Could Poor Quality Corn Hinder Exports to China?

01:00PM Jan 24, 2020
CornGroundPile
The U.S. may not be running out of corn, but the quality of corn from the 2019 harvest is poor.
( Topflight Grain Coop ‏ )

China may be shopping around for U.S. corn and corn products to buy. Even if China ramps up purchases of U.S. corn, is there enough quality corn to feed the demand?

Sam Hudson of CornBelt Marketing said he knows quality of corn has been a problem this year.

An early freeze hurt grain quality, something growers in the Northern Plains – and other corn growing areas - are severely battling from this past growing season. Hudson, however, doesn’t think poor quality will hurt the U.S. overall.  Chip Nellinger of Blue Reef Agri-Marketing doesn’t see that being a big issue for export demand, either.  

“The commercials have a real knack for blending corn,” he said. “That's where they made a lot of their money in the last few years, because the margins haven't been there for them like it has been in the past.  I think we're not going to have much of an issue fulfilling exports.”

Nelinger said exporting the corn hasn’t been an issue as of yet, and he doesn’t think it will be a problem if China looks to the U.S. to source more corn in 2020.

So, what does China care more about: price or quality?

“I think it's more about quantity and what they really even want,” answered Hudson. “I don't think the quality will hinder us. I think that can be used as a scapegoat. But when you think about it, yes, there's a lot of poor quality corn out there. But we grew a lot more acres of corn in the south this year than we had two or three prior years prior to that. So, good quality inventory is there if someone really wants it.”

Hudson said as far as timing of those purchases, but he thinks exports of DDGs hold the most potential right now. Hudson told U.S. Farm Report that no matter what China purchases, any demand for U.S. corn will be welcomed by the markets.

“We've continued to find ourselves in the supply lead market,” said Hudson. “When we're not at the front of the line from a demand standpoint, we've seen how that impacts us.”

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Plan Now to Mange Low-Quality Corn

USFR-RT2 1/25/2020