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U.S. exports of feed grains in all forms set new record in 2017-18

Exports increased 6% from last marketing year’s record-setting levels.

The final 2017-18 marketing year’s numbers are out, and for the second year in a row, the U.S. has set a new record for exports of feed grains and co-products, led by higher corn and ethanol shipments, the U.S. Grains Council (USGC) reported.

Overall, the U.S. exported nearly 120 million metric tons of feed grains in all forms (GIAF), translating into roughly 4.75 billion bu., or a third of U.S. production. Exports for the marketing year’s increased 6%, or 6.5 million tons (256 million bu.), from last year’s record-setting levels.

“For U.S. grain producers, our 2017-2018 export performance was outstanding and above recently revised expectations due to particularly strong shipments in the second half of the marketing year,” USGC chief economist Mike Dwyer said. “U.S. agricultural producers saw international demand for their products -- in one form or another -- continue to rise. This export growth is vital to our feed grain producers, who continue to see their yields and overall production rise amidst challenging trade policy conditions."

Southern neighbor and trade agreement partner Mexico topped all other markets in GIAF imports, with total marketing year shipments growing 6.3% year over year to a new record of 25.2 million tons (almost 1 billion bu. in corn equivalent). By category, Mexico ranked as the largest buyer of U.S. corn, barley and dried distillers grains with solubles (DDGS), with sales in each category increasing from the prior year.

Japan was the second-largest overall GIAF market overseas in 2017-18, with shipments roughly unchanged from last year at 16.9 million tons (665 million bu.). Japan ranked as the second-largest buyer of U.S. corn and U.S. sorghum, the third-largest buyer of U.S. barley and the ninth-largest market for U.S. DDGS.

South Korea rounded out the top three overall importers, increasing purchases of U.S. feed grains and co-products by 11.8% to 9.33 million tons (367 million bu.) -- a new record. Notably, Korea ranked as second-largest buyer of U.S. DDGS, the third-largest buyer of U.S. corn and sixth-largest buyer of U.S. ethanol, in addition to making significant purchases of U.S. sorghum.

USGC said it utilizes the GIAF calculation to help capture how important overseas markets are for U.S. feed grain producers by including exports of corn, barley and sorghum and products made with them as inputs, including the corn equivalent of co-products like ethanol, DDGS and corn gluten feed/meal as well as beef, pork and poultry meat exports.

By category, U.S. corn exports increased 6% to 61.8 million tons (2.43 billion bu.). Corn exports to Mexico reached a record high of 15.7 million tons (618 million bu.), up nearly 13% over the last marketing year.

“This year’s sales continue strong export growth seen over the last five marketing years despite uncertainty surrounding the negotiation of the U.S.-Mexico-Canada Agreement thanks, in large part, to the market access provided by the existing North American Free Trade Agreement and the resulting well-developed North American supply chains and robust market development work by the council and its members,” USGC said.

U.S. ethanol exports surged 19% to a record 1.62 billion gal. (equivalent to 547 million bu. of corn), which USGC said was the result of its greatly expanded worldwide market development work as well as work by ethanol industry partners including Growth Energy, the Renewable Fuels Assn. and generous support from state corn organizations. Recent successes are also aided by a competitively priced product compared to those of other ethanol exporting countries as well as fossil fuel alternatives like MTBE (methyl tertiary butyl ether) and aromatics (benzene, toluene and xylene).

Notably, this year’s export total surpassed the previous record of 1.37 billion gal. (equivalent to 490 million bu. of grain) exported in the 2016-17 marketing year. USGC said it started promoting ethanol in the 2013-14 marketing year and quickly expanded the intensity and geographic scope of its market development efforts.

“U.S. ethanol exports are up 60% over the last two marketing years, with back-to-back years of record exports as the council has ramped up its worldwide demand-building and market access activities,” Dwyer said. “We are the world’s low-cost ethanol producer, which has helped the United States capture more than 65% of global ethanol exports in the 2017-2018 marketing year.”

USGC reported that U.S. DDGS exports also grew year over year, albeit at a slower pace of 5.7%, with increased purchasing by four of the five top buyers for the year. Each of the top four buyers -- Mexico, Korea, Turkey and Vietnam -- purchased more than 1 million tons of U.S. DDGS in the 2017-18 marketing year, indicating continued strong global interest in the feed ingredient despite a steady decline in China's purchases since 2013-14.

Despite continued trade policy challenges, China remained the top buyer of U.S. sorghum, with 4.2 million tons (165 million bu.) sold in 2017-18, largely before tariffs were enacted that continue to inhibit purchasing. Overall, sorghum exports were down nearly 14% year over year to 5.16 million tons (203 million bu.), but several smaller markets did increase purchases, including Japan, Sudan, the European Union (led by Spain), Somalia and South Korea.

U.S. barley exports remained roughly unchanged over the last three marketing years, with nearly 550,000 tons (25.3 million bu.) sold in 2017-18. Mexico continued to dominate purchasing at 394,000 tons (18.1 million bu.), which is further evidence of the importance of this top market, the council said.

“The 2017-2018 marketing year remained a pleasant surprise across most categories, considering the year was characterized by trade policy concerns and market uncertainty,” USGC said. “The results demonstrate the work by the council and partner organizations to develop markets, enable trade and improve lives through capitalizing on short-term opportunities and building long-lasting and loyal trading relationships.”

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