Though the words “trying times” have become the anthem for 2020, there’s a different message catching on in the agriculture industry.
While some anxiously wait to see if China will manage to fulfill its Phase 1 commitments, many ag experts are focused on the new — and unexpected — success stories of North American exports this year. Ironically, one of those successes is due almost entirely to COVID-19.
“In April, we saw a large increase of Mexico’s imports of ethanol, from an average of about 3 million gallons to 15 million gallons,” said Cary Sifferath, senior director of global programs for the U.S. Grains Council, adding that the massive surge in ethanol exports for hand sanitizer production continued through May and June.
Mexico wasn’t the only country on the U.S.’s ethanol highlight reel, though. According to Sifferath, a strengthening relationship overseas has netted India as the third largest importer of U.S. ethanol, a position the country has sustained for the past four years. He added that ethanol, as well as DDGs, are top priorities of the ongoing trade agreement negotiations between the U.S. and India.
Ethanol joins a healthy list of other exports that still experienced a good year despite coronavirus setbacks.
In the protein industry, variety meat exports are one of the shining stars to Joe Schuele, communications vice president of the U.S. Meat Export Federation.
During the virtual 2020 Kansas Ag Summit in August, Schuele said recent media claims that the U.S. meat industry prioritized export markets over domestic consumers during onset of the coronavirus pandemic was “a misguided notion”.
“It really ignores the impact that exports have on production,” Schuele said. “If you look at our pork industry, for example, if we weren’t exporting hams and picnics and other items to Mexico … ground seasoned pork and loins to Japan … variety meats to China — if we didn’t have those outlets for those items, our pork industry simply would not be the size that it is today.”
He added that beef variety meats like tongue, lips, liver and tripe, which have relatively no demand in the U.S., are also shipped in massive quantities to countries like Japan, Mexico, Egypt and Asia.
Furthermore, he added, meat cuts that are widely popular in the U.S. — such as pork belly — are not exported nearly as heavily, to successfully supply domestic demand.
“In order to have all of that bacon, and those ribs and those center cut pork chops that U.S. consumers enjoy, you need to ship a lot of products to other markets,” he added. “Our ability to ship those underutilized cuts in large quantities to our foreign markets is very helpful in driving production in the U.S. pork sector.”
Schuele said that the U.S.-Japan trade agreement has also been a lucrative bright spot for U.S. agriculture. Going into 2020, he said the U.S. was poised to have a $4 billion export year in Japan. Though COVID-19 has slowed that progress, he said the industry still expects a strong second half.
While there are still unknowns regarding trade agreements with China, Mexico and Canada, Sifferath said experts remain optimistic due to the vast amount of commerce between the countries. He reported that Mexico continues to be the U.S.’s No. 1 export market for corn, DDGs, barley and barley malt, and No. 2 for sorghum.
Sifferath said in his 27-year history with U.S. Grains Council, he’s heard the question innumerable times: “When will China become a major corn importer?” But, he said, despite the potential Phase 1 shortfalls due to COVID-19, China’s grain imports have historically shown positive growth: Since 2013, China has consistently imported 15 million metric tons of feed grains, with corn representing over a third of that total in 2019-20.
Schuele added that although China will likely reestablish its African swine fever-ravaged hog supply by 2022, the country is currently importing unprecedented amounts of protein — an opportunity of which U.S. pork has taken full advantage. The corn and sorghum industries have also seen an influx on exports, as Chinese producers are shifting away from inferior feeds while rebuilding their herds.
“While we are pleased to be able to capitalize on this expanded opportunity for U.S. pork in China, we certainly want to remain diversified and have growth occurring in a variety of markets and not have all of our export growth attributed to China,” Schuele said. “That’s something we are very much emphasizing.”