Page'U—Com Taik/lincasfef FWmlng,’' Sitlirtfay, IWrfch 7, ’1998 *
Cooling Of Foreign Markets Will Cut Grain Prices
RYLAND UTLAUT
President
National Corn Growers Association
As the Midwestern farmer
anticipates warm weather and
spring planting, the current
economic turmoil in Asia may
seen but a distant reality.
However, in today’s global
economy, what’s happening on
the other side of the worid hits
quite close to the farm.
The economic strength and
Value-Enhanced Corn Report
WASHINGTON, D.C.
“We have a commitment to
educate endusers about the
quality and reliability of U.S.
feed grains,” said Ken Hobbie,
president and CEO of the U.S.
Feed Grains Council
(USFGC). “One way in which
we meet that commitment is
with the 1996-97 Value-En
hanced Com Quality Report.”
“Originally, the VEC report
was developed for use in our
market development efforts in
Japan, where educational and
trade servicing efforts work to
increase customers’ familiarity
with the availability and qual
ity of specialty com grown in
the United States. We translate
the VEC report into Japanese
and this year have added a
Spanish translation as we have
seen the number of requests for
VEC information increase in
the Mexican and Latin Ameri
can markets. VEC is becoming
an important part of the export
equation profiting the U.S.
com grower at the same time
high-volume exports are a
critical part of the equation,
too.”
This year’s report shows that
traditional “specialty” corns
such as white, waxy, hard en
dosperm/food grade and high
amylose represent a small but
growing market for VEC.
High oil com, which has
grown from virtually no acres
in 1993 to an estimated
1,000,000 acres in 1997, is at
the moment the fastest growing
VEC product in the market
place. The market potential for
both high oil and nutritionally
dense com is very high, and
along with markets for speci
fied handling characteristics
such as low stress cracks, rep
resents the most significant
growth potential for the VEC
market.
The report also addresses the
quality of the 1996 crop. The
1996 U.S. com crop was 26
percent larger than the pre
vious year, due to a 13 percent
increase in harvested acres and
a 12 percent increase in yield
over 1995.
However, the near-record
crop did not reflect optimal
growing conditions. Average
harvest moisture levels in
creased from 18.5 to 22.4 per
cent in 1996. The larger com
crop and higher moisture con
tent caused an increase in the
volume of com dried both
on farm and commercially.
Lower test weights due to in
complete crop development in
some areas, were observed in
stability of our Asian trading
partners has a direct impact on
the continued prosperity of the
U.S. agricultural industry and
our entire nation.
American agriculture is
more than twice as reliant on
foreign trade as our national
economy as a whole, and agri
cultural exports now account
sample tests, shipment data and
survey responses; however,
these lower test weights were
not statistically significant for
white, waxy, and high amylose
com.
The report includes com
storage practices, with pro
ducer respondents indicating
the average length of on-farm
storage was six months. Steel
bins account for 89 percent of
respondents’ on-farm storage
capacity, and 87 percent of the
steel bins have aeration fans,
critical for maintaining com
quality during storage.
Farmer premiums for the
five value-enhanced varieties
sampled ranged from $.15-.30
per bushel for high-oil varieties
to $1 per bushel for high amy
lose com.
The Council retained Ag
Education and Consulting, Sa
voy, 111., to conduct the second
broad-based compilation of
test results and analysis of the
VEC market in the United
States, which included a com
prehensive survey of produc
ers, elevators, and companies
who produce and merchandise
value-enhanced com varieties
such as white, high-oil, high
amylose and others.
FERTRELL GOLD
SPECIAL STARTER
Speically Formulated A:
Starer Or
“Pop Up” Fertilizer For
Of Crops Especially Co
Small Grain
Just Ask For Fertrell
Representative To Devi
Personalized Fertilizer
For You.
Harry Barner, Lamar, PA
717-726-3275
Bill Barr, Meadville, PA 814-337-7219
_ , _„ . . „ Glenn Martin, Hagerstown, MD
Randy Botteicher, Belleville, PA 3QI 733 0796
717-667-3503
Doug Bratt, Memphis, NY
315-635-6800
Allan Buddie, Interlaken, NY
607-532-4213
Bob Ellis, Lewisburg, PA
717-568-0530
for 30 percent of U.S. farm
sales. One out of every five
rows of U.S. com takes a trip
overseas. And com growers
depend on strong export mar
kets not just for the grain we
grow, but for value-added com
products such as meat, dairy,
poultry, com gluten feed, bio
degradable plastics and com
syrup.
Robust international mar
kets are especially important in
this era of market-oriented
farm policy. The domestic
market for U.S agricultural
products is relatively mature
and slow growing. Meanwhile,
export markets are growing
more than three times as fast as
domestic demand, making
them a key to the future health
and expansion of the U.S. agri
cultural economy.
Not only is Asia the largest
market for U.S. farm exports, it
is also where demand had been
expected to grow most. Last
fiscal year, Asian nations pur
chased $23.8 billion, or nearly
42 percent, of the $57.3 billion
in agricultural products ex
ported by the United States.
South Korea, Indonesia, Ma
laysia, Thailand, and the
Philippines some of the
countries hit hardest by the
continued turmoil in currency
markets account for 10 per
cent of our agricultural sales
abroad. In these five countries,
the adverse impact of the finan
cial crisis on U.S. farm exports
in 1998 is “conservatively esti
mated” at $5OO million, ac
cording to the U.S. Department
of Agriculture.
While it’s too soon to tell
what long-term effect the
Asian situation will have,
we’ve already begun to feel the
ripples from across the Pacific.
These include some deteriora
tion in com prices. The price
Robert Riegel, West Lawn, PA
610-670-0154
Bob Waltimyer, Turbotville, PA
717-437-3833
Robert Trumbull, Fort Plain, NY
518-993-3452
11,(D®im mi miwo
_NS y PENNSYLVANIA MASTER CORN GROWERS ASSOC., INC.
for the March com contract
slipped below $2.60 per bushel
just prior to the January USDA
reports, down about 25 cents
from early December. Export
prospects for com and other
coarse grains have also dimin
ished.
USDA now predicts that we
will export 1.75 billion bushels
of the 1997 U.S. com crop. But
that estimate is down 125 mil
lion bushels from a month ago
and 2.5 percent from last year,
a decline that is directly related
to the upheaval in Asia. The
situation poses problems that
extend beyond grain. In the re
cent past, the economic success
of the Asian Tigers contributed
to a higher standard of living
for consumers in the region. As
a result, meat and poultry con
sumption increased, creating
more demand both for U.S.
livestock and poultry and for
U.S. grain to feed livestock
raised in Asia. But now, belt
tightening in Asia is bound to
reduce consumption across the
board. In its most recent supply
and demand reports. USDA in
dicates that export prospects
for beef, pork and poultry have
already dimmed because of
poor economic conditions and
the dollar’s strength against
Asian currencies.
So what does this mean to
U.S. fanners and consumers?
President Clinton’s 1992 cam
paign slogan was right: “It’s
the economy, stupid” the
global economy. It doesn’t
matter whether you’re talking
about Seoul or Sioux City, Ja
karta, or Jefferson City we
cannot afford to bury our heads
in the sand. We need to support
prudent policies that help be
leagured Asian nations get
back on their feet and also en-
315-784-5093
sure long-term economic sta
bility in the region.
Toward this end. USDA has
already extended export credits
to boost sales of U.S. agricul
tural commodities to the region
and the IMF has made its loan
packages contingent upon
broad institutional reforms, in
cluding deregulation of trade in
agricultural products.
In the next few months, iso
lationists will question the
need for continued U.S. invest
ment in the IMF. While this
might normally be tough for
farm country and Main Street
to support, our own livelihoods
may depend on the ability of
the IMF to respond in times of
economic crisis.
We have a choice. We can
support efforts to speed recov
ery of the Asian economies in a
manner that will lead to further
liberalization of trade. Or we
can look the other way and let
these nations erect trade bar
riers and dump products on
world markets in a misguided
attempt to export their way out
of crisis. Either way you cut it,
the economic fate of our Asian
neighbors is inextricably
linked to our own.
Agriculture Secretary Dan
Glickman summed it up re
cently at the Oxford Farming
Conference in England: “As
we step into a new century, we
are crossing into a world where
economic regulations are re
placing military relations as the
primary means by which coun
tries deal with one another. The
more we grow our economies
in tandem, the more peaceful
and universally prosperous our
world will be, and the stronger
customers we will have. No
where is this more true than in
agriculture.”
717-726-6889
Ed Witter, Gardners, PA
717-562-83989
Paul Zimmerman, Lititz, PA
717-733-7674
Cochranton Co-Op, Cochronton, PA
814-425-7401
Meadville Farms Garden,
Meadville, PA 814-724-1064
North Slope Farms, Pleasant, PA
717-448-2374