Study Finds Red Meat Exports Deliver Excellent Returns to U.S. Corn Producers

The U.S. Meat Export Federation (USMEF) commissioned a study aimed at quantifying the value delivered to U.S. corn producers through exports of beef, pork and lamb. The independent study was conducted by World Perspectives, a leading agricultural consulting firm. Key findings were unveiled at the USMEF Board of Directors Meeting and Product Showcase by Dave Juday, World Perspectives senior analyst. Highlights from Mr. Juday’s presentation are included in the attached audio report. On a per-head basis, 800-pound calves fed to 1,360 pounds each consume 35 bushels of corn and 806 pounds of distiller’s dried grains with solubles (DDGS). Each 12-pound pig finished to 284 pounds consumes 11 bushels of corn, 37 pounds of DDGS and 136 pounds of soybean meal. World Perspectives analyzed feed rations and U.S. livestock production practices to establish feed use and then used beef and pork export data to determine the amount of consumption attributable to red meat exports, finding that 2015 exports accounted for:

• 355 million bushels (or 2.1 million acres) of corn
• $1.3 billion in value to corn
• 1.48 million tons of DDGS (169 million bushel equivalent)
• $205.4 million in value to DDGS
• 11.7 million tons (or 3.1 million acres) of combined corn and DDGS fed

Looking ahead, red meat exports’ positive impact on the corn sector looks even stronger. The study projects that indirect exports of corn through red meat exports will grow from 355.5 million bushels in 2015 to 482.4 million bushels in 2025 – an increase of nearly one-third. Indirect exports of DDGS would jump from 1.48 million tons in 2015 to 2.14 million tons in 2025 – a 44 percent increase. Over the next 10 years, the value of red meat exports to corn is estimated to be about $16.1 billion.


TRANSCRIPT:

Joe Schuele: The U.S. Meat Export Federation commissioned a study to quantify the value U.S. red meat exports return to U.S. corn producers. The study was conducted by World Perspectives, and senior analyst Dave Juday has more details in the USMEF report.

Dave Juday: What we tried to do in this report is see how red meat exports affect the price of a bushel of corn, the amount of corn that is used, how DDGs that are used by renewable fuels actually rely on red meat exports as well to keep their margins up. We did rely on the USDA baseline projections. Their projection was that corn use over the next 10 years for feed for domestic livestock – between 10 and 12 percent of that being exported through red meat – will grow 17 percent. Food use will go down 2 percent and biofuel use will go down 3 percent. So clearly what’s driving the market is feed use and herd expansion, and what’s driving that is exports. One out of every three additional pounds of U.S. beef produced over the next 10 years will go to the export market. One out of every 2.75 pounds of additional pork produced over the next 10 years will also go to the export market.

Joe Schuele: So what does this mean for corn producers?

Dave Juday: Instead of a season average annual price of $3. 60 a bushel, it had been about $3.15 a bushel – a loss of about 45 cents a bushel, which would have amounted to $6 billion to the corn industry last year. Over the next 10 years, the value of red meat exports to corn is estimated to be about $16.1 billion. Eighty-three percent of corn is produced by the top 10 states. So if you divide that $16 billion among the top 10 states, you can see the kind of impact that is going to have on local economies.

Joe Schuele: For more information, please visit USMEF.org. For the U.S. Meat Export Federation, I’m Joe Schuele.