Agricultural News
US Grain Industry Still Exporting Grain Despite Challenges of Government Shutdown
Mon, 14 Oct 2013 15:23:05 CDT
The U.S. Grains Council says the partial federal government shutdown has reverberated through global equity, currency and commodity markets. Without official data and statistics - the Council notes hog buyers are rethinking the way producers are paid, grain traders are wondering about crop production and equity traders are wondering about official jobs figures. But the Council says the U.S. commitment to exports remains steadfast and solid. Foreign market reaction to the shutdown is cautiously mixed - with the lapse in accustomed points of contact and data reports unsettling to some buyers. But trade continues.
Grains Council Director of Communications Marri Carrow is sharing the message in major Asian markets that the U.S. is open for business and Council Manager of Global Trade Kevin Roepke is encouraging importers to actively manage their risk to mitigate the increased uncertainty. Without the core government reports, he says the market lacks a clear direction and is vulnerable to various headline swings especially if and when the government fully reopens. Nevertheless, even after a shutdown, Roepke says you won't find a country or a government as dedicated to exports as the U.S.
The Grains Council points out that the U.S. kept export inspectors on the job despite widespread furloughs. Further, even with much of the USDA website offline, federal grain inspection reports are being released to the public. Roepke says the partial shutdown is a nuisance but a core of essential federal employees are on the job and the US Grain inudstry is finding ways to keep trade flowing.
One of the problems of the government shutdown is the lack of current production information- and that's not just for the US crop. USDA would have updated its World Agricultural Supply and Demand Estimates this past Friday morning, but the monthly report is unavailable because of the government shutdown. The U.S. Grains Council says early corn planting got underway in August in Argentina and continues through this month. Late corn is normally about 30-percent of the crop and is planted November through early January. The Council's consultant in that region says planting delays in the early corn will shift acres to the later crop. Conditions have been cool and dry. The dry weather may lead to acres shifting from corn to soybeans. As for pricing, the Grains Council says economics favor soybeans. CBOT corn prices have fallen and it costs more than twice as much to plant corn in the region. That could also shift some acres - especially if weather concerns remain in place. The last USDA report - released in September - projected Argentine corn production at one-billion bushels - nearly even with last year. The Council's consultant says that production estimate remains feasible with trend yields - but it's still too early to tell.
In Brazil - lower corn prices and a large carryover of corn negatively influenced planting decisions. Farmers chose not to plant as much of a summer corn crop. According to the Grains Council - an anticipated record soybean crop also played a part in the decision. The outlook for soybean exports next year along with the reduction in value of the Brazilian Real has farmers optimistic on soybeans. In September - USDA estimated 2.8-billion bushels of corn production in Brazil this year - down from 3.2-billion bushels last year. The Council's consultant says the estimate is a little low - but acknowledges it may be a bit early for a sound estimate.
To learn more about what the US Grains Council and their work to promote US feed grains internationally, click here for their website.
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