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Corn’s Eroding Market Share

Corn’s Eroding Market Share

Corn is one of Nebraska’s leading commodity exports consistently jockeying with soybeans and beef for the state’s top export commodity. Since 2014, Nebraska corn exports have exceeded $1 billion every year but one, setting a record of $2.3 billion in 2021. And, over the past five years, the value of exports as a share of producers’ revenue from corn averaged 22 percent. Exports are integral to the profitability of Nebraska corn producers. But recent trends in global markets might be a cause for concern.

Nebraska’s export success stems from the United States having been the world’s largest corn exporter. However, the United States is no longer the force in world corn markets it once was. A farmdocdaily article authored by agricultural economists at the University of Illinois and the Ohio State University says the United States accounted for 60 percent of the world’s corn exports in the mid-2000s and Brazil averaged about 6 percent. Last year, though, Brazil surpassed the United States accounting for 30 percent of the global export market. Brazil’s corn exports topped the United States just twice before: in 2013 following the 2012 drought; and during the trade war with China in 2019.

The authors mention two factors behind Brazil’s growing export prowess versus the United States. First, Brazil’s export growth coincides with production increases in second-crop corn (safrinha) harvested in June-August. The second-crop corn accounts for 75 percent of Brazil’s production and improved Brazil’s competitiveness in world markets. As a result, Brazil’s exports have grown significantly over the past two decades from 198 million bushels in 2004 to 2,200 million bushels in 2023. Exports from the United States, on the other hand, have largely stayed the same.

The second factor is a trade agreement between Brazil and China relaxing many of China’s phytosanitary requirements on Brazilian corn. China is the world’s largest corn importer and has increasingly turned to Brazil to supply its needs. The farmdocdaily article says nearly 85 percent of Chinese imports between September and December last year came from Brazil. And the trend continues in 2024. The Van Trump Report last week reported Chinese corn purchases from Brazil in January and February increased more than 175 percent compared to the prior year while purchases from the United States were down more than 65 percent.

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Photo Credit: gettyimages-vladans

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Categories: Nebraska, Crops, Corn

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