For more than half a century, U.S. farmers have dominated the international corn market, delivering more of the all-important crop than any other country. However, Brazil has now taken over, Bloomberg reports.
According to the USDA, in the 2023/24 season, the United States will account for about 23% of global corn exports, which is significantly less than Brazil (almost 32%). It is believed that Brazil also holds the lead in terms of acreage in the 2023/24 season, which begins on September 1. Only once has the US left the top spot: in 2013 after a devastating drought.
The U.S. also lost the top spot in exports of both soybeans and wheat. Soybeans were the first to go, and Brazil finally took the lead in 2013.
In addition, in 2014, the US lost its dominance in wheat exports as the EU began to displace US farmers on the world market.
Rising costs, farmlands
There are a number of factors behind this shift: rising costs in the US and a lack of open farmland, and the lingering effects of former President Donald Trump’s “trade war” with China.
Among the reasons for this situation is the federal government’s restriction on the use of domestically grown corn for ethanol production, which is added to gasoline. About 40% of U.S. corn is sent to plants that produce ethanol for use as a transportation fuel. This imposes high labor and logistics costs.
At the same time, modernization of logistics routes in Brazil and the weakness of the Brazilian currency gave the country an export advantage in the 2022/23 season.
Climate advantage of Brazil
Brazil, with its warmer climate, also receives two corn harvests per year instead of one, giving it a competitive advantage over the US. Even if the U.S. corn sector regains its leading export position within a year or two in the near term, given all its obstacles in the global market compared to Brazil, it is unlikely to regain leadership in the long term, according to the publication’s observers.
At the same time, the country has entered the Chinese corn market. In July alone, China purchased more than 900 thsd tonnes of Brazilian corn.