The U.S. Meat Export Federation has established the results of a study focused at calculating the value delivered to U.S. corn producers through exports of red meat.
The original 2016 study, as well as the 2018 follow-up, were conducted by World Perspectives which is a leading agricultural consulting firm.
The original study, The Intersection of U.S. Meat Exports and Domestic Corn Use, determined that in 2015 exports of U.S. red meat accounted for 11.7 million tons of combined corn and Dried Distillers Grains. In its update, WPI concluded that 2018 beef and pork exports will use a combined total of 14.9 million tons of corn and DDGS, which equates to an additional 459.7 million bushels of corn produced an increase of 29 percent over the 2015 projections.
Other highlights from the updated study:
- 1 in every 5 bushels of added feed demand for corn is due to beef and pork exports.
- About 11 percent of the price of corn this year will be derived from red meat exports.
- Red meat exports’ impact on corn price is 39 cents per bushel which is based on annual average price of $3.53 per bushel.
- There would be a loss of $5.7 billion in corn value without red meat exports.
USMEF receives outstanding support from the feed grain and oilseed industries, because these producers understand that red meat exports boost the profitability of their largest customer the U.S. livestock industry.
The goal of the study was to provide specific data on the data on the return producers receive from their investment.
Resulting from the study that was conducted they had a strategic plan objective to work with groups such as USMEF to grow animal agriculture exports by 40 percent.
Beef and pork producers are a large and valued customer of corn, both domestically and abroad. It is important to work with our partners to grow demand and work towards mutually beneficial goals.
Dave Juday, a senior analyst for WPI, explained that exports of both U.S. beef and pork have grown dramatically since 2015, further enhancing the benefits delivered to corn producers.
While the original study used 2015 export numbers, combined U.S. beef and pork exports this year should be about 26 percent above the 2015 totals. Looking forward in the study, they are projecting that the baseline over the next 10 years will grow about 10 percent more than USDA had originally thought back in 2016.
The updated study also took note of the importance of exporting alternative cuts of beef and pork that are often underutilized in the domestic market.
“Over the baseline period of 2018-2027, the combined value of beef and pork exports to corn and DDGS is projected to reach $22.2 billion to $19 billion for corn and $3.2 billion for DDGS. This cumulative 10-year total is almost 19 percent more than the $18.7 billion projected in 2016 using USDA’s 2016-2025 long term baseline meat export forecast,” Juday said.