FORT COLLINS, Colo. – The United States for many decades had been known as the world’s breadbasket, leading the way in corn, soybean and wheat exports. But although trade volumes remain historically high, the country’s relative impact on global exports is smaller than ever.
High grain and oilseed prices, increasing global demand and weaker currencies have all contributed to the decline in US export dominance. In recent years, US crop shortfalls between 2010 and 2012 permanently reduced the country’s market share and contributed to the rise of competing producers.
Today, the United States exports just over a quarter of the world’s corn, wheat and soybeans, compared with more than half some 30 years ago. The country also grows about a quarter of those global crops, a smaller portion than in previous decades, though the decline is much less extreme versus that of exports.
Despite the slip in export prominence, the US Department of Agriculture predicts record domestic export volumes of corn and soybeans in the 2020-21 year ending on Aug. 31.
That is due to increasing global demand led by China.
US wheat exports are seen at a four-year high in 2020-21, which ends May 31, but they will remain below the longer-term average.
Soybeans have undergone the most dramatic shift in export share. Huge leaps in US soybean technology and research in the mid-20th century rendered the country the only supplier of the oilseed by 1970, accounting for nearly 95 percent of world exports.
Brazil began emerging as a major soybean producer about 50 years ago, though that expansion has been the most pronounced in the latest decade. Brazil became the top exporter in 2012 after two disappointing US harvests, and the South American country now accounts for half of global soybean exports while the US share is about 35 percent, down from nearly 60 percent in the late 1990s.
Roughly half of today’s US soybean crop is devoted to exports, and the rest is crushed into protein-rich meal for animals. That share has increased in recent decades, as only about 35 percent was exported in 2000.
The United States comfortably remains the top corn supplier, but its export dominance also fell victim to the drought-stricken 2012 US harvest. In 2005, US exports accounted for about 60 percent of global corn trade, though 10 years later that share plunged to 33 percent, where it resides today.
In the 1970s and 1980s, as much as 80 percent of the world’s annual corn shipments came from US shores. At that time, more than a quarter of the US corn crop was exported. But only around 15 percent is exported today, partially due to increased competition with ethanol producers that began about 15 years ago.
The United States was on top of the wheat export market until midway through last decade. Wheat production and specifically export capabilities have recently boomed in the Black Sea, and combined shipments out of Russia and Ukraine at present are more than double annual US volumes.
US wheat exports are the second-largest behind Russia, accounting for roughly 14 percent of global trade. Canada is a close third, and those three countries compete with wheat from Australia, Argentina, Europe and Ukraine.
Ten years ago, the US wheat export share was around 23 percent, down from a third in the early 1990s and more than 40 percent in the 1970s. About half of the US wheat crop is exported, largely unchanged over the last two decades.
Crops are sold in dollars on the international market, so non-US farmers can be particularly eager to sell their products when their own currency weakens, increasing the availability of exportable supply. Widespread crop failures, like the 2012 US harvest, boost global prices and further entice production increases outside of the United States. – Reuters