(Posted Tue. Aug 27th, 2013)
Aug. 27: Droughts have long tails. Last year's drought, the third and most severe in a three year string of declining yields, raised concern among international buyers about the reliability of U.S. corn export capacity. Thus, it also helped boost record imports from South American and Black Sea producers. The U.S. Grains Council, of which the National Corn Growers Association is a founding member, has worked hard to anticipate and address these concerns in order to position U.S. corn for a rebound in exports when yields return to normal.
"China is watching the U.S. crop very closely and this visit has helped inform some of the key players in China about the capacity and safety of the U.S. system,” said Bryan Lohmar, USGC Council director. “They have a better perspective, and that translates into a higher degree of confidence and trust."
This spring invited China's State Administration of Grain to organize a senior study team to learn firsthand about the U.S. production system as part of the overall effort to foster confidence in corn exports. This month, that team visited key sites in five states and Washington to assess every component of the U.S. value chain and regulatory system. The team met with producers and visited research facilities, elevators, traders, ports and government officials.
The Chinese team showed particular interest in the U.S. grain export inspection system and the biotechnology development and approval process. Several members shared the misperception, which is widely held around the world, that most Americans do not eat genetically modified foods. They quickly came to understand that in the United States biotechnology is fully integrated into the production stream, and most Americans accept genetically modified foods as safe and reliable.
"There is no substitute for 'kicking the tires' and talking to people on the ground," Lohmar said. "The members of this team are leaving this week with a much stronger appreciation for the transparency and responsiveness of the U.S. system, as well as its capacity. This will win sales down the road."
As China emerges as a structural importer of corn, it seeks to diversify its suppliers. This year, China has taken its first-ever shipments from Ukraine and Argentina. Constant communication with buyers, government officials and other stakeholders plays an important role in boosting confidence in the reliability, quality and capacity of the U.S. production system, and positions U.S. farmers to benefit from the increasingly competitive and rapidly growing Chinese market.