities in the one of the busiest meat purchasing seasons.

Participants will have meetings with the U.S. Embassy, retail and importer discussions, interaction with over 500 meat buyers at a meat symposium, and a U.S. beef activity in the Sendai region of Japan. Main talking points will include the continued safety of U.S. beef that is LT 30 months and younger, as well as promotion of the quality of U.S. corn fed beef.

Nebraskans on the mission will include:

- Mark Jagels of Davenport, a corn farmer and beef producer.  Mark is on the Nebraska Corn Board and is the chair-elect of the U.S. Meat Export Federation.

- Tim Scheer, corn producer from St. Paul.  Tim is chairman of the Nebraska Corn Board.

- Dale Spencer, a beef producer from Brewster, and president of the Nebraska Cattlemen

- Kyle Cantrell, corn and beef producer from Anselmo

- Doug Parde, corn and beef producer from Sterling

- Dave Buchholz, president of David & Associates in Hastings, who is handling communications and media services during the mission

The mission of USMEF is to increase the value and profitability of the U.S. beef, pork and lamb industries by enhancing demand for their products in export markets through a dynamic partnership of all stakeholders.  Simply put, USMEF is "Putting U.S. Meat on the World's Table."

__________________________________________________________________________

Please follow daily updates from the team through the Midwest Corn Growers Study Tour blog! You can sign up for automatic updates during the mission by visiting this page (http://midwestcorngrowers.blogspot.com) and entering your email address in the upper right of the home page.

Also, follow updated on the Nebraska Corn Board Facebook page, and through Twitter with the #NECornBeefJapan hashtag.

First week on the internship with US Grains Council

By Bryce Vaughn, U.S. Grains Council intern

I am happy to announce that I have completed my first week of my last internship of my college career at the U.S. Grains Council (USGC) in Washington D.C. I was assigned to work primarily for the Global Programs department which is directed under the leadership of Kim Karst.

During my first week I have had the opportunity to assist the team with completing the 2014 Unified Export Strategy (UES). The UES is the USGC’s strategy for the following year which is presented to the United States Department of Agriculture (USDA) Foreign Agricultural Service. The UES proposal is submitted every year and provides the funding for the USGC to carry out their market development efforts. This is a major project for the office since the UES is due at the end of the month and the funding requested for the following year totals close to $15 million.

In addition to working on the UES, I have also been engaged in program coordination. In June, USGC staff and members will travel to Panama for the Latin America Co-Products conference. I have been assisting in the preparation of travel briefs for staff and consultants that will be traveling on behalf of the Council.

The main project for my internship will likely be working on two trade mission programs. A Taiwanese DDGS and corn team will travel to Minnesota, Illinois and Washington, and a Korean Biotech Team will travel to Washington, D.C. and Iowa. Both teams will travel to the U.S. in July, so this will give me the opportunity to participate in efforts from step one to the conclusion of their mission.

Podcast: Agricultural Biotechnology Trade

In this podcast, Carl Sousek, farmer from Prague and Chairman of the Nebraska Corn Growers Association, shares about modern technology and Agricultural Biotechnology Trade.

Last week, the United States and several other nations announced their intention to work together to remove global barriers to the trade of agricultural biotechnology. These nations have also agreed to promote science-based, transparent and predictable regulatory approaches.

Ag production in these six nations is a major contributor to global food security. They produce the vast majority of the world's corn and soybean supply in international markets. Farmers in these countries are using modern technology—including biotech plants—to grow more with less.
Listen for more!

Nebraska Corn Kernel podcasts are also available on iTunes! Click here to subscribe.

Japan joins Trans-Pacific Partnership agreement, positive for Nebraska and ag exports

On Friday of last week, the Obama Administration announced bilateral consultations with Japan about its interest in joining the Trans-Pacific Partnership (TPP) have concluded and the U.S. welcomes Japan joining TPP negotiations. The TPP is an ambitious, next-generation, regional trade agreement that seeks to create a “new millennium model for trade.” As the world’s third largest economy, the addition of Japan will provide the platform for a Free Trade Area of Asia Pacific and will strengthen the U.S./Japan economic and strategic relationship.

The agreement brings Japan closer to entering talks on the Trans-Pacific Partnership (TPP), which Japan hopes to participate in as early as July. Japan needs formal approval by all 11 participating countries to take part in the talks. If Japan does join, the pact would cover an area that accounts for almost 40 percent of world economic output.

What does the TPP mean for Nebraska and agricultural products?

TPP is a U.S.-led free-trade agreement in the Asia-Pacific region which represents a positive development to expand market access for Nebraska exporters in one of the world’s largest economies. Additionally, U.S. food and agricultural exports to the Asia-Pacific region have previously reached more than $80 billion, and account for more than 70 percent of total U.S. agricultural exports to the world.

The U.S. Grains Council strongly supports the announcement of bilateral negotiations with Japan regarding the TPP. The Council has enjoyed over 50 years of cooperation and relationships working to innovate the Japanese feed, livestock and starch industries. Because of this mutual relationship and the U.S.'s commitment to be a long-term reliable supplier, Japan has been the number one customer of U.S. corn exports.

TPP will also provide opportunities for free and fair trade. And when trade works, the world wins. The TPP objective of removing tariff and non-tariff barriers will require adjustments both in the U.S. and Japanese agricultural sectors.

The Council believes that Japan is well positioned to not only remain a strong customer of the U.S. feed grains industry, but that it will have enormous opportunities to meet future Asian consumer-driven demand for high value and quality food.

Smaller world, bigger markets

Nebraska Corn Board directors Alan Tiemann and Bob Dickey as well as staff, Don Hutchens and Kelsey Pope, attended the U.S. Grains Council's 10th International Marketing Conference and 53rd Annual Membership Meeting in Charleston, South Carolina last week to review strategies and opportunities for competing in the rapidly changing global marketplace.

The delegates were greeted by Jim Newsome, president and CEO of the South Carolina State Ports Authority. The fifth largest port on the Atlantic coast, Charleston enjoys deep water, a booming local manufacturing economy including many export-oriented companies, and a supportive state and local government. Already capable of handling post-Panamax vessels at high tide, the port is now engaged in a deepening project that will give it unrestricted deep water capability – and an open road for further growth.

Many speakers in the general session addressed concerns that U.S. producers have because of the drought, as well as country director's concerns of market access.

"All of us understand that this is an especially challenging year for coarse grains exports due to the U.S. drought and the short crop," said Tom Sleight, USGC president and CEO. "But all of us also know that the underlying dynamics point to rapidly rising global demand. The weather set us back this year, but U.S. producers and agribusinesses are ready to rebound strong."

Sleight also emphasized that now is the time to redouble the Council's efforts – with customer servicing to sustain export demand and ensure that the United States can regain its market share next year, and with continued efforts in policy, demand building and co-product marketing. Through the USDA's export promotion programs, including the Foreign Market Development and Market Access Program, the Council is able to implement and sustain these efforts.

The Council's staff, Dr. Erick Erickson and Kimberly Karst, took time to identify a series of major underlying shifts that will transform the business environment for both producers and agribusinesses. In the near term, U.S. agriculture faces a familiar set of issues: increasing demand from a growing global middle class; increasing competition from foreign exporters; immediate pressures from the drought and short crop of 2012; challenges on market access and international acceptance of biotechnology. Underlying these issues are "megatrends," dynamics that will qualitatively change the nature of the global marketplace.

Erickson and Karst identified four such drivers: individual empowerment in a world in which, by mid-century, a majority of people will be middle class; the aging of the global population, especially in the developed countries; the diffusion of power in an international system in which the currently developing countries – already home to a majority of the world's people – will become the world's economic and military center as well; and increasingly severe land, water, energy, and other resource constraints.

After the meetings concluded, Kelsey Pope took a post-mission with a group of producers and staff from Iowa, Illinois and Indiana. They heard from the local offices of The Scoular Company and Norfolk Southern, as well as a tug boat tour of the Port of Charleston.

For more from the Conference, visit the Council's News Room and find pictures from the event on Flickr.

Grains Council meeting focuses on future

The 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.

One 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.

During 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.

Lastly, 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."

Panama Canal a highway of ag products to the world

What does agriculture and the tropics have in common? The Panama Canal - the highway of agricultural products from the Atlantic to the Pacific.

The U.S. Grains Council hosted their International Marketing Conference in Panama City, Panama last week and Nebraska Corn Board directors and staff had the opportunity to attend.

Besides the general sessions and Advisory Team meetings, an excursion from the conference allowed attendees to enjoy a beautiful, balmy evening on a dinner cruise through the Panama Canal and through the locks from the Pacific side going inland to Gatun Lake. The following day, they got a first-hand view of the new Canal expansion site and learned how it would affect world trade – especially with benefits to agriculture.

The expansion of the Canal will not only allow for vessels to travel through the Canal more efficiently, but think of the opportunities for exports of Ag products from and to the US! The expansion is going to be a wider and longer "lane" that will allow larger vessels to travel through on both sides - the Atlantic and Pacific sides. The world is truly changing but this is an exciting time for us in agriculture to experience how the Canal has and will continue to bring our ag products to the dinner plates of our foreign customers.



Nebraska Corn Board chairman, Alan Tiemann, also serves on the Grains Council’s Executive Committee and is the Board Liaison to the Membership/Communications A-Team. NCB staff, Kelsey Pope, is also a member of the Mem/Com A-Team and they were able to complete some exciting stuff for the Grains Council. For the past year, the A-Team has been working on a new branding initiative, fresh and new with an updated logo and vibrant, user-friendly website which just launched – go check it out here!

NCB Executive Director, Don Hutchens was awarded for his service to the Grains Council for over 25 years.

Find more pictures on our online Flickr photo album here.

Texas Corn Mission-Nebraska Corn Board Staff Report

In this week's staff report, Kelly Brunkhorst talks about the recent Nebraska, Iowa, and Illinois corn mission to Texas. He discusses what they saw while down there and some of the things that they heard from end users. To learn more about Nebraska Corn, be sure to visit the Nebraska Corn Board website!

Nebraska Corn Board Staff Report with Kelly Brunkhorst

Nebraska Corn Board Director of Research, Kelly Brunkhorst, discusses the recent ruling on California's low carbon fuel standard. He also mentions what we might see happen in 2012.

To learn more about what is happening in the corn industry or to learn more about Nebraska corn, be sure to visit our website!

Thanks for watching!

Grains Council Corn Mission | Vietnam

By Kelly Brunkhorst, Director of Research for the Nebraska Corn Board

Read Part 1: Grains Council Corn Mission | Japan, here.
Read Part 2: Grains Council Corn Mission | China, here.

Vietnam to me is the wild card. They are price conscious buyers that are importing grains from many countries and with them being part of the ASEAN countries, they have FTAs with many suppliers. Currently they are importing feed wheat to fill in some of their corn needs. While in Vietnam, we meet with a trading firm (operated by a 28 year old), the ATO, feed manufacturer, and a swine operation.

Vietnam has a great desire to be self sufficient in meat protein for their country. This leads to great possibilities of grain exports into their market. In many of the meetings we heard about the expansion and profitability in the livestock sectors and with expansion in the 15-17% range.

One issue that we did have substantial discussion on at one meeting was in regards to fumigation and the requirement from the Vietnam government on the use of methyl bromide. We talked about the phase out of the use of this product and is something that needs to probably be followed up on.

The Trans Pacific Partnership was also raised in Vietnam with their concerns of lower priced meat imports competing with their domestic production. Swine is an expanding sector as is the aquaculture area.

Overall, Eastern and Southeastern Asia countries provide both a mature market in Japan, with a young and expanding market in China and Vietnam. Those countries that we visited with, including our stop in Korea, have concerns about the ability for China to significantly change the flow of corn. This has yet to be seen to a significant extent, but seems that the possibility is there.

Find more pictures on the online Flickr photo album, here.

Grains Council Corn Mission | China

By Kelly Brunkhorst, Director of Research for the Nebraska Corn Board

Read Part 1: Grains Council Corn Mission | Japan, here.

Due to a snowstorm, we were delayed out of Japan and spent an afternoon in Korea. This also caused us to cancel out on a day of meetings in China. In China, we met with the ATO office, a trading company and a swine operation.

Personally, China is this expanding country that raising a lot of questions. Since everything is so protected, production and stocks wise, you just wait. In meetings with the General Consulate and the ATO office, they described the potential ag imports into China as “immense”. This is due to a greatly and expanding middle class that is seeing meat consumption increase, along with spending. The city of Guangzhou is alone adding 20,000 cars per month to an all ready crowded transportation infrastructure.

But China is the type of country that just does what it needs to be ready. They are expanding ports for imports, buying farm land and investing in port export infrastructure and transportation infrastructure in foreign countries. The Consulate General said ‘beware’ as China is looking at the US next.

China is also expanding the livestock operations which also seemed to be profitable. They are importing swine and dairy genetics from various countries including the US. In regards to corn, the US is filling the market but China is working out quarantine issues with other countries to expand the possibilities. This is also the first market where we heard that they are importing US alfalfa and being used not only in the dairy sector, but also pelleted and used in aquaculture.

China is also looking at free trade agreements with Japan and Korea, but they seemed to be just in the infancy stage.

China is a relationship country and one were you need to establish a great relationships with the buyers and end users.

Find more pictures on the online Flickr photo album, here.

Grains Council Corn Mission | Japan

By Kelly Brunkhorst, Director of Research for the Nebraska Corn Board

I recently traveled with the U.S. Grains Council on the 2011 Corn Mission to Japan, China and Vietnam, which also included a stop in Korea. This blog will be one of three in a series about the mission, starting with Japan.

Over the nearly two weeks of the mission, we traveled approximately 20,000 miles, spent approximately 60 hours in an airplane or airport and saw four different countries.

Japan is a very formal country that has been a solid customer of US corn for a long time. We met with various trade associations representing the feed trade, starch and sweeteners and feed manufactures. We also had meetings with the ATO office, Ministry of Agriculture, Forestry and Fisheries and Zennoh. We had tours with Kushiro Silo (port facility), Tokachi Factory (feed manufacturer) and Oono Farm (beef cattle operation). These took place either in Tokyo or on the northern island of Hokkaido.

There seemed to be a common theme with the associations. First was the concern of future corn supply. They have begun to import from the Black Sea area, but still want the US to be a reliable supplier. It was great to have producers visit with them first hand about their outlook on yields and production. Secondly, the issue of protein came up constantly and took us all by surprise. We nearly apologized after the third meeting and they let us know that they have been bringing this issue up for over a year now. The third issue was around some anti-ethanol sentiment that utilized some of the same anti-ethanol statements we hear in the States. Last, the issue surrounding the 2009 corn quality is still brought up.

Japan is also the one country that we heard from on the mission that still imports a fair quantity of non-GMO (genetically modified) corn.

Within their livestock industries, they seemed to be profitable. The one beef operation was interesting. They were very transparent with the cost of production when making sales. The producers, both Holsteins and F1 crossed Holsteins and Waygu beef. This was a top-notch operation that sells the cattle under both a branded product and through slaughter facilities. Interesting that they feed the cattle out to around 1700 lbs and getting between $5000 - $7000 per head.

Japan is continuing to make improvements in their ports through an initiative to update them to handle the post Panamax vessels once the Panama Canal expansion is complete.

The last issue that was also brought up was the discussions of Japan entering into the Trans Pacific Partnership (TPP). Everyone that we discussed this with were against it, although some thought there may be some advantages to them, but didn’t outweigh the concerns.

Japan, as does Vietnam, has a big concern on China becoming a big importer of corn and how it may shift the dynamics in the industry.

Find more pictures on the online Flickr photo album, here.

Trade agreements offer opportunities for Nebraska, U.S. agriculture

Three trade agreements that had been stuck for several years finally made their way out of Congress this week, with both the House and Senate handily approving trade pacts with Colombia, South Korea and Panama.

All three have potential to increase the sale of U.S. agricultural products, from corn to beef.

“Trade is an important component of Nebraska agriculture. It provides good markets for corn and corn products,” said Tim Scheer, chair of the Nebraska Corn Board’s government affairs committee and a farmer from St. Paul, Neb. “Yet it is also critical for livestock producers, as a growing amount of U.S. beef and pork makes its way to markets around the world.”

The Nebraska Corn Board said it appreciates Senators Ben Nelson and Mike Johanns and Representatives Jeff Fortenberry, Lee Terry and Adrian Smith for voting to approve all three trade agreements.

“We appreciate the support of Nebraska’s Congressional delegation,” Scheer said. “Approving these agreements is critical for the competitiveness of Nebraska and U.S. corn and other agricultural products, especially considering that other countries already have trade agreements in place or are negotiating them. We can’t afford to step away from the table and lose market share.”

One place the United States has lost market share is Colombia – U.S. corn exports to Columbia fell significantly over the last three years, in part due to a 15 percent import duty on U.S. corn and trade agreements the country negotiated and ratified with our competitors. When added up, U.S. farmers have lost nearly 2 million tons of corn exports alone in the last three years that equates to more than $400 million. (See this post for more.) The Colombian trade agreement will help reverse that tide.

The example of Colombia is a good one – we can't just stand by when the rest of the world is expanding trade opportunities. It puts us behind the eight ball and at a significant disadvantage, and once markets are lost and trade patterns change, it can be a significant (and expensive) challenge to get them back.

Of course the trade agreement with South Korea is the centerpiece of all three – it's the largest single U.S. trace pact since the North American Free Trade Agreement in 1994.

While South Korea is already one of the top five corn export markets for the United States, it has potential to grow, as the free trade agreement provides that both feed corn and corn co-products receive duty-free treatment. In addition, tariffs on all refined corn products will eventually be phased out, creating new market access for corn sweeteners and corn oil.

Yet more important is the opportunity Korea offers for pork and beef. Significantly improved market access for beef, pork and other livestock products increases opportunities for Nebraska beef and pork producers and all those who raise livestock.

According to the U.S. International Trade Commission, annual exports of U.S. beef to South Korea are expected to increase as much as $1.8 billion once the agreement is fully implemented. Implementation will phase out over 15 years South Korea’s 40 percent tariff on beef imports, with $15 million in tariff benefits for beef in the first year of the agreement alone and about $325 million in tariff reductions annually once fully implemented. The current South Korean duty on pork bellies is 25 percent but will be eliminated on all frozen and processed pork products by 2014.

That's a big deal for Nebraska beef and pork producers – as trade adds about $120 in value to each steer or heifer processed and $40 to each hog.

Panama, meanwhile, is poised for growth in all areas and will be on a more level playing field as its neighbors to the north (Costa Rica, via CAFTA) and south (Colombia) who have trade deals with the United States. It also provide duty-free access for a set but growing amount of U.S. corn each year. It also eliminates a 30 percent duty on prime and choice cuts of beef – and phases out the others over time.

According to U.S. Department of Agriculture figures, Nebraska exported a total of more than $5 billion worth of agricultural products in 2010, including $1.3 billion worth of corn and other feed grains.