Indonesia aims for self-sufficiency in corn

As part of the newly formed ASEAN Economic Community, Indonesian self-sufficiency in corn within the next two to three years has become one of the top priorities of the country’s President, Joko Widodo, according to Indonesia Investments.
Alongside greater freedom to trade between members, one of the Community’s targets is to improve food security in staple crops that include rice, cassava, soybeans and corn.
Indonesia is the leading corn producer in the region, with output in 2013 at more than 18.5 million tons, according to ASEAN statistics, followed by the Philippines with more than 7.3 million tons and Vietnam with almost 5.2 million tons. All three of these top producers, however, consume more corn than they produce; for Indonesia, consumption amounted to more than 20.8 million tons in 2013.
The main user of corn in Indonesia is the animal feed sector, with some also going to biomass power plants.
Key to increasing corn output is to raise the size of corn plantations, according to analysts, but competition with other land uses adds high costs to the challenges, as well as bureaucratic difficulties in land acquisition. Other industries that process corn also need to be established, they say.
Indonesia’s Agriculture Minister, Amran Sulaiman, is optimistic about the prospect of achieving self-sufficiency in corn next year through a number of state efforts, which include adding 1 million hectares of planted corn at an estimated cost of land and seed of IDR3.25 trillion (US$230.4 million). Planting will be encouraged of higher-yielding hybrid varieties and improvements in irrigation systems and mechanization will be financed. Training by experts and fertilizer subsidises are to be offered to farmers. The state logistics agency, Bulog, is to receive additional funding to manage the nation’s corn reserves and keep prices stable.
Despite the initiatives, the corn production target may be hard to achieve. A recent report in Jakarta Globe highlights the challenges of grain production in El Niño years and, learning from the experiences of global shortages and high prices in 2012, Bulog has been warned to increase stocks of rice, soybeans, corn and beef.
The president last week blamed Indonesia’s poor infrastructure for fluctuating prices and food losses for the country’s rural population, reported Asia One.

Mexico corn market changing due to lack of growth

Rabobank has published a report identifying structural changes that are emerging in the Mexican corn market, resulting from constraints in the growth of corn production.
According to the report, published by the bank's Food & Agribusiness Research and Advisory team, since 2009-2010, Mexican corn production has faced difficulties due to decelerating yield rates and declines in planted area. Rabobank expects this situation to continue for the next five to eight years and says that anticipated market conditions, including market failures, weather conditions and bearish prices, are unlikely to increase production.
As a result, Rabobank analyst Pablo Sherwell said he sees four key structural changes in the Mexican corn market:

• White corn consumption trend is declining after a historical increase.
• White corn imports have increased as demand destruction has not been high enough to compensate for the lack of production growth.
• As Mexico becomes a more active and sophisticated importer, it will look to import yellow corn from Brazil and white corn from South Africa, rather than relying only on the U.S.
• Yellow corn used for feed has been decelerating while other grains, such as sorghum and wheat, have been playing a more active role in feed.
"Mexican corn production has been stuck at 21 million [metric tons], as white and yellow corn levels struggle to surpass the 19 million [metric ton] and 2 million [metric ton] ceilings, respectively," said Sherwell. "Given current conditions, we expect this production level to hold at least until 2016-2017, but under certain conditions, there is potential for Mexican corn production to stay flat even as late as 2020-2021."
According to Rabobank, the current production level and expected continued lack of growth are driven by two factors. First, the planted area for Mexican corn is decreasing: from 2000 to 2012, the rain-fed area dropped from 7.34 million hectares to 6 million hectares, while the irrigated area increased from 1 million hectares to around 1.5 million hectares.
Rabobank expects the decrease in the size of the rain-fed area will continue to outpace, in absolute values, the increase in size of the irrigated area. Producers of rain-fed crops, usually farmers of small- to medium-size operations, have found better opportunities in producing other crops, including vegetables such as avocados or even sugarcane, as has been seen in the State of Jalisco. In addition, some producers have switched from corn to other crops due to market failures, such as limited access to rural roads and markets or lack of storage, which have been a disincentive to corn production.
The second factor limiting production growth has been decelerating yield growth, which is largely the result of expected lower prices that reduce farmer incomes, discourage the use of fertilizers and reduce investment. Furthermore, the majority of the planted area is rain-fed, and the country has been experiencing recurrent weather events. Yield growth is also being impacted by the lack of new technological adoptions, such as inadequate irrigation infrastructure, absence of high-tech machines such as harvesters and the modest use of hybrid seeds.
Rabobank's expectations for the Mexican corn market will hold if current conditions remain constant in the long run. However, there are many factors beyond weather improvements that could change the bank's forecasts, such as the adoption of better technologies, including the use of hybrid seeds. In addition, the acceleration of new technologies in irrigation, planting and harvesting machinery, technical assistance, storage facilities, as well as the improvement of market access, would erode the current resistance in corn production growth.

South Africa corn production estimated up for 2012–2013 season

South Africa's corn production could increase 4.4 percent in the 2012–2013 season when compared to the 2011–2012 season, according to the Crop Estimates Committee, hitting 12.4 million metric tons by the end of harvest.
The estimate is more than the 11.8 million metric tons of corn harvested in 2011–2012, and includes a 10 percent increase in yellow-corn output to 5.6 million metric tons, while the harvest for the white variety will rise 0.1 percent to 6.75 million metric tons. “Production will rise because there was an increase in plantings and more yellow corn was planted in areas where there is irrigation,” raising yields, said committee spokesman Baldwin Netshifhefhe.
South Africa's wheat estimate sits at 1.92 million metric tons for the 2012–2013 season, according to the committee, matching its previous prediction. Soybean output will rise 41 percent to 914,350 metric tons, while sunflower production will increase 20 percent to 624,210 metric tons, said Netshifhefhe. The sorghum harvest will be 34 percent larger.

Strong Brazil crop anchors increased global corn production

Global corn production estimates for 2012-13 are raised 2.1 million tons, largely based off of the strength of the Brazilian crop, whose production is raised 1.5 million tons. Those figures were released February 8 in the United States Department of Agriculture’s World Agricultural Supply and Demands Estimates report.
Higher acreages planted and stronger yields for the first-season crop and good early-season prospects for second-season corn are credited for the hike in Brazilian production.
The 1.5 million ton climb puts Brazil near its record increased levels it set a year ago, said USDA chief economist Joe Glauber. If the projections hold true, Glauber said Brazil could become the world leader in corn exports.
“They’ve really become a major corn producer. That’s the first time — in our records at least — that another country has become the top exporter in the world,” said Glauber.
Adding to the overall world corn production increase are a 0.8 million ton increase in Mexico, 0.6 million ton hike in India, and an increase of 0.4 million tons in the Ukraine. Those gains more than offset the drop in Argentinian production, which has been lowered by 1 million tons. Glauber explained that the country has been experiencing dry conditions, but its corn production was still 29 percent above its crop from the prior year, which was also hammered by drought.
The increase in foreign corn production signals a projected 50 million bushel decrease in US corn exports. Slow sales and shipments are adding to those lower corn export figures.
The projected corn ending stocks are raised 30 million bushels. Pressure remains on the feed markets, as U.S. corn use for ethanol production was unchanged and corn use for sweeteners and starch is raised 20 million bushels.
To view the full report click here. 

Ukraine corn exports up 21 percent

As of February 3, Ukrainian corn producers exported 7.95 million tons of corn — 1.4 million tons more than 2012 in a year-on-year comparison, according to the Agrarian Ministry of Ukraine. Following the world's leading corn exporters — the U.S., Argentina and Brazil — Ukraine has become a top corn supplier among European countries.
In 2012, Ukraine produced about 20 million tons of corn; more than half of it the country is ready to sell to foreign buyers, said Ukrainian agrarian minister Mykola Prysyazhnyuk. Major consumers of Ukrainian corn in January–November of 2012 were Belgium, Egypt, Ireland, Italy, Portugal and Spain.
In 2012, Ukraine began cooperation with China, the world's largest corn consumer, regarding the supply of corn. The eastern Asian nation plans to buy approximately 3 million tons of Ukrainian corn per year. To help boost Ukraine's corn production, in July 2012, China provided a US$3 billion loan for Ukraine's agricultural sector. The loan is intended to finance the increase of the trade volume, raise productivity and stimulate equipment modernization in the Ukrainian agricultural sector. With the money Ukraine will be able to purchase crop-protection agents, seeds and equipment from China, as well as invest in land cultivation and set up a plant for organic fertilizer processing and crop-protection agent production.
Currently, Ukraine has a 12.9 percent share of the global corn market. In 2011, Ukraine took the third spot in the global corn supplier rating, being the second runner-up to the U.S. and Argentina.

Syngenta net income up 17 percent in 2012

Syngenta's net income reached $1.87 billion in 2012, up 17 percent from 2011's $1.6 billion, according to the company's latest financial report.
The company reported a strong fourth quarter in North and Latin America, as well as double-digit seeds growth in all regions. “In 2012, crop prices rose sharply as adverse weather conditions in several regions resulted in significant production shortfalls, once again highlighting the fragility of global supply," said Syngenta CEO Mike Mack. "Growers in the affected regions had to adapt quickly in terms of planting and investment decisions, while also dealing with ongoing challenges such as weed and insect resistance. The strong growth in Syngenta’s sales reflected our flexibility in providing solutions across crops and, increasingly, in addressing agronomic challenges through our integrated offers. These are proving their worth in developed and emerging regions alike, contributing to growth rates of eight percent and 11 percent respectively.
“Since the announcement of our new strategy two years ago, we have been driving the development of our portfolio by crop," he said. "The results already achieved in the field and the potential for new integrated offers have enabled us to increase target sales for our eight strategic crops to $25 billion by 2020. In addition, last year we made a number of acquisitions to secure new technologies. We were able to do so while maintaining a strong balance sheet as evidenced by the proposal of another substantial increase in the dividend.”
Syngenta has said it plans to invest $77 million in the expansion of its corn seed production facility in Formosa, Brazil. Annual capacity will be quadrupled to 1.6 million bags by 2015. "Brazil is already among the world's top three corn producers and has tremendous long-term growth potential," said Syngenta's Chief Operating Officer, John Atkin. "The Formosa expansion will help us meet increasing grower demand for our leading hybrids and our new trait combinations. These will also form part of our new integrated solutions which focus on grain quality, water efficiency and land optimization."

China to produce more corn than rice for first time

China will produce more corn than rice in 2013 for the first time in the country's history, thanks to a more affluent middle class and its demand for a more protein-rich diet, according to the U.S. Grains Council.

Demand for meat in China has experienced significant growth over the past 20 years, with poultry consumption increasing by 300 percent. During that period, pork consumption increased by 85 percent and beef consumption has increased 155 percent. At the same time, demand in the U.S. has remained relatively static for pork and beef, which have risen only by six and three percent, respectively. Only the poultry sector made major gains, but with only a 45 percent increase in demand, the gains seem low compared to those made in China.

While rice remains a staple in China, says the U.S. Grains Council, as diets shift toward protein-rich foods, the livestock sector demand for feed ingredients such as corn will increase both in the U.S. for export and overseas for domestic industries.

Canada corn belt growing as demand increases

Global corn demand has outstripped supplies in three of the last four years, and hospitable growing weather and corn varieties that mature faster from Monsanto and DuPont have led Canadian farmers to switch to corn as a viable crop, according to reports.
Canadian planters sowed a record 121,400 hectares of corn in Manitoba, Saskatchewan and Alberta in 2012, compared with an estimated 96.9 million acres sown in the U.S. Farmland values nationwide increased 27 percent from 2007 to 2011, to C$1,610 (US$1,616) per acre. U.S. farmland prices rose 19 percent in the same period, to $2,390 per acre. This new, expanded corn belt is turning Canadian farmland into a long-term investment play on global warming, said Tom Eisenhauer, president of Ottawa-based farmland investment firm Bonnefield Inc. “You can do a lot of different things here with a longer growing season,” he said.

The growth in Canadian corn is also encouraging Cargill Inc. to invest in grain storage in Canada, according to CEO Gregory Page, and the prospect of new demand is pushing DuPont Pioneer, a seed division of DuPont, to improve its short-season crop varieties.

Brazil may become number two global corn exporter

Brazil could jump ahead of Argentina to become the world's number two corn exporter in the 2011–2012 marketing year, according to government food-supply agency Conab, which raised its estimates for Brazil's corn exports to 17.5 million metric tons.
That number is up 88 percent from the 9.31 million metric tons exported in 2010–2011, and up from Conab's previous estimate of 16 million metric tons. The country harvested a record crop, bringing production to 72.6 million metric tons, according to Conab. Usually, Brazil keeps most of its corn for domestic use; however, the U.S. drought, which led to high grain prices, has made the export market an attractive one.
Since the 2011–2012 marketing year began in February, Brazil has exported 8.56 million metric tons, according to the Trade Ministry. Almost 90 percent of that was shipped from July through September, with the country setting back-to-back records for monthly corn exports in August and September. The biggest importers of Brazilian corn so far have been Iran, Egypt and South Korea. Brazil has also exported 106,666 metric tons of corn to the U.S.

Argentina corn growers request lift of export cap

Argentina's corn producers are asking the government to lift the cap on exports, saying they can boost output by up to 60 percent to take advantage of rising foreign demand due to the U.S. drought.
Growers could produce up to 31 million metric tons of corn in the 2012–2013 season if a 15 million-ton cap on exports is lifted, said the Argentine Association of Regional Consortia for Agricultural Experimentation. Production in the current 2011–2012 crop year is estimated at 19.3 million metric tons, according to the Buenos Aires Cereals Exchange. “This should be the corn year for Argentina,” said the association. “Should the government announce the entire lifting of corn export quotas, farmers would have enough confidence to increase their planting.”
Argentina increased its quota in July from 10.5 million metric tons.

Ukraine corn harvest may reach 24 million metric tons

Ukraine’s 2012 corn harvest may reach 24 million metric tons as farmers increase their planting, according to French farm adviser Agritel.
The area of corn planted in Ukraine rose to 4.5 million hectares from 3.5 million hectares in 2011. Production potential is “very large” because weather conditions are mostly favorable for developing crops, said Agritel. A combination of summer temperatures and frequent downpours in central Ukraine are providing the water required for growth. Taking into account current weather forecasts, only the southern regions of Odessa, Nikolaev, Kherson and the Crimea still face drought concerns.

Global corn crop forecast raised to 932 million tons

Global corn production will reach 932.11 million metric tons in the year starting July 1, according to Informa Economics Inc.
In April, Informa forecast output at 918.599 million tons, up from an estimated 868.017 million harvested in the current year.

South America drought causes irreversible damage to corn crops

Brazil and Argentina are expected to lose 11 million metric tons of corn output due to a drought that has caused irreversible damage to South America's corn crop, according to forecaster Agroconsult.
Estimates in December 2011 had Argentina's harvest at 27 million metric tons of corn; now, Agroconsult puts the number at 20 million metric tons. Brazil's harvest has been cut to 61 million metric tons from 65 million metric tons. South America's soybean output will also be harmed by the drought, according to Agroconsult. Soybean production in Argentina has been cut to 49 million metric tons from 53.5 million metric tons, while Brazil's has been reduced to 73.5 million metric tons from the 75.2 million metric tons estimated in December 2011. Brazil is the third-largest producer of corn in the world after the U.S. and China. Argentina is the second-largest exporter of corn in the world after the U.S.

Kenya corn production may decline due to fungus

Kenya's corn production may decline as a result of a fugal disease that has already destroyed more than 1,000 acres of the corn crop in the southwest part of the country, according to the Kenya Plant Health Inspectorate Service.
The fungus is still undergoing testing for identification. Symptoms include leaf discoloration and wilting.

Phillippines 2011 corn production to be lower than expected

The Agriculture department of the Phillippines expects 2011 corn production will be lower than the expected target of 7.26 million metric tons due to the effect of typhoons on that country's output, according to a report.
“We are not confident we will hit the target [for corn production] for 2011, but it will be close, based on my assessment,” said Edilberto M. de Luna, assistant secretary for field operations and national corn program coordinator. “If there will be a variance, it will be about 200,000 to 250,000 MT due to accumulated losses from the typhoons.”  Philippine Maize Federation Inc. president, Roger V. Navarro, said the group also does not expect corn output to reach the 2011 goal due to a dry spell that hit Region II, a major corn producer, in mid-2011, delaying planting and reducing harvests. “We think it reached 6.9 million MT to 7 million MT last year," said Navarro. "There was a dry spell sometime in June to July in Region II which we think had an impact on pollination and production." According to de Luna, corn production of 7.856 million MT is the target for 2012. 

Argentina may see record corn crop in 2011-2012 season

Argentina corn farmers may produce 9.1% more than forecast, bringing their harvest to a record 30 million metric tons of corn in the 2011-2012 season, due to ideal weather conditions, according to the country's corn and sorghum trade group.
The U.S. Department of Agriculture and Argentina's Agriculture Ministry forecasts list outputs of 27.5 million metric tons and 28 million metric tons, respectively. Very good soil moisture and optimum temperatures are contributing to the potential record, said Martin Fraguio, executive director of the trade group Maizar. “The climate is much better than expected,” said Fraguio. “The expectation was for a very aggressive La Niña this year, and it hasn’t been. This is an ideal year."

Bulgaria's 2011 corn production increases 6.2%

Bulgaria's 2011 corn production increased by 6.2% year-on-year, according to data from the Ministry of Agriculture and Foods.
As of November 17, a total of 98% of the corn has been harvested. Bulgaria's corn production is expected to total about 2,050,000 metric tons, an increase of 120,000 tons over 2010. Much of the increase is due to the annual rise in the acreage planted with corn in Bulgaria, as 2.88 million decares were planted in 2009, 3.14 million in 2010 and 3.76 million in 2011. 
A total of 9.8 million decares of wheat were planted in Bulgaria in fall 2011 compared to 9.2 million in 2010 and 9.6 million in 2009, according to the Agriculture Ministry. Bulgarian farmers planted 1.62 million decares of barley in 2011, up from 1.61 million in 2010, but down from 2.01 million decares in 2009. Rapeseed, an emerging energy crop, was planted on 2.4 million decares in fall 2011, up from 2.1 million in 2010 and 1.8 million in 2009. 

France corn harvest estimates up after summer rains

France’s corn harvest will be higher than previously expected after summer rain boosted production, allowing for increased exports, according to crops office FranceAgriMer.
Current forecasts predict that farmers will harvest 14.75 million metric tons of corn, compared to 2010's 13.8 million metric tons and up from the previous estimate of 14 million metric tons. Corn futures in Paris have dropped 19% in 2011, and weekly corn-export commitments for the 27-nation bloc were 202,515 metric tons in the seven days through October 4, the highest level for one week in at least seven years, according to the EU.
Corn exports are expected to climb to 6.49 million metric tons from 5.6 million metric tons in the 2010-11 season, FranceAgriMer estimates. This number is up from a previous outlook for shipments of 6.29 million metric tons. 

Argentina corn prices drop after meeting government quotas

Corn in Argentina closed at $158 per ton, roughly $3.95 per bushel, on Sept. 9 — close to a 50% discount relative to U.S. prices — as farmers there struggle to sell stocks after meeting government export quotas.
The Rosario Cereals Exchange numbers represent a 15% drop in prices, compared with the Chicago Board of Trade, where prices have grown 17%. “The price differential is terrifyingly high because Chicago is flying and Argentina hasn’t followed,” said Ramiro Costa, chief economist at the Buenos Aires Cereals Exchange. Prices are falling in Argentina because the “market is closed,” after producers met the government’s quota of 12 million tons of corn for 2011 export, said Costa.
Argentina’s government demands that corn producers earmark 8 million tons of corn per year for domestic consumption. Argentina’s output was about 21 million tons in the 2010-2011 season. 

Ukraine wheat, corn exports may double in next year

Ukraine may double its wheat and corn exports in the next marketing year, which began on July 1, according to researcher UkrAgroConsult.
Estimates show the country exporting roughly 10 million metric tons of corn and the same amount of wheat, according to Serhiy Feofilov, director of UkrAgroConsult. Ukraine exported 4 million metric tons of wheat and 5 million metric tons of corn in the previous year, when the country had quotas in place to protect domestic supply amid poor harvests due to a drought.
UkrAgroConsult raised its corn production forecast to 15.5 million metric tons from August's 15 million metric ton estimate, said Feofilov. Wheat production was dropped to 20.3 million metric tons from an August estimate of 20.6 million metric tons.