WISCONSIN DELLS, Wis. – China, Mexico and Canada have been and will likely continue to be the largest export markets for U.S. soybeans, corn and pork. But U.S. commodity groups aren’t putting all their eggs in one basket – or even in three baskets. Representatives from three industry organizations recently discussed market potential, meeting at the Wisconsin Corn and Soy Expo.
“No single market will replace soybean exports to China,” said Paul Burke, senior director of U.S. soy-marketing programs at the U.S. Soybean Export Council.
The United Soybean Board expects soybean demand to gradually increase in China, but it’s looking at other export opportunities, he said. The organization is doubling down on India, the Indian subcontinent and northern Africa. India and Pakistan are the fastest-growing markets for soybeans. And the third-largest market for soybeans is Egypt in Africa, he said.
Before the trade war began, China imported more than 70 percent of U.S. soybeans for five consecutive Octobers as well as six of the previous seven. Then in 2018 – when China retaliated against U.S. tariffs on imports – exports declined from $2.7 billion to $97 million. The percentage of U.S. soybean exports to China declined from more than 70 percent to 5 percent, according to “Forbes.”
The United States in the 2018-2019 crop-marketing year – Sept. 1 to Aug. 31 – exported about 14 percent of its corn to more than 73 different countries. The best-three markets for U.S. corn were Mexico, Japan and Colombia, according to the U.S. Grains Council.
Ethanol trade to India expected
Ryan LeGrand, president and CEO of the U.S. Grains Council, said India now represents promising potential for U.S. ethanol. The country’s officials have shown openness to importing ethanol for the consumer market. Before that India allowed ethanol to be imported for industrial-fuel purposes only, he said.
U.S. ethanol exports to India totaled $271 million in the 2017-2018 marketing year. Exports increased 37 percent to $243 million for the first eight months of the 2018-2019 marketing year, according to the U.S. Grains Council.
Southeast Asia also could be a growing market for U.S. grains. Vietnam’s economy is growing at annual rate of 6 percent to 7 percent. Myanmar’s economy also is increasing.
Darren Armstrong, chairman of the U.S. Grains Council and a farmer from North Carolina, participated in January in a trade mission to Southeast Asia.
“Witnessing the technological advancements of the Vietnamese industry and the growth expectancy of feed demand in Myanmar allowed industry leaders to gain the perspective of our customers and end-users on the ground in Southeast Asia,” he said.
Pork producers target Asian markets
The United States exports about 25 percent of its pork production. Canada and Mexico comprise 40 percent of U.S. exports. Japan and China also are large markets. But the United States, which withdrew in 2017 from the Trans-Pacific Partnership, lost market share in Japan to several competitors. Several of those countries are members of the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The European Union also formed a trade agreement with Japan in early 2019.
Exports to Central America and South America helped the United States in the aftermath of losing market share as a result of withdrawal from the Trans-Pacific Partnership.
“And we’re now looking to open markets in Philippines and Thailand, both large pork-consuming countries,” said Maria Zieba, director of international affairs for the National Pork Producers Council.
The United States is still waiting for retaliatory duties for pork to be removed by China. China reduced retaliatory tariffs for pork from 68 percent to 63 percent but other exporting countries are paying just 8 percent tariffs, Zieba said.