WHY WOULD ANOTHER COUNTRY WANT U.S. MEAT?

Why would another country want U.S. meat?  Well, it turns out that in many countries, the U.S. is well respected as providing high quality protein.  Some countries, like Mexico, don’t grow enough hogs to provide all the pork their citizens want, so they buy from the U.S. because it’s close, easy, and cheap because of our free trade agreement.

Other countries appreciate our food safety standards.  Or maybe governmental officials from the country have visited our farmers and they like what they see.  The reasons are endless.

U.S. poultry buyers guide

But when another country is interested in buying U.S. poultry or eggs, they might refer to a buyer’s guide, like this one provided by the USA Poultry and Egg Export Council.

The guide helps international customers understand the frozen, uncooked chicken cuts that are available, as well as the processed and specialized products for sale.

Maybe more importantly, the guide also helps the customers understand the safety standards U.S. poultry is subjected to before its allowed to be sold.

“All U.S. chicken meat which is offered for export must be inspected and approved by the Food Safety Inspection Service (FSIS) of the U.S. Department of Agriculture (USDA). The 90-year-old agency is regarded as a
model for food inspection services worldwide. A USDA inspection stamp indicates that a chicken product was properly processed, has been inspected and is safe to eat. There are three integral layers in FSIS food safety  assurance: manual inspection, HACCP and pathogen reduction.”

Did you realize you live in a country that provides one of the safest food options available worldwide?

TRADE HELPS THE WORLD TO EAT

We talk a lot about trade on this blog, but let me boil it down for you again:

American farmers are great at growing food.  Corn, is a big commodity, but because we’re great at growing corn, we are also great at growing cattle, pigs, and chickens because they eat corn.

When one country has all the food (corn, soybeans, pigs, cows, chickens) and another country doesn’t, the answer is trade.

Last week, our board got a chance to meet with the U.S. Meat Export Federation, whose goal is to help other countries that need more protein sources understand how to use the protein we sell from the U.S. and help them import it into their country.

Here’s a video created by the U.S. Meat Export Federation summarizing a U.S. Pork Seminar they held in the Dominican Republic.

The effort that goes into opening and servicing an international market is huge. First we must work with government officials to alleviate any concerns working with the U.S. Then we have to help the chefs and restaurateurs understand how to use our cuts of pork in their traditional recipes. Finally, we work with grocery stores to help international customers know how to prepare our pork in their homes.

EXPORTS TO FTA MARKETS ACCOUNTS FOR 54 PERCENT OF IL EXPORTS

Free trade agreements are super important to the entire country, but perhaps more important to Illinois farmers than farmers in other states.

We’ve discussed that Illinois exports more of its grain (and other goods) out of the state because we have the competitive advantage of the Illinois and Mississippi River.  Now see how much we benefit when the U.S. works with other countries so we can sell our grain and compete on a level playing field internationally.

In 2017, exports to FTA markets accounted for 54% of Illinois exports.  Wow!

source: https://www.trade.gov/mas/ian/statereports/states/il.pdf

U.S. ETHANOL FUELS OUR WORLD

And these days, keeping our world safe with trade means that everyone has a safe supply of fuel as well!  Did you realize how much U.S. ethanol is fueling the vehicles all over the world?

We are already shipping ethanol to Brazil, China, Japan, and to our best friends, Canada and Mexico.  But we’re growing in other markets like the EU, and many countries in Central and South America.

American farmers and ethanol producers are seeing major growth in this area!  And we’re proud to supply a cleaner burning, renewable fuel!

WHEN TRADE WORKS, THE WORLD WINS

I learned something this week about the history of trade that I never knew before.

After World War II, our world got together and tried to figure out how to prevent more world wars.  Making sure that everyone had access to food and that all the countries were relying on each other was a part of that solution.

Since WWII, the United States has negotiated trade agreements with 20 countries.  Other countries have many, many more trade agreements.  And guess what?  It’s working!

Surely trade isn’t the only reason we haven’t had global wars, but it isn’t hurting.

You know what they say: if you don’t remember history, you are doomed to repeat it!

HOW MUCH CORN DO WE GROW AND WHAT’S IT WORTH?

Although corn (or maize, as it’s known throughout much of the world) is grown in nearly all 50 states, production is primarily concentrated in the northern and Midwestern states—collectively known as the U.S. Corn Belt.

Farmers in the Corn Belt grew quite a bit of corn in 2017 – enough to satisfy some pretty large markets with corn to spare!  Corn prices are low right now because farmers keep growing a lot of corn and the market demand isn’t keeping up.  U.S. policies about ethanol and trade are part of that impact.

For the market year September 2016 – July 2017, farmers sold Mexico 21.7 million bushels of corn for just over $6 billion.  They also sold 15.8 million bushels to Japan for $5.5 billion and 8.1 million bushels to South Korea for $2.8 billion.  These three countries are our largest corn importers.

Farmers are proud of the corn they grow and the economic activity they spur for our country.  With these numbers, who wouldn’t be?

MEAT EXPORTS HELP FEED THE WORLD

One of the things that we work on constantly at IL Corn is how to export more commodities to other countries.  This obviously helps farmers because it creates more market opportunities for their products, but also helps other countries that don’t grow or produce enough food to feed all their citizens.

We really enjoy exporting pork, beef, and poultry.  It makes the most sense; sell the corn here in Illinois or at least in the U.S. to another farmer who adds value to the corn by growing beef or pork with it, and then sell that beef or pork to an overseas customer.  This philosophy helps U.S. farmers capture more of the economic opportunity here in the states while still helping to feed the world.

The U.S. Meat Export Federation is one organization that helps us do this.  They have representatives in other countries that understand the culture and food and nutrition demands of the citizens there, and then they help promote U.S. beef and pork in those countries using what they know.

They even work to build demand for the cuts of beef and pork that we don’t use so much of in the U.S. so that we waste less of the animal.  As an example, we love our bacon here in the U.S. so no reason to promote bacon overseas.  Do you know what we love less?  Tongue.  Do you know who likes tongue?  Japan.  It’s a win-win proposition!

Interested in learning more about how we export beef and pork into other countries?  Follow U.S. Meat Export Federation on Facebook!

HOW DO FARMERS FEEL ABOUT THE TRADE AID?

How do farmers feel about the trade aid?  In a word, bad.

Not that I should be putting words in farmers’ mouths, but the majority of farmers that I’ve heard from would rather have good market demand and a good price for their commodities than receive government money to keep their farms in business.

To go back to the beginning and really understand this issue, you must have a good understanding of supply and demand.  The basics are, when supply is high and demand is low (you have a lot of corn and no one wants it), then the commodity price for corn is low.  When demand is high and supply is low (you have very little corn and everyone wants it), the commodity price for corn is high.  What farmers really want is both of those things in moderation – good steady supply and good steady demand.  Both of these things would help maintain farm incomes at a reasonable place for farmers to stay in business and for customers to be able to afford the corn they are growing.

The only piece of this equation that farmers can really control is supply.  But when farmers are growing crops for a supply that they thought existed, and then the government screws the demand side of the equation up, all of the sudden there’s no demand for the steady supply farmers were providing when they put their seeds in the ground.

That’s what happened here.  Farmers were growing for a very exciting and vibrant export market when they put their seeds in the ground, but now those markets aren’t there.  All the additional supply without the vibrant demand is sending corn prices into a hole.

Because the export demand failure is not the fault of the farmer, President Trump is trying to keep them in business another year with a trade aid package.

Is this what farmers really want?  No.

Will farmers take the few cents offered to them?  Yes.

If a big tax refund were planned for 2019, wouldn’t you take that cash even if you thought the politics behind the cash were wrong?

The bottom line?  This trade aid stinks and farmers don’t want to see the government outspending itself any more than the next guy.  But tariffs stink too and if farmers have to live with tariffs, they will also have to live with the trade aid.

What are your thoughts?

Lindsay Mitchell
ICGA/ICMB Marketing Director

 

A FUN LITTLE GRILLING COMPETITION WITH U.S. MEATS

IL Corn works with other associations to promote U.S. corn, ethanol, DDGS, beef, poultry, and pork in other countries.  We often fund educational, fun, and meaningful opportunities for chefs or average consumers to experience the difference with U.S. products.

This video shows a fun event in Mexico promoting U.S. beef and pork, hosted by the U.S. Meat Export Federation.  IL Corn didn’t happen to fund this particular event, but you’ll see how much fun we have showing folks the YUM factor with U.S. meats!

FORGET CORN & ETHANOL, EVEN DDGS TRADE IS PROFITABLE!

We talk a lot about corn and ethanol on this blog, but what about DDGS?  We sell a considerable amount of DDGS overseas – worth $2.34 billion!  And that’s worth talking about!

DDGS stands for Dried Distillers Grains with Solubles.  DDGS are what’s left over after corn has been made into ethanol.   Corn-based distillers grains from the ethanol industry are commonly sold as a high protein livestock feed that increases efficiency and lowers the risk of subacute acidosis in beef cattle.

IL farmer Lou Lamoreux shows the DDGS he feeds his cattle.

Those are a lot of big words, but the main point here is that after we make ethanol out of the corn, what’s left can be fed to livestock and it’s becoming increasingly important in the livestock industry, both in the U.S. and around the world.

So important, in fact, that DDGS are sold and trade just like corn, ethanol, and other commodities.

It’s recycling at its best!  We don’t waste a bit of that precious Illinois corn!

Lindsay Mitchell
ICGA/ICMB Marketing Director

 

 

For more information, watch this video!  DDGS are a bit of a dry topic (pun intended!) but for the folks that are interested, you can learn a ton here!