U.S. corn delegation examines South American competitive marketplace
May 12, 2008
A delegation of nine U.S. state corn board executives recently completed a USMEF-led tour of Brazil and Argentina to gain a deeper understanding of those countries’ corn, ethanol and red meat industries.
Corn industry leaders from Iowa, Kansas, Kentucky, Michigan, Missouri, Nebraska, Ohio, South Dakota and Virginia joined John Hinners, USMEF’s assistant vice president of industry relations, and Ricardo Vernazza-Paganini, USMEF’s director of Central/South America & Global Strategic Coordination, on a week-long examination of South America’s two top beef and grain-producing nations.
“These corn organizations are an integral part of USMEF’s membership base,” said Hinners. “They invest more than $1 million annually of their corn checkoff funds into USMEF red meat programs.
“This was a very educational visit for our team,” Hinners added. “While Brazil is a global beef powerhouse, we also saw firsthand that it is very committed to ethanol because, historically, 80 percent of that country’s energy has been imported.”
Based on a recent U.S. Department of Agriculture (USDA) forecast, Brazil is expected to increase beef exports 27 percent from 2007 to 2017. This equates to an additional 651,000 metric tons (1.43 billion pounds) over the next 10 years with exports totaling 3.05 million metric tons (more than 6.7 billion pounds) in 2017. That is compared to projections that U.S. beef exports will total 1.2 million metric tons (2.64 billion pounds) in 2017, an 88 percent increase over 2007 levels.
The team’s visit to Argentina enabled it to see some of that nation’s meat processing industry, which is composed of more than 500 packing plants, many small and family owned. Since March 2006, the government of Argentina has restricted beef exports to ensure that it can meet domestic beef demand. An annual export quota of 480,000 metric tons was established at the end of 2006, following a six-month ban, but exports were stalled again earlier this year amid rising prices and renewed concern over domestic availability. This Monday (May 5) the Argentine government announced the reopening of beef exports but it is not clear whether export permits (ROEs) are being issued at this time.
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Argentina currently has the world’s highest per capita beef consumption rate: 154 pounds per person annually. They supplement that with 66 pounds of poultry and 17.4 pounds of pork per person.
The USMEF-led team that visited Brazil and Argentina included: Craig Floss, CEO of the IowaCorn Growers Association; Dwayne Siekman, executive director of the Ohio Corn Growers Association; Gary Marshall, CEO of the MissouriCorn Growers Association; Jere White, CEO of the Kansas Corn Commission; Jody Pollok-Newsom, executive director of the Michigan Corn Growers Association; Lisa Richardson, executive director of the South Dakota Corn Growers Council; Phil Hickman, executive director of the Virginia Corn Board; Todd Barlow, CEO of the KentuckyCorn Growers Association; Don Hutchens, executive director of the Nebraska Corn Board; John Hinners, USMEF assistant VP of industry relations; Ricardo Vernazza-Paganini, USMEF director for Central/South America & Global Strategic Coordination.