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Trade Winds Shift

January 29, 2014
By: Jeanne Bernick, Top Producer Editor
export ship
TEU (Twenty foot equivalent unit): a standard container size that can be loaded and sealed onto ships, railroad cars, trucks and planes. A TEU can accommodate 796 bu. of soybeans.  

U.S. is no longer the top grain exporter, for many reasons

As the U.S. grain industry broadens its customer base, farmers’ profitability will depend not on the volume and quality of production, but increasingly on the ability to connect supply and demand. A study funded by the soybean checkoff warns that underinvestment in the U.S. transportation infrastructure, coupled with big investments by competitors, could significantly erode the American farmers’ competitive advantage.

competition chart

Since 2009/10, declining U.S. corn exports have been replaced by just three competitors: Argentina, Brazil and Ukraine.  Source: Foreign Agriculture Service

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"U.S. agriculture can accurately be described as ‘attaching a garden hose to a fire hydrant’," says Mike Steenhoek, Soy Transportation Coalition executive director. According to the study, between now and 2021, U.S. soybean acreage will increase 11.5 million acres and yield an additional 1.1 billion bushels. During the same period, China is expected to double its volume of soybean imports from 1.9 billion to 3.9 billion bushels. As a result, demand for U.S. soybeans by rail car is projected to increase  36%, and by barge is expected to increase 55%.

If the U.S. can’t export efficiently, there are plenty of other countries who can fill the volume. In 2014, Brazilian farmers are projected to harvest a crop that USDA estimates at 89 million metric tons (MMT), with exports forecast at 44 million. Those volumes mean U.S. supplies will trail Brazil’s.

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FEATURED IN: Top Producer - February 2014

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