SASKATOON — The United States is getting beaten up in crop export markets that it once dominated, says an analyst.
Brazil is body-slamming the U.S. in corn and soybean markets while Russia is pummeling it in the wheat market, DTN lead analyst Todd Hultman told delegates attending the company’s 2023 Virtual Ag Summit.
“Each year that goes by, that competition is getting stiffer and stiffer and we’re feeling more of the pain,” he said.
Two decades ago, the U.S. provided 50 to 60 percent of world corn and soybean exports. That has fallen to under 30 percent for both crops.
Its share of wheat exports has plunged to nine percent from 25 to 30 percent. This year’s wheat export program is expected to be the lowest in more than 50 years.
Brazil’s soybean acres have more than doubled over the last 15 years to 113 million harvested acres. Corn plantings have risen to 57 million acres from 25 million over that same period.
“Last year, Brazil became the world’s largest exporter of corn for the first time ever and it looks like they’re going to maintain that lead by a narrow margin here again this year,” said Hultman.
The country’s corn and soybean acres are growing by two to three percent per year and there is no end in sight.
Brazil made a proposal at the COP28 climate summit to speed up the conversion of pasture and rangeland to cropland with the help of international funding.
“Brazil’s agriculture minister has mentioned a number as high as 100 million hectares. That’s 247 million acres,” said Hultman.
He doesn’t think the international community will go along with such aggressive acreage expansion.
“But I can tell you, all they have to do is keep their current pace and it’s going to be tougher and tougher to compete in corn and soybean markets,” he said.
The wheat market changed when Russian President Vladimir Putin decided in 2012 to aggressively expand production in that country.
It has added 17 million acres of wheat during the last 10 years, producing four record crops in the past eight years.
“Russia has dominated world wheat exports for six of the past seven years,” he said.
The country is expected to ship out 50 million tonnes of wheat in 2023-24. The U.S. is forecast to export 19.7 million tonnes by comparison.
“We’ve really been suffocating from the lack of export opportunities,” said Hultman.
Russia’s wheat is the cheapest wheat in the world, which is driving down prices.
Hultman said Putin is keeping prices depressed and production elevated for political reasons, to curry favour and gain influence in Africa and the Middle East.
There is little that the U.S. can do about it.
“Who wants to be seen as the bad guy?” he said.
“Do we want to stop cheap wheat exports going to Africa or other poor populations of the world?”
The only “glimmer of hope” he has to offer U.S. farmers is the new source of demand that is building in the biofuel sector with renewable diesel and sustainable aviation fuel taking off.
It reminds him of the impact that ethanol had on the corn market when it exploded in 2007-08.
He noted that ethanol transformed the corn market while only taking a 10 percent share of the gasoline market, so it was not hugely disruptive to the energy sector.
Farmers need to beat that drum more often, reminding consumers that diversifying the energy base and improving the environment is a good thing.
“It’s also the best way to fend off the increasing exports that we’re getting from Brazil and Russia,” said Hultman.
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