Brazil usurping U.S. as largest corn exporter: Chart of the Day
The CHART OF THE DAY shows Brazil will double shipments to 24.5 million metric tons in the year ending Sept. 30, while U.S. exports tumble 38 percent to 24 million, the fewest since 1972, according to a U.S. Department of Agriculture report on Feb. 8. That would mark the first time the U.S. wasn't No. 1 since at least 1960, when the data begin.
"The sheer volume of the decline is significant and marks a fundamental change in global trade," said Philip Abbott, an agricultural economist at Purdue University in West Lafayette, Indiana. Since prices surged to a then-record $8 a bushel in 2008, Brazil, Argentina, Russia, Ukraine and Kazakhstan have boosted output and improved shipping infrastructure, he said. "This is not a trend that will reverse quickly."
While much of shift reflects the 13 percent harvest decline in the U.S. last year, during the country's worst drought since the 1930s, Brazil has been expanding in agriculture for much of the past decade. The South American country already is the world's largest grower of sugar, coffee and oranges, and the USDA has been predicting for almost a year that Brazil would displace the U.S. this year as the top exporter of soybeans, Kazinform refers to Bloomberg.
U.S. share in the global corn market has been slipping even as the country remained the largest grower, partly because of expanded use of the grain to make ethanol. The U.S. will account for 25 percent of exports this year, down from a peak of 84 percent in 1980, as output jumped in Argentina, Brazil and Ukraine, and as China expanded enough to reduce the need for imports, government data show. Before 2012, the last time U.S. was below 50 percent was 1971.
'One-off'
"The drop in U.S. corn exports probably will be a one-off year" because the government is forecasting a 35 percent jump in production to a record in 2013 and a drop in prices, said Michael Swanson, a senior agricultural economist at Wells Fargo & Co. in Minneapolis. "Ultimately, the U.S. is a better corn producer than Brazil and will regain market share. Countries with rising middle-class populations will want to rebuild inventories, especially if corn is $4.25 or less in the Midwest at harvest this year."
