USGC programs contribute to increasing long-term global demand
According to the U.S. Department of Agriculture's Long-term Projections report issued on Feb. 12, growth in coarse grain trade is "strongly" linked to expansion of livestock and poultry industries in regions unable to meet their own feed needs. Specifically, the report states that developing countries are the main source of growth in world demand and trade. Key growth markets identified in the report, covering the 2009-2018 period, are all regions where the U.S. Grains Council, a non-profit organization dedicated to building demand for U.S. grains, is conducting hands-on market development programs to expand livestock industries. The report lists China, Mexico, North Africa, the Middle East and Southeast Asia as the top growth markets.
"It is no coincidence that the Council is located in areas where USDA projects growth in the poultry and livestock sectors resulting in increased demand for U.S. barley, corn, sorghum and their co-products. Council members identified these developing markets as top priorities during the Council's International Marketing Conference in Guatemala this week," said USGC Chairman Jim Broten. "By taking down trade barriers, developing markets and nurturing those markets we were able to generate $659 million for U.S. farmers in 2008, according to an Informa Economics study that was validated by USDA."
The report recognizes the global economic slowdown in 2009 but projects a recovery after 2010, which will remain slightly above the historical average long-term growth rate during the last half of the 2009-2018 period. This renewed growth provides the foundation for gains in world demand. World coarse grains trade is projected to expand nearly 19 million tons (16 percent) from 2009-2018. For example, Mexico's corn imports are expected to increase from 9.1 million tons (358 million bushels) in 2009/10 to 11.5 million tons (452.7 million bushels) in 2018. Mexico's sorghum imports are projected to increase to nearly 4 million tons (157million bushels) by 2018. Egypt is also expected to boost its corn imports by more than 2 million tons (78.7 million bushels). Countries in Southeast Asia will likely require an additional 1.7 million tons (66.9 million bushels) of corn during the projection period. Feed barley imports by North Africa and the Middle East are projected to grow steadily over the next decade. According to Mike Dwyer, chief economist of USDA's Foreign Agricultural Service (FAS), the efforts of the Council, a leading cooperator with FAS, certainly pushed U.S. feed grain demand upward.
"The international market development programs orchestrated by the U.S. Grains Council undoubtedly strengthen livestock industries overseas, thus increasing the demand for feed grains," said Dwyer. "Market development, however, isn't done overnight and much of the increasing demand for feed grains across the globe is a product of information sharing and hands-on development by the U.S. Grains Council years ago. The impact of its efforts today to develop new markets and expand those already in existence will be seen more visibly in years to come."
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