Feed crops: Competition for US from Brazil and Argentina

The US Department of Agriculture (USDA) reduced its export forecast​​ for soybeans in 2017-18 on Thursday (14 December) based on a continued lag in sales commitments and shipments. However, exports from Brazil were forecast up by 500,000 metric tons and those from Argentina also were raised by 500,000 metric tons.

The seasonal competition that the US used to face from Brazil and Argentina has been disappearing, said Cary Sifferath, senior director of global programs with the US Grains Council. Those countries are seeing larger crops of corn and soybeans and are increasing availability year round.

“They’ve had two very good corn crops in a row so they’re giving the US some strong competition in the export market,”​ he told FeedNavigator.

Export competition​

Brazil tended to be more competitive in May through July, while the US was stronger post-harvest in the November through March period, said Sifferath. “It used to be almost very distinct, but there’s some overlapping in that,”​ he added.

There are some areas where both countries may need more improvement, he said. 

In Brazil, infrastructure has been a challenge and feed crops are still moved to export locations by truck, he said. However, the country has built new export facilities.

Although, the loading process can still have delays, which gives a benefit to the US at this point, aging infrastructure in the US also may cause issues, he said.

There also are some buying countries that are more price sensitive or that are better positioned for shipments from locations in South America, Sifferath said.  

Corn

The big corn buyers are Japan, Korea, and Vietnam but Mexico is the biggest customer in terms of US exports, he said.  

“Looking at the newer markets, Taiwan, Vietnam are new and growing, but those large markets can be cost sensitive and they’ll switch from the US to South America fairly easily,” ​he said. “In a market like Vietnam, logistically, South American origin tends to compete freight-wise.”​

Additionally, the US may be losing out in its traditional exports markets, like Mexico, he said. From September through November, Mexico imported several thousand tons of corn from Brazil and Argentina.

“US has still the [biggest] market share, but we are seeing competition from South American into our number one customer,”​ said Sifferath. 

In regions such as western Europe, the US continues to be more competitive, he said.