Corn is by far the largest component of global coarse-grain trade, accounting for about three-quarters of total volume in recent years. (Coarse grains make up a common trade category that includes corn, sorghum, barley, oats, and rye.) Most of the corn that is traded is used for feed; smaller amounts are traded for industrial and food uses. Processed-corn products and byproducts--including corn meal, flour, sweeteners, and corn gluten feed--are also traded, but are not included in this discussion of corn trade.
U.S. Corn Trade
The United States is the world's largest producer and exporter of corn. Corn grain exports represent a significant source of demand for U.S. producers and make a significant net contribution to the U.S. agricultural trade balance for agricultural commodities, indicating the importance of corn exports to the U.S. economy. On average, corn grain (excluding popcorn or sweet corn) accounted for approximately 11 percent of all U.S. agricultural exports by value during the 1990s. In 2008, because of record exports of corn and other feed grains, that share grew to over 12 percent of the U.S agricultural export value. But by 2014, a declining U.S. share of world corn trade and moderating corn prices left corn with only a 6-percent share of U.S. agricultural export value.
The U.S. share of world corn exports averaged 60 percent during 2003/04-2007/08 (the international trade year is October-September). U.S. corn exports soared in the 1970s from 13 million metric tons at the start of the decade to a record 62 million in 1979/80. The growth was due to strong demand in Russia as well as in Japan, Western and Eastern Europe, and developing countries. Over the next few years, U.S. corn exports dropped, hitting 31 million metric tons in 1985/86, because of poor global economic growth, expansion of the European Union (EU), and U.S. Government support for domestic corn prices.
In the second half of the 1980s, U.S. exports rebounded, reaching 60 million metric tons in 1989/90 because of large domestic supplies and more competitive prices as the government reduced commodity loan rates. Exports in the early 1990s declined again because of external factors, notably the breakup of the former Soviet Union and rising Chinese corn exports.
In 2008/09, expanding biofuel production put pressure on U.S. corn and other feed grain production, exports, livestock feeding, and other domestic uses. The United States experienced record demand and corn production during 2007/08 that pushed U.S corn exports to only 18 million metric tons, and Brazil emerged as the world's largest corn exporter for that year. Since then, U.S. exports have rebounded to account for about 40 percent of world corn trade. However, a slowing world economy reduced demand for corn in 2008/09. In 2012/13, the U.S. drought severely limited corn exports. Nonetheless, global population increases and consumer demand for meat products will continue to support expanding feed grain exports in the long term.
World Corn Trade
Although the United States is the world's largest corn exporter, exports account for a relatively small share of demand for U.S. corn--less than 15 percent. This low demand for exports means that corn prices are largely determined by supply-and-demand relationships in the U.S. market, and the rest of the world must adjust to prevailing U.S. prices. The high influence of the U.S. corn supply makes world corn trade and prices dependent on weather in the U.S. Corn Belt. Because much of the foreign competition, is in the Southern Hemisphere, farmers plant their corn after discovering the size of the U.S. crop, thereby providing a quick, market-oriented supply response to short U.S. crops. Several countries--including Brazil, Ukraine, Russia, India, and South Africa--have had significant corn exports when crops were large or international prices, attractive.
China has been a significant source of uncertainty in world corn trade, swinging from the second-largest exporter in some years to an importer of large quantities in other years. China's corn exports are largely a function of Government export subsidies and tax rebates because corn prices in China are mostly higher than those in the world market. Large corn stocks are expensive for the government to maintain, and Chinese corn trade policy fluctuates with little relationship to the country's production, making China's corn trade difficult to predict.
World corn trade reached 78 million tons in 1980/81, with large imports by the Soviet Union and Europe. Since then, corn imports by EU countries have declined steadily as the Common Agricultural Policy limited grain imports and EU membership expanded. For example, as countries like Hungary joined the EU, their corn shipments that previously went to the rest of the world were diverted to the EU. At the end of the 1980s, the Soviet Union's political and economic reforms led to a liquidation of livestock herds and a drop in corn imports in the former Soviet Union and Eastern Europe. During the same time period, Japan, South Korea, and Taiwan continued to increase corn imports to support increasing meat production and consumption.
Developing countries worldwide have continued to increase corn imports fairly steadily since 1980. This growth in developing-country imports propelled global corn trade above the 1980 level in 2013/04. In recent decades, world corn trade grew and peaked in 2013/14 at 130 million tons, due to pent-up import demand following the U.S. drought and high prices in 2012/13. The outlook for U.S. corn exports is presented in USDA's Agricultural Baseline Projections, which provides 10-year projections for the U.S. and world agricultural sector for selected commodities.
Japan is the world's largest corn importer in most years. While producing almost no coarse grains, Japan is a very large meat producer and is a steady buyer of corn, with attention to quality. In recent years, Japanese imports of corn for livestock feed have stagnated, while imports for industrial use and starch manufacturing have increased some. EU corn imports have been variable in recent years, ranging from less than 3 million tons in 2009/10 to 16 million tons in 2013/14. The price of corn compared to EU wheat and policy decisions about import levies help account for the variation in import levels across years. South Korea is sometimes the second-largest importer of corn in the world. South Korea is a price-conscious buyer, willing to switch to feed wheat or other grains and ready to buy corn from the cheapest source. Mexico is a growing importer. While a large corn producer, Mexico processes much of its production of white corn into human food products, but has turned to imported yellow corn and sorghum for livestock feed to support increased meat production.
Foreign demand depends not only on importing countries' demand for feed ingredients but also on those countries' internal policy changes that adjust prices and/or the availability of competing products. Coarse grains can often substitute for each other in feed use. Corn competes with other feed grains, as well as with wheat and nongrain feedstuffs such as cassava. Oilseed meal and other protein sources serve mostly as complements to grains but can also be substitutes, especially those protein meals with low-protein content. Flexibility in many markets, however, is limited by the types of animals fed, the desire to maintain stable rations, local preferences, and import tariffs and laws. Importers not only substitute among grains but may switch suppliers of the same grain based on price, quality, availability, credit, or other trade services. Agricultural tariff schedules for World Trade Organization (WTO) member countries report the current maximum permissible duties.
For more information:
- USDA, World Agricultural Outlook Board, World Agricultural Supply and Demand Estimates (WASDE). Current forecasts for world corn and other feed grain trade (monthly).
- USDA, Foreign Agricultural Service (FAS), Grains: World Markets and Trade. Forecasts and historical data by country for major feed grains covering production, domestic consumption, and international trade (monthly).
- ERS, Outlook for U.S. Agricultural Trade. Latest information on U.S. farm exports, by commodity and region, as well as the trade outlook (quarterly).
- FAS, Production, Supply, and Distribution (PS&D) database. Data for more than 200 countries back to 1960 (monthly).
- FAS, Global Agricultural Trade System. Historical information on U.S. imports and exports (monthly).