Trade agreements a good deal for U.S. feed grains

U.S. Grains Council
Corn awaiting market is piled up outside a full grain elevator in Virginia, IL.

Trade equals huge success for exports of U.S. feed grains in all forms, particularly to the 20 countries with which the United States has a free trade agreement (FTA).

Exports of feed grains in all forms to FTA partner countries have increased by nearly 24 percent over the last 10 marketing years (2006/2007 to 2015/2016), according to U.S. Department of Agriculture (USDA) trade data and analysis by the U.S. Grains Council (USGC).

Last marketing year (2015/2016), exports of feed grains in all forms to FTA partners saw a record high of more than 49.6 million tons (1.95 billion bushels).

The preferential trade terms included in the 14 FTAs the United States has in place with 20 international markets have helped lead to these significant increases during their tenure.

U.S. exports of feed grains in all forms

FTA partners now represent 49 percent of total U.S. exports of feed grains in all forms. In terms of quantity, the spread between exports to FTA partners compared to non-FTA partners has shifted dramatically from a negative 2.8 million metric tons in 2006/2007 to a positive 12.7 million tons in 2015/2016. This comparison excludes China, which has a growing role in the global marketplace that has significantly shifted throughout this time. China has increased its share of U.S. feed grain in all forms of exports from 2 percent to 14 percent during the past 10 marketing years.

After eight months of the 2016-17 marketing year, this upward trend continues with exports of feed grains in all forms to U.S. FTA partners up 27 percent compared to the same time last marketing year.

A mile-long grain train is loaded with more than 20 million pounds of spring wheat at an elevator in Sterling, N.D.

Shipments of U.S. corn have risen by 36 percent from the same time last year to FTA partners. With annual increases to tariff-rate quotas (TRQs), U.S. exports of corn have preferential treatment in these markets. U.S. corn exports to South Korea have increased more than four-fold to 4.12 million tons (162 million bushels). Shipments to Morocco have increased nearly nine-fold to 752,000 tons (29.6 million bushels). Shipments of U.S. corn to Peru rose by 44 percent from the same time last year to 2.1 million tons (83.2 million bushels). Other notable increases of corn exports to FTA partners include the Dominican Republic, Chile, Mexico, Costa Rica and Jordan.

A semi unloads at Fox River Valley Ethanol plant near Utica, WI.

U.S. ethanol exports to the 20 FTA partners have gone up 21 percent year-over-year from 250 million gallons to 302 million gallons (2.26 million to 2.7 million tons in corn equivalent). Canada has remained a strong buyer of U.S. ethanol with an increase of 39 percent to 207.8 million gallons (1.88 million tons in corn equivalent). U.S. ethanol exports to Peru have climbed 45 percent year-over-year to 32 million gallons (290,000 tons in corn equivalent). Shipments to Colombia have increased nearly five-fold to 5.3 million gallons (48,000 tons in corn equivalent).

Exports of distiller's dried grains with solubles (DDGS) are up 18 percent year-over-year to FTA partners. Shipments to Mexico are up 12 percent to 1.56 million tons from the same time last year. Exports of U.S. DDGS to South Korea increased 27 percent year-over-year to 677,000 tons. U.S. exports to Israel rose 32 percent from the same time last year to 151,000 tons. Shipments to Colombia increased by 31 percent year-over-year to 138,000 tons. Shipments of U.S. DDGS to Morocco have increased by 82 percent, year-over-year, to 134,000 tons.

The terms of the North American Free Trade Agreement (NAFTA) also continue to underpin sales of U.S. sorghum and barley. Exports of U.S. sorghum to Mexico are up 4 percent, year-over-year, to 402,000 tons (15.8 million bushels). Shipments of sorghum to Canada rose by 9 percent from the same time last year to 3,800 tons (149,000 bushels). Shipments of U.S. barley are up 97 percent to Canada, year-over-year, to 42,000 tons (1.9 million bushels).