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A complex trade relationship

Record corn and soybean production in South America is changing the global trade dynamic. USDA Chief Economist Seth Meyer tells Brownfield the global export pie is growing and the piece of the pie that belongs to the United States will be a smaller percentage.

“But our export volumes won’t fall, they’ll grow more modestly,” says Meyer. “I do think we are introducing competition from the South Americans in a number of different ways. First, over time, you’ve seen the size of the soybean crop grow and we’ve almost established a just-in-time delivery system with the South Americans when it comes to soybeans. We produce and send a lot of it to China, then the Chinese pivot and they buy from South America when their soybeans are coming online,” explains Meyer. “We haven’t seen as much of that, historically, with corn, but that may change. We may develop a just-in-time delivery system for corn, but there are lots of uncertainties surrounding China and demand.”

Meyer says the trade relationships between the U.S., China, and South America are complex.

“The Chinese want to diversify sources and they want to control where they’re buying. I think it is a very complicated problem when it comes to trade with China. The South Americans will continue to be competitive.”

Meyer says he doesn’t expect bigger South American crops to have a significant impact U.S. production, which still must meet domestic needs. Meyer was part of the Country Elevator Conference in St. Louis.