Minnesota Corn Growers Association

 

U.S. agricultural exports were not immune to the COVID-19 pandemic, as demand abroad slowed for corn, ethanol and ethanol co-products. However, a late summer rally has produced optimism with new crop sales peaking, according to U.S. Grains Council CEO Ryan Legrand.

LeGrand said the amount of new crop purchases at this point in the year are much higher than typical, even forcing the U.S. Department of Agriculture to revise their export forecast. The increased demand for new crops has largely been driven by China, which has accounted for more than 50 percent of new crop sales. China already has six million tons of new corn purchases on the books.

The domestic demand for corn in China is at peak levels, according to LeGrand. Each week the country holds an auction of 4 million tons of local corn supply. While much of that quantity has went unused historically, the amount has sold out each week. LeGrand said he expects China to continue to be a major U.S. corn customer.

“China has options, but the United States has affordable corn and we can ship it reliably year after year. They are going to continue to come back to who is most competitive there, and I believe that will be our benefit.”

While the 2019/2020 export year for corn will be below normal overall, China’s entry into the market combined with the steady purchasing power of longtime customers like Mexico, Japan and Korea, has produced positive momentum of late.

Prior to COVID-19, ethanol exports were once again breaking year-over-year sales numbers, but after 100 million gallons of ethanol exports in April, only 67 million gallons went out in May followed by 78 million in June. LeGrand is optimistic July and August export numbers will continue to rebound, which would still make the 2019/2020 marketing year the third highest for ethanol exports on record.

Dried distillers grains (DDGS) also continue to grow in popularity abroad, with the Southeast Asia region offering the most potential. An ongoing lawsuit has prevented DDGS from entering the China market, but LeGrand hopes to soon have that resolved.

“China would import three to five million tons of DDGS without blinking an eye, so we need that market back,” he said. 

Minnesota corn farmers’ check-off investment supports the strategic partnership with the U.S. Grains Council and their efforts to maintain and grow export markets for Minnesota-grown corn. Since 2005, the value of Minnesota’s corn exports has doubled. Learn more at grains.org.