Crumbling Corn Adding to Woes for American Grain Exporters

11:00PM Jan 08, 2020
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(Bloomberg) -- The woeful growing season suffered by Midwest farmers just won’t let go. After spells of record rain delayed planting and harvesting, at least one international customer is now complaining about the poor quality of U.S. corn.

The rain left grain soggy, forcing growers to dry it artificially. That makes corn more prone to breaking into smaller pieces. Some corn in this year’s crop also has a less vibrant color than the bright-yellow prized by animal-feed manufacturers.

The issues are showing up in Vietnam, a top 10 market for U.S. corn in 2018, according to a Department of Agriculture report released on Jan. 6. U.S. exporters are already struggling with reduced demand for corn used in animal feed as a result of the African swine fever virus in Asia. Meanwhile, lower-priced grain from Brazil, Argentina and Ukraine is snaring market share from the U.S., the top global corn exporter.

“U.S. corn is less preferable than South American corn in the Vietnamese market due to its higher moisture and broken rate, darker color and general price disadvantage,” the USDA’s Foreign Agricultural Service reported, citing industry sources.

The USDA will update its forecast in a World Agricultural Supply and Demand Estimates, or WASDE, report due Friday

In November, U.S. corn exports were down 51% from the same month a year ago. Meanwhile, Brazilian data on Monday showed corn exports in 2019 nearly doubling from the previous year.

Vietnam’s corn imports from all suppliers are likely to fall by 4.3% to 10 million tons in the 12 months ending April 30, according to the USDA report. That’s after the swine population fell by 22% due to the swine fever virus.


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