February 25, 2010

US seeks to unlock corn exports potential

A US Grains Council conference highlighted on the need to focus on promoting demand creation in order to unlock the full potential of US corn exports.

In the meeting, Christopher Langholz, president of Cargill AgHorizons, said the last 10% of demand sold determines the price on 100% of supply. If the 1.3 billion bushel corn carryout of 2008 were 500 million bushels higher or lower, it would have had a significant impact on the price, he said.

The role of exports is critical, as exports are a way to get producers those extra critical cents per bushel, said Langholz. He said they want demand that will come, and be able to produce for it.

He suggested five tangible methods to increase US corn exports:

• Active trade policy agenda - approvals on pending free trade agreements are fundamental to expanding US agriculture exports.
   
• Reinvestment in US export infrastructure - investment is needed in the US inland waterways, which is a competitive advantage with the farm-to-market river system and which will be key for long-term success.
   
• Expand use of biotechnology - Biotech helps maximise crop yields and grow crops in areas of the world that were never before possible, and it is a powerful tool in improving living standards. But consumer acceptance remains an issue.
   
• Adaptability and capability of US supply system.
   
• Basic market development in the right sectors.