Market Matters Blog
Brazil Likely Leader of Corn Exports in Current Crop Year
While Brazil is positioned to surpass the United States in corn exports this year, the data doesn't indicate the trend leading to this development will necessarily continue, as the South American country faces many challenges when it comes to agriculture and trade, an ag economist said in a joint press conference hosted by the National Corn Growers Association (NCGA) and the U.S. Grains Council (USGC) on July 12.
NCGA Lead Economist Krista Swanson was joined at the press conference by U.S. Grains Council (USGC) Vice President Cary Sifferath, who addressed potential new markets that could be cultivated for U.S. corn growers.
"Brazil is on pace to surpass the U.S. in corn export quantity for 2022-23, a year with drought reducing U.S. corn production by 10% from the initial projection. Likewise, the severe U.S. production loss due to drought in 2012-13 also offered Brazil the lead in corn exports," said Swanson.
"Brazil's share of world corn exports relative to the U.S. has fluctuated up and down over the last decade. Exports of corn as grain are the primary focus, but exports of corn in value-added products including ethanol, DDGs, and livestock and meat products, are essential pieces of the U.S. corn market with opportunity for growth," she said.
"We've seen expansion of corn-based ethanol production in Brazil, which has been traditionally sugarcane-produced ethanol. Now, we're seeing corn-based plants that are corn-specific and other plants that can switch back to corn and sugarcane," said Sifferath.
Swanson also mentioned several infrastructure challenges in the attached Brazil white paper link, adding one of the infrastructure challenges for Brazil is the growing grain storage capacity deficit.
"The 35% increase in grain storage capacity from 2010 to 2022 hasn't kept pace with the 82% increase in grain production in that time," Swanson said. "In the current year, the difference in total grain production and storage capacity could exceed 4 billion bushels (bb). Because there are multiple harvests in many growing regions, there is a possibility to reuse storage, but forces clearout of the previous crop in what may not be optimal timing for the farmers."
"Brazil appears to be on the way to a year of record corn production, having received two estimates during the week. On July 12, USDA estimated a record-high 133.0 million metric tons (mmt) or 5.24 bb of production. On July 13, Brazil's Conab estimated 127.8 mmt, a lower estimate, but also a record high for the year and bearish influence on U.S. corn prices," noted DTN Lead Analyst Todd Hultman on July 14.
In a press release ahead of the press conference, NCGA stated that it called on Congress to double funding in the farm bill for important trade programs, such as the Market Access Program and the Foreign Market Development (FMD) Program. "MAP is designed to encourage development, maintenance and expansion of commercial markets for U.S. agricultural exports. FMD is a joint government and agri-industry effort to develop markets by acquainting potential foreign customers with U.S. farm products."
The final data on trade exports from both countries for the 2022-2023 market year will be released in September.
Here is the link to the white paper analysis and comparison of corn production in Brazil and the United States: https://dtn.box.com/…
Mary Kennedy can be reached at Mary.Kennedy@dtn.com
Follow her on Twitter @MaryCKenn
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