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03-21-2013 10:27 AM - edited 03-21-2013 10:35 AM
Japan will buy corn where-ever and from whomever they can secure their needs in an economical timely fashion......I'm sure they'll enjoy waiting 3 months for corn they need NOW b/c of port JAMS in SA........does not EVERY country secure their domestic needs first, or is the US terminal-ly unique in this sense???????
03-21-2013 10:27 AM - edited 03-21-2013 10:28 AM
Another consequence of this Ray is that of saving American lives that may not have to go and defend foreign oil. It's not all bad.. It appears to just be bad for those who got used to cheap corn.
03-21-2013 10:32 AM
With this discussion, I think we are entering the world of semantics. Personally, I don't believe for a minute that the U.S. is an unreliable source for corn. See, the thing is the market doesn't care what I think. Instead, the market cares what the world buyers think. With Japan turning towards Brazil, Mexico glancing that way as well, and South Korea and other Asian buyers too, this does send a signal that those "regular" U.S. customers are starting to think, "Well, a drought, aflatoxin, increased ethanol production, maybe it's time to secure other source points."
Again, this is the sentiment of the world buyers, not me. So, let's watch. This may not become a trend. And 'unreliable' may be too strong of a word to use to describe the U.S.'s ability to feed the world with corn. I will say this, though, this year is the first I have ever heard anybody even whisper that we could run out of corn. Things seem tight, tight, tight!!
03-21-2013 10:44 AM
To further the discussion on what the world corn buyers are seeing, here's another supporting piece to their argument about the U.S. becoming an unreliable source. So, this morning, the United Soybean Board releases an announcement that U.S. 2012 pork and poultry exports had a record year. Now, the USB is touting the increased use in soybean meal. BUT, you and I both know that increased demand for those hogs and chicken products means increased use of corn.
Here's the USB press release:
These little piggies went to market – international markets, that is, and in record numbers. Despite challenging issues, such as the struggling global economy and trade barriers, U.S. poultry and livestock farmers enjoyed a record year for meat exports, which helps keep domestic demand for U.S. soy strong.
U.S. poultry, egg and pork shipments exceeded previous highs for value and volume set in 2011. International beef sales dipped slightly in volume but broke the previous value record.
Growing U.S. meat and poultry exports reinforce demand for U.S. soy since soy meal constitutes a significant portion of animal feeds. Domestic animal agriculture uses about 98 percent of the domestic supply of U.S. soy meal, making it the U.S. soy industry’s No. 1 customer.
“Exporting meat and poultry is a big issue for U.S. soybean farmers,” says John Butler, a farmer-leader from Dyersburg, Tenn. “If we can feed animals soybeans here and sell them abroad, we’re creating a value-added product. Adding that value here has a tremendous positive impact on not only the U.S. soy industry but the national economy as well.”
Poultry and hogs remain the biggest users of U.S. soy meal. According to the most recent statistics, poultry consume roughly 12.9 million metric tons annually. That’s the meal from 601 million bushels of soybeans. And hogs account for 6.8 million metric tons of U.S. soy meal, or the meal from 318 million bushels of soybeans."
03-21-2013 10:53 AM - edited 03-21-2013 11:00 AM
I see what you're saying. He's saying they are gone forever, at the 100% level. I'm agreeing that they (world corn buyers) are packing up their tackle box and poles and will try casting into other ponds and lakes. But, I'm not sure they took all of their lines with them. I'm thinking they still want a pole or two in that big ocean that they have always seen as a security blanket. But, diversifying as a fisherman probably has its rewards, much like investing. For instance, if you're going to trade the corn market, you might want to dip into the bean or wheat market too. Don't you think?
03-21-2013 10:55 AM
cx.....you might want to re-read my post........my point is that they will not go back to having us supply 100% of their needs....they will develop other sources.....I am pretty sure we will still get the lion's share of the biz....just not what it was
we ran into the same thing at one of our processing plants in Cedar Rapids.....we had cultivated some customers of product out of that plant to let us be their 100% supplier......which they did....then the flood hit and wiped out our plant for 5 months.....and those folks told us they could never let us be their 100% supplier anymore....they wanted to do some biz with the competition, just in case something happened again, even if out of our control....
03-21-2013 11:12 AM
ok ray so i'm having a little trouble reading English today - point being the foreign buyers who formerly relied 100% on US will no longer FULLY rely. absolutely!!
great analogy...you mean there's other markets to diversify in besides corn!..like yeah, i love corn, but after a few weeks of ONLY eatin' corn I get a little tired of it & may want to add some soy sauce and ranch dressing to it.......then I might want to make a sandwich which i'll need 2 slices of bread thats made w/ WHEAT....Then, i might want a to invest in Pork Bellies where bacon comes from that you would see in a bacon, lettuce & tomato sandwich.
03-21-2013 11:14 AM - edited 03-21-2013 11:36 AM
Interesting discussion. Have re-read the posts -- even a 95%+ supplier is still great, though not the 100% we would like.
Japan's plans to import from Brazil is not new news --
Personally don't view Japan's actions much differently than local ethanol plant sourcing corn from outside the area, thus helping to keep local corn cash price within reason. They do it because they need to make a profit, they want to keep operating while profitable, and supplies are tight. And, I choose among a few different delivery points when I sell corn as well, mostly based on price net of trucking -- everything doesn't always go to/from one place just because.