Asian countries may no longer look toward the United States for its corn needs after a severe drought this past summer shriveled crops and sent corn prices soaring. As a result, the U.S. may be losing its dominance as a corn export powerhouse, according to foreign grain buyers at the Export Exchange industry conference this week in Minneapolis.
Importers from Asia, including South Korea, Taiwan and Japan have been buying feed from South America and producers in the Black Sea region instead of the United States, Reuters reported. It is also reported that China has not purchased any U.S. corn since mid-summer. Projections are that China will not buy any U.S. corn until the spring of 2013 and only if prices are closer to the $6 level, according to the grain buyers at the conference.
Argentina supplied China with corn for the first time this year as a result of higher priced corn from the United States.
“The floor of competition for U.S. grain production rises every day. This year is a wake-up year for us with the short crop we had,” said Thomas Sleight, president and CEO of the U.S. Grains Council, which hosted the conference.
“I would hope that the U.S. farmer comes back and comes back strong, flexing their competitive muscle. But certainly, the doors have been opened for the other suppliers,” he told Reuters.
The industry is concerned over the shift to South American exporters. Losing Asia’s market share could be a big concern. Brazil and Argentina appear to be making up for the lack of corn supply in the U.S. with bumper crops of their own.
Although traders cite U.S. corn as good quality, they simply cannot afford to make the purchase.