National Corn Growers Association

The export of corn and corn products is vital to the nation’s economy and NCGA has a deeply rooted policy of working to eliminate barriers to trade and supporting market development. Exports of U.S. corn and co-products provide critical support across the economy, offering billions in direct and indirect economic benefits to farmers, rural communities and the nation.

For generations, America's farmers and ranchers have built strong trading relationships to help maintain a competitive edge in the global economy and bolster job creation across the United States.

Growing for a Global Market

As the world’s largest producer and exporter of corn, U.S. corn farmers are well-positioned to meet global demand. With 96 percent of consumers living outside the United States, the future of American agriculture largely depends on our ability to sell to foreign markets. Additionally, markets with trade liberalization measures in place are outperforming the rest of the world. Exports to our 20 recent free trade partners account for more than 40 percent of total corn exports.

Why Trade Matters for Corn Farmers

Exports are responsible for 33 percent of U.S. corn farmers’ income. More than 20 percent of the U.S. corn crop is exported annually when accounting for corn and value-added products like ethanol and distillers dried grains with solubles (DDGS). Twenty-six percent of U.S. corn exports go to Canada and Mexico alone.

The benefits don’t stop at the farm gate, they have a ripple effect throughout the U.S. economy. Agriculture, food, and related industries contributed $1.053 trillion to U.S. gross domestic product (GDP) in 2017, and in 2018 jobs related to agriculture account for 11 percent of total U.S. employment – 22 million full and part-time jobs[1].

New Markets, New Agreements

U.S. trade policy must advance the interests of American farmers and ranchers and boost U.S. agriculture’s competitiveness in regions undergoing economic growth. Corn farmers celebrated agreements to secure the future of U.S. trade relationships with Mexico, Canada, Korea, and Japan, all top markets for the U.S. corn industry. NCGA will work with the U.S. government to monitor implementation of these agreements and the Phase One agreement with China, which NCGA views as a positive step toward our overall goal of long-term market access and a fairer trading relationship.

Now it is time to build on this momentum and forge new trade agreements with strategic partners that offer new growth opportunities for U.S. corn and corn product exports. With rapid global population and middle-class growth projected for Southeast Asia, India, and sub-Saharan Africa, these regions require sustained U.S. engagement.

Re-engaging with Southeast Asia is a top trade priority for NCGA. Southeast Asia encompasses 13 countries, with a total a population of 702 million. The region is a rapidly growing demand center for protein, feed and renewable energy. We know this focus on new markets and new agreements will also benefit our customers in the livestock and poultry industry.

We must continue to nurture and expand upon our successful partnerships in Latin America as well. Additionally, NCGA will work to build widespread recognition of the growth of ethanol exports and the importance of this growing market for the U.S. corn industry. We see opportunities to achieve market access gains and address non-tariff barriers in the U.S. government’s negotiations with the United Kingdom, the European Union and Kenya, and NCGA will seek to ensure that agriculture is part of these and any other trade negotiations.

Building Markets and Knocking Down Barriers

In addition to new trade agreements, the daily, on-the-ground work of promoting U.S. agricultural products, fighting non-tariff trade barriers, and building global demand is critical to making trade work and keeping U.S. farmers competitive. USDA’s Market Access Program (MAP) and Foreign Market Development Program (FMD) assist farmers to expand key markets and build new export market demand. NCGA urges Congress to increase investment in these critical programs and to appropriate discretionary funds to support administrative costs associated with the programs.

NCGA will collaborate with the U.S. government and industry partners to counter the threat non-tariff barriers pose to the fair and open trade of corn and corn products. The corn industry encounters barriers to the use of agricultural innovations such as biotechnology, crop protection products and, on the horizon, new plant breeding techniques, which are important tools for farmers’ environmental and economic sustainability. We will promote multi-lateral commitments to science-based and transparent regulation of these agricultural products.

Ethanol Exports

Ethanol exports are an opportunity to substantially move the demand needle for our industry, driving global competitiveness and delivering more climate-friendly energy solutions. The global ethanol market has grown from more the 4.5 billion gallons (17 billion liters) in 2000 to more than 29 billion gallons (110 billion liters) in 2019.

International customers are increasingly turning to ethanol not only as an affordable source of renewable energy, but one that delivers superior environmental and human health benefits over other sources of energy. As many countries look to improve air quality and reduce carbon emissions, ethanol is a readily available solution for helping them achieve their environmental goals. The Department of Energy’s Argonne National Laboratory GREET model for 2019 shows ethanol’s average carbon intensity is 41 percent lower than that of baseline gasoline. And a new analysis from scientists at Harvard University, Tufts University, and Environmental Health and Engineering finds ethanol cuts emissions by 46 percent compared to gasoline.

China

China has made unprecedented corn purchases from the United States in the 20/21 marketing year. At this point, China is our industry’s top customer for the year. NCGA is pleased with the pace of purchases, and we are starting to see ethanol exports pick up as well.

We hope to see negotiations between the United States and China resume to establish longer-term certainty around the trading relationship and to move toward a point of lifting tariffs like the one that remains on U.S. ethanol exported to China.

TRADE PRIORITIES

Urge the Administration to pursue new free trade agreements, focusing on the Asia-Pacific region. Ensure that agriculture remains part of all trade negotiations.
Monitor implementation and enforcement of new trade agreements.
Stand firm against non-tariff trade barriers that impede corn and corn product market access.

Increase funding for USDA's Market Access Program (MAP) and Foreign Market Development Program (FMD) to continue expanding existing markets and building new export market demand.

[1] USDA, Economic Research Service. https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/ag-and-food-sectors-and-the-economy/

Trade News

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February 4, 2020

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