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In the global export marketplace, US corn is king. But that may soon change, according to Phillip Abbott, an agricultural economist at Purdue University. He says US dominance in the global corn market is waning as foreign nations that previously relied on the US for corn are growing their own or buying from other countries.
“The US has historically been a very important part of the international corn market,” Abbott says. “Prior to the 2007-08 food crisis and spike in commodity prices, the US 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.”
USDA statistics support Abbott’s argument—they estimate a decrease from 2.4 billion bushels of corn exported in 2007-08 to just 1.1 billion in 2012-13.
Why such a drastic drop? Abbott offers a few reasons, and first on the list is ethanol. The Renewable Fuel Standard mandates gasoline sold in the US be mixed with ethanol, and mixing requirements will increase next year from 13.2 billion gallons to 13.8 billion gallons. That means less corn available for non-ethanol uses, including foreign buyers and US livestock producers, which pushes prices higher.
Secondly, the US has lagged behind as other nations have significantly increased their corn acreage. “We haven’t expanded overall planted area like the rest of the world. Our acreage is basically flat,” says Abbott. Compare that to South America where acreage has increased 53 percent since the late 1990s, or the former Soviet Union where corn acreage is up 24 percent.
US corn exports were also hurt by a summer drought. The USDA estimates corn production will be down 13 percent from 2011, to 10.7 bushels, which would represent the lowest level since 2006.
“All the hard work we did to build export markets has been hurt by the high commodity prices of the last four or five years,” Abbott says. “As a result, the world has figured out ways to meet their own needs. And with a couple exceptions like China buying more soybeans, we’re probably going to see weaker export demand in the future.”
The Food Defense Strategy Exchange (FDSE) is a forum for food defense professionals to interact and share their knowledge and experiences. At the most recent FDSE, a poll of attendees revealed that approximately two-thirds were either re-evaluating their existing food defense plan, or implementing new food defense plans. In this podcast, Don Hsieh, Director of Commercial and Industrial Marketing at Tyco Integrated Security, discusses this topic and other findings from the exchange, and offers some best practices to proactively protect a company’s brand from food adulteration.
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