Day: February 19, 2019

Prospects for Corn Trade in 2018/19 and Beyond

Ben Brown

Department of Agricultural, Environmental, and Development Economics

The Ohio State University

February 15, 2019

 

The agricultural industry is a global economy with buyers (consumers), sellers (producers) and traders. In the United States, producers of corn have a comparative advantage- the ability to produce it cheaper per unit or at higher quality- over most other parts of the world. However, genetics, changes in weather patterns, land limitations, politics and global gross domestic product affect quantities of production and consumption.

Long-term trade projections for U.S. corn published by the Economics Research Service of the USDA look positive due to the expected rise in world GDP and population; however, increases in competition from other exporting countries continue trending toward a decrease in United States’ share of world exports. Trade negotiations between the U.S. and China are in the middle of a 90-day trade truce, which ends the beginning of March. It is uncertain what, if any, resolution will surface before or at the deadline. In December 2018, commodity indices declined before the previous trade deadline, but rallied at the announcement of the 90-day extension. Long-term projections include a continuation of current policies, accounting for tariffs from Mexico, the European Union, Mexico and Canada.

The USDA World Production Report, published February 8, 2019, puts the size of the 2018/19 world corn crop at slightly more than 43 billion bushels. With production in the United States estimated at 14.4 billion bushels, any reduction in world supply will come from Brazil’s short season corn crop.

Long-term trade estimations for world corn continue to see growth, with corn trade expected close to 163 million metric tons in 2018/19, up from 147 million metric tons in 2017/18. This increase in trade comes from expected strong corn production in Argentina and Brazil after last year’s drought.

Figure 1: World Corn Exports

 

 

 

 

 

 

 

 

 

Figure 1 illustrates world corn exports for marketing year 2017/18 through projections for 2028/29. The U.S. remains the largest exporter of corn to the world and increases almost 8 million metric tons or 13% by the end of the projection period. Major changes in corn export absolute values (million metric tons) come from Brazil (20.3), Argentina (8.8), and Ukraine (10.3). Percentage growth shows emerging producers like Europe (234%) increasing their exports from a relative low position. Growth in exports from these countries threaten the share of U.S. global corn trade. Figure 2 shows the growth in U.S. corn exports projected, but also the declining share of global corn trade.

Figure 2: U.S. Corn Exports

 

 

 

 

 

 

 

 

 

U.S. corn exports are projected to rise from almost 62 million metric tons (2.4 billion bushels) to almost 70 million metric tons (2.7 billion bushels) and show the continued growth in production and demand for U.S. corn abroad.

Associated with every seller (exporter) there has to be a buyer (importer). With the growth in world exports, there is also a growth in world imports to make the accounts balance. Mexico remains the largest purchaser of corn at 16.2 million metric tons (638 million bushels) with an estimated growth of 7 million metric tons (276 million bushels) by 2028/29. Currently, Mexico represents roughly 11% of the global corn trade. Regarding corn imports, a larger number of countries buy relatively smaller amounts of product compared to the smaller number of exporters who sell larger quantities of product.  For exporters, the U.S., Brazil and Argentina represent 73% of the world total. Still the small importing corn countries represent a significant role in world trade.  Figure 3 illustrated world share of corn imports and growth through 2028/29.

Figure 3: World Corn Imports

 

 

 

 

 

 

 

 

 

Growth (million metric tons) in Mexico (7.1) accompanied by Vietnam (6.1), Egypt (5.1), South Africa (5), Iran (3.2), and China (3.2) make up the majority the of estimated world import increase through 2028/29.

Looking at U.S. corn exports for the current marketing year, (September 1, 2018 through August 31, 2019), corn exports started strong compared to past marketing years, but have slowed the past few weeks. The government shutdown that started December 22, 2018 and ran through January 25, 2019 has delayed corn export data, but weekly totals through the end of December are available and represented by Figure 4.

Current USDA estimates place U.S. corn exports for marketing year 2018/19 at 2.45 billion bushels up from 2017/18 at 2.438 billion bushels. Through the last week of December, corn exports came in 53% higher than the same week a year earlier. However, the rate of exports slowed in December. To meet the USDA estimate, the export volume for the next 35 weeks would need to average 47 million bushels a week. The weekly average in December came in at 38 million bushels per week. This does not mean the U.S. cannot meet the estimated export volumes, but increases in weekly sales will have to match the increase seen in 2015/16 during the second half of the marketing year.

The potential for increased sales in the second half of the marketing year look limited at the current time. Outstanding sales for the current marking year sit close at just over 512 million bushels. This is 15% below the three-year average, which includes marketing years 2015/16 and 2017/18, noted as having strong exports in the second half of the year. Exports in 2017/18 benefited from a low U.S. corn price, driven down by retaliatory tariffs on U.S. soybeans from China and a 14.4 billion bushel crop.

Figure 4: U.S. Corn Exports

Growth early in the current marketing year occurred thanks to some of the same countries mentioned above as being large key markets for future world trade. U.S. corn exports to Mexico were up 69 million bushels from a three-year historical average. Other areas of strong growth in U.S. corn exports were to Japan (56 million bushels), Korea (43 million bushels), Taiwan (23 million bushels), and Columbia (19 million bushels). Sustained values within these countries and growth from other areas will be needed to meet the USDA estimate.

Due to the lapse in federal funding, weekly trade information provided by the Foreign Agricultural Service of USDA is only current through the last week of December. However, grain inspections through February 7 indicated that corn exports are averaging 37. 4 million bushels each week to start 2019. In December, federal inspections were roughly 7.4% below USDA export values weekly. Assuming this margin holds, weekly sales could be equal to 40.1 million bushels, still well below the average needed to hit USDA’s estimate for 2018/19. An export value of 2.425 billion bushels seems more likely at the current time.

The future of U.S. corn exports look strong in future years supported by growth in domestic production and growing desire for corn consumption abroad. Increases in international competitors continue to decrease the U.S. percentage in world corn trade. Corn exports started strong for marketing year 2018/19, but will need to increase pace to meet the current USDA estimate of 2.45 billion bushels.

 

References

United State Census Bureau. “Weekly Export Inspections”, February 7, 2019.

United States Department of Agriculture-Economic Research Service. “Long-Term Term Trade Projections”, February 14, 2019.

United States Department of Agriculture- Foreign Agricultural Service. “Exports Sales Query”, February 15, 2019.

United States Department of Agriculture- World Agricultural Board. “World Agricultural Supply and Demand Estimates, WASDE-578, February 8, 2019.

Caring for Your Amaryllis

Submitted by Faye Mahaffey

OSUE Brown County Master Gardener Volunteer

 

Have you received any plants for a holiday gift? A “non-gardening” friend of mine called this week asking what to do with her newest present – an Amaryllis. She was sure that this plant would meet the same untimely “death” joining all her other houseplants in plant heaven. I assured her that she could enjoy this showy plant and with proper care, enjoy it next holiday season as well.

The Ohio State University’s horticulture website, www.plantfacts.osu.edu, provides the following information about an Amaryllis:

The large, showy, lily-like flowers of the Amaryllis make great indoor potted plants during the winter holiday. Choose a container an inch or two larger in diameter than the base of the bulb and at least five inches deep; this plant likes to be a bit pot bound. The container should have a drainage hole in the bottom. Fill the containerwith a loose mix of two parts potting soil and one part Perlite.

Plant the bulb so that the top half or two-thirds of the bulb is above the soil level. Try to spread the roots apart slightly in the soil mix as you are planting. After planting, water the soil mix thoroughly so that water drains out of the container.

Place the potted bulb in a warm (70 – 75 degree F) and sunny location for growth to begin. Water as the soil mix becomes dry to the touch; if the mix is kept too wet, the bulb may rot. As the roots grow and fill the pot, the mix will dry more quickly, and you will need to water more frequently.

Six to eight weeks after planting, the plant should be in bloom. Larger bulbs may produce two or three flower stalks. Generally, the flowering stalk will appear before leaves do, but not always. Once growth has begun, rotate the container daily to prevent the flower stalk from leaning toward the light source. Occasionally, the flower stalk will need to be staked to keep it from falling over.

 

Cooler temperatures will contribute to a stockier and sturdier plant, so after growth begins, move the plant to a 60 – 65 degree F location. At this point, begin to fertilize the plant with a soluble potted plant fertilizer (5-10-5, 6-12-6, or equivalent), and do so every two weeks.

When the flower bud begins to open, take tweezers or small scissors and remove the anthers before they open and shed pollen, which will extend the bloom period by several days.

After the flower fades, remove the flower stalk by cutting it off near the neck of the bulb. Do not remove any foliage – the leaves are needed for photosynthesis to produce food for rebloom the following season. Keep the plant in a sunny location and water as needed.

Keep up on watering and fertilizing until mid-May. The plant can be placed outside about the third week in May, so begin the acclimation process about a week before. Gradually acclimate the plant by increasing exposure from shade to full sun over a week’s time. It will need full sun exposure in well-drained, fertile soil.

The bulb can be removed from its container and can be planted in the ground, which seems to produce better results regarding flowering next winter. Another option is to sink the plant in its container in the ground or leave it in the container set on top of the soil surface. Whichever method you choose, keep the plant well watered and fertilize about every two weeks with a liquid fertilizer that has a high phosphorus content (such as a 10-20-10). The plant should produce more foliage and will set its flower buds over the summer months.

September is the time to think about bringing the bulb back inside before night temperatures consistently fall into the 50’s. If the bulb was planted in the ground, dig it up and wash off the soil. If the bulb was growing in a container outside, bring it indoors, pot and all. In either case, allow the bulb and foliage to dry off naturally; foliage can be cut off when it turns brown and falls over. Bulbs will need to go through a resting period of about four months; store in a cool, dry area, near 40 -45 degrees F. After the resting period, pot bulbs in new soil and begin to grow them for the winter season.

My Amaryllis is in full bloom and is gorgeous! I have a friend on Facebook that has been posting her multiple plants in full bloom and all her friends are a bit worried about her new “obsession!” At last count, she has at least 20 Amaryllis (that she has admitted to). One plant suffered an upset at the paws of her indoor cat, but I think it survived!

Don’t forget to mark your calendars for our Pollinator Education Series being held on March 12 and March 13. Denise Ellsworth, OSU Program Director for Honey Bee and Native Pollinator Education, will conduct the Pollinator Advocate Certification training on March 12 at the Clermont County Fairgrounds 4-H Hall in Owensville, Ohio from 1:00 p.m. to 3:00 p.m. You need to register for this free training by calling the Clermont County Extension office at 513-732-7070.

Later that evening at 7:00 p.m. Denise will talk at the monthly meeting of the Brown County Beekeepers Association in the Community Room of the Western Brown High School in Mt. Orab, Ohio. She will talk about Phenology for beekeepers, which will be helpful to gardeners as well. This program is free and open to the public.

On March 13, Gardening for Pollinators will be the subject of the seminar being held at the Brown County Fairgrounds (Rhonemus Hall), in Georgetown, Ohio from 7:00 p.m. to 8:00 p.m.

We know, as gardeners, that we play a vital role in the development and conservation of habitat that benefits pollinators. Come learn practical steps gardeners can take to create or enhance habitat, including plant selection and simple design elements.

We are still enduring the crazy weather ups and downs. Cold, wet, frozen, un-frozen, you name it, it is happening! How many days until spring?