Sometimes a simple number tells a big story.
If one examines global corn supply and demand since 1990, non-U.S. production exceeded 90 percent of non-U.S. consumption in only five of the 16 years from 1990/91 through the 2005/06 marketing year.
Since 2006, however, non-U.S. production has topped the 90 percent threshold for six consecutive years.
“Think of it as increasing global self-sufficiency,” explained Erick Erickson, U.S. Grains Council director of programs and planning.
Non-U.S. demand continues to rise rapidly, prices remain high, and non-U.S. producers are responding. All of this puts pressure on U.S. market share.
Erickson directed special attention to three major competitors.
Brazil has a corn supply and demand picture not unlike the U.S., with a robust internal market absorbing the bulk of production but with a healthy surplus available for export.
Argentina and the Ukraine, however, export over half their crop. They are producing primarily for export, and they continue to ramp up production in response to high grain prices in international markets.
“Global demand is also proving to be highly resilient, despite high prices,” noted Erickson.
The fundamentals are clearly sound, as the growing global middle class continues to demand an improved diet despite higher prices.
Even with some substitution, principally of feed wheat, global corn demand continues to grow at a robust pace — and producers around the world are responding.
Given strong fundamentals, Erickson called for a focus on the long-term: a commitment to long-term reliability and innovation; development of stable, long-term partnerships; investment in infrastructure to handle growing demand; and a recognition that trade is ultimately a “group sport” — that a stable, predictable, transparent and open trade system is in the long-run preferable to short-term focus on isolated national interests.
“A rising tide lifts all boats,” he said, and given strong long-term fundamentals, the Grains Council will continue to uphold its historic commitment to trade expansion.