Corn Export Market Share has Changed Rapidly Since the U.S. Ethanol Mandate
The U.S. is losing its long standing position as the world’s corn export provider. In the above graph, the shrinking blue area represents the shrinking U.S. global corn exports. Twelve years ago, Argentina was the only other major corn exporter, but now Brazil, the Ukraine, and India have joined the race. Higher global corn prices have encouraged production around the world.
The corn ethanol mandate which creates demand for forty percent of the U.S. corn crop makes our corn less competitive on the global market because increased domestic demand drives up the price here in the U.S. Add in the drought condition last year, and this becomes even more pronounced.
The graph up top includes the U.S., whereas the next one only includes our competitors.
This graph shows export share excluding the U.S.
From this visual, we see even more clearly how BRIC nations have stepped in to gain corn export market share as we’ve dropped lower. The mid-2000′s, when our ethanol mandate started to significantly increase demand for corn, coincides with the time that other nations were able to really increase their export market share.
Of course the U.S. dollar’s value matters in trade, too. In the race to the bottom, some analysts are expecting it to devalue further this coming year which would help our Ag exports overall.
Global corn stocks are fairly stable, but ending stocks are very low here in the U.S., as shown below. Some U.S. corn consumers met demand by importing corn last year.
Many meteorologists are anticipating a dry season again in the Midwest in 2013. Soil moisture levels are very low and snowfall this winter has not significantly added to soil moisture in most regions.
For consumers, this scarce and higher priced corn simply means that “beef is the new lobster” and you had to pay thirteen percent more for the chicken wings you served at this year’s Super Bowl party as compared to last year.