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.
“What we tried to do in this report was to see how red meat exports affect the price of a bushel of corn, the amount of corn that is used and the use of DDGs,” said Dave Juday, World Perspectives senior analyst. “USDA’s baseline projections show that corn use over the next 10 years for feeding domestic livestock will grow 17%.”
Using those same projections, food use is expected to decrease by 2% and biofuels use will go down by 3%.
“Clearly what is driving the market is feed use and herd expansion and what’s driving that is exports,” Juday said. “One out of every 3 additional pounds of U.S. beef produced over the next 10 years will go to the export market and one out of every 2.75 pounds of additional pork produced over the next 10 years will also go to the export market.”
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% increase. Over the next 10 years, the value of red meat exports to corn is estimated to be about $16.1 billion.
“Instead of a season average annual price of $3.60 a bushel for corn, it would’ve been about $3.15 a bushel, or a $6 billion difference for the corn industry,” Juday said. “Eighty-three percent of corn is produced by the top 10 states, so if you divide that $16.1 billion among those states you can see the kind of impact that is going to have on local economies.”