THE CUBAN EMBARGO AND WHAT IT MEANS FOR AMERICANS

The U.S. is again trying to harden the U.S. trade embargo against Cuba.  The trade embargo is called “el bloqueo” or “the blockade” by the Cubans and is basically a refusal to trade most goods with the country.  President John F Kennedy placed the ag embargo on October 19, 1960.

In the past couple of years, the U.S. was starting to soften to Cuba and Illinois got particularly excited about the opportunity to trade with the country.  Not only do they desperately need the food we could provide, but they are also a natural market for the U.S. being so close.  AND, with Illinois positioned right on the Mississippi River, we are the natural, lowest cost provider to get food and grain to them.

But now, as the U.S. again begins to rethink trade with Cuba, Argentina and Brazil will be able to continue providing what the Cubans need, despite added transit time, higher freights and additional pest control costs.

Cuba is a 900,000 metric ton (35.4 million bushels) market for corn. Based on recent export sales, capturing this demand would make Cuba the 11th largest customer for U.S. corn. In addition, free flow of grain to Cuba would help capture sales to the Dominican Republic and even Puerto Rico, worth hundreds of millions of dollars per year.

Capturing the Cuban market wouldn’t change everything for Illinois corn farmers, but it would make an impact.  And when corn prices are below the cost of production (and Cubans are starving for real food!), every little bit helps.

Read the full article here: http://www.grains.org/news/20170706/hot-topics-cuban-embargo-will-hurt-grain-trade-despite-continued-engagement


Lindsay Mitchell
ICGA/ICMB Marketing Manager

ALL WE WANT FOR CHRISTMAS: TRADE OPPORTUNITIES

christmas-listIt stands to reason that right after an investment in getting our grain to a global market, we’d like to see increased market opportunities, right?

Check out our first ask of Santa here.

The opportunities are there.  And Illinois believes we can compete with anyone in the world in terms of grain quality, quantity, and price.

WE JUST NEED GLOBAL MARKET ACCESS!

 

Trade deals are really important when it comes to selling more corn to more countries all over the world.  We’d definitely like to see trade agreements like the Trans Pacific Partnership (TPP) pass Congress and become effective.

TPP won’t increase the amount of corn we send overseas, but it will increase the amount of red meat we sell overseas.  More meat sold means more livestock production here in the U.S. which means more animals to eat more corn!  It’s a win for everyone involved.

Overall though Santa, we’d love it if you’d just create a blanket of positive trade talk over Washington, DC.  Will the incoming administration support trade in the end?  We’re just not sure and we’d love your help on this!

Note: Trade is so important to Illinois.  About half of our corn leaves the state – much of it to other countries like Mexico and Japan.  What leaves our state and doesn’t go overseas is feeding livestock in other states like Texas and THEN going overseas.  This is because of our position on the Illinois and Mississippi Rivers – we will never stop advocating for more and more trade!

There’s also this.  Trade is important from a humanitarian level.  We have to trade to get the food from where it’s produced (the U.S., Brazil, Argentina) to where the hungry people are.

Don’t ever forget about the hungry people Santa.

Mitchell_LindsayLindsay Mitchell
ICGA/ICMB Marketing Director

WHAT YOU NEED TO KNOW ABOUT THE TPP

what_is_tpp
1. What is the TPP?

TPP stands for Trans-Pacific Partnership. The TPP creates rules and agreements for trade all over the world. The amount of tax on imports and exports and other regulations for countries are laid out in this agreement. A review of the effects that the TPP will have on agriculture in the United States can be read in full here.

2. What will the TPP do for United States Agriculture?

The implementation of the TPP will increase cash receipts for livestock. What this means is that the United States will trade more livestock products to other countries, increasing income from what we get from these goods now. This estimated raise in livestock exports pairs well with the expected decrease in the country’s trade of corn. This is because we will be able to keep that corn in the country and use it to feed the higher number of livestock that we are growing for trade. This use of corn is adding more value to the industry than it would if it was simply traded in bulk. Also, the overall farm income is expected to increase $4.4 billion for the country which is a very positive result for agriculture.

3. What will the TPP do for Illinois Agriculture?

1As the deal increases cash receipts for the entire country, it would also do great things for Illinois agriculture. The chart shown explains that cash receipts for many Illinois products increase greatly with implementation of the TPP. This increase in income also comes with an estimated 960 jobs into the Illinois economy, according to the American Farm Bureau Federation. Corn is the biggest agriculture industry in Illinois and the exports from the country are expected to decline; however, Illinois is a perfect example of how that corn that is not being exported can be used to raise livestock. The TPP will also increase overall trade for other Illinois products such as pork, soybeans, and processed foods.

This trade deal is a big step for agriculture and the economy of the country. The American Farm Bureau Federation stresses the importance of the United States getting on board with the deal quickly. Other countries are ahead of the United States in making trade agreements that could help their economies.

global-tpp-picture

There will soon be more news on the ratification of this in the United States.

Any questions? Ask in the comments!!

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Amanda Rollins
Illinois State University

EVERYTHING YOU WANTED TO KNOW ABOUT CORN IN ILLINOIS

1. Illinois corn farmers are growing field corn, not sweet corn.

I know this is confusing – but 99% of the corn grown in Illinois is not the corn you eat on your dinner table.  That corn is sweet corn, bred for its sugar content so that it tastes so amazing!  The corn we grow in Illinois is field corn (or dent corn) that is bred for starch.

Field corn is a grain.  Sweet corn is a vegetable.

2. Illinois planted 88 million acres of field corn and 555,000 acres of sweet corn.

We also grew 13.6 billion bushels of field corn compared to 137 million bushel equivalents.(Equivalents because sweet corn is weighed still on the cob so we have to remove the cob to make them comparable.)  And the crop value of Illinois field corn is $49 billion – considerably more than sweet corn’s $1.02 billion value.

field-corn-sweet-corn3. The two plants even look completely different in the field.

Sweet corn is shorter, has larger tassels visible, and is often a lighter green.  Field corn is taller, has smaller visible tassels, and is darker green.  We harvest sweet corn in the milk stage in the middle of summer.  We harvest field corn in the fall when the plant starts to die and the corn kernels dry up.

4. Illinois is in the top five states in ag cash income and crop cash receipts.

In English, this is code for the Illinois economy is built on ag.  It’s one of our top industries.  Illinois is the number 2 corn producer (behind Iowa), the number 3 ethanol producer, number 2 in pork production, and the largest exporter of corn in the country!

5. Most of the corn grown in Illinois is exported out of the state.

where-does-corn-goIn Illinois, 47 percent of the corn is exported out of the state.  Of the remaining corn, 27 percent is made into ethanol, 21 percent is used for processing (corn plastic, high fructose corn syrup, etc), and 5 percent is used to feed cows, pigs, and chickens.

Of that 27 percent used for ethanol, 1/3 is sold as a by-product of ethanol production that makes an excellent livestock feed.  So some of the ethanol corn is actually used twice – by the ethanol industry and the animal agriculture industry.

6. Want to know more?  Follow us on social media!

IL Corn has many ways you can learn more about corn grown in our state!  Check us out on Instagram, Snapchat, Facebook, Twitter, Pinterest, and YouTube!

FIVE THINGS TO KNOW ABOUT YOUR FUEL

When I pull into the gas station I am normally rolling in on fumes just hoping I don’t run out of gas. I pull into the nearest possible pump and begin fueling. Normally I am in such of a hurry that I don’t take time to stop and look at what I am actually putting into my vehicle. Turns out, it may be more than just fuel. It is a fuel blend that may be doing more than you think… ethanol. Here are five things you may not have known about ethanol in your fuel.

  1. High Octane

4-5-16Ethanol_Photo_1You may be asking yourself, what does high octane mean? I myself was unsure of what it meant until I researched it in further detail! According to the Federal Trade Commission, octane ratings are a measurement of the ability of gasoline to repel engine knock, which is a rattling noise resulting from a premature ignition of a condensed fuel-air blend in one or more cylinders. Ethanol happens to be considered an octane-enhancing additive. E10, which is a ten percent ethanol blend in gasoline, happens to be offered in all grades of gas and has the ability to be used in most models of vehicles regularly.

  1. Low Cost

Ethanol is not the only high-octane enhancer that has been used. Aromatics have similar high-octane enhancers compared to ethanol and have been used in many blends of gas in the past. Although, aromatics are a more expensive commodity as compared to ethanol. In 2013 an aromatic called benzene was the highest prices aromatic, but has since disappeared in early 2015. According to AgFax, a study was done that showed that purchasing ethanol, as a high-octane blend, was cheaper than the average price of three high-octane aromatic enhancers.

  1. Renewable

Ethanol is considered a renewable fuel. It is made from a wide array of plant materials commonly known as biomass. One industry that specifically benefits from ethanol is corn production because corn has high starch content. Nearly 40% of the U.S corn production is being used for the ethanol industry. Utilizing these ethanol blends in today’s gasoline is a successful way to oxygenate gasoline and reduce air pollution.

  1. American Made

4-5-16maxresdefaultMany ethanol production plants are located in the Midwest because there is a large majority of corn production in the Midwest. According to the U.S. Department of Agriculture about 90% of ethanol is transported by train or truck while the remaining 10% is traditionally transported by barge. Therefore, a large majority American Made ethanol remains within the United States for gasoline blends such E10 or E85.

  1. No wars

Because Saudi Arabia and the Middle East is a large producer in the production of petroleum, this causes great conflict with buying and importing into the United States. Often prices are extremely high. The advantage of American made ethanol is knowing where it is coming from. We are extremely independent in the production of ethanol, which gives us advantages both from an economic and environmental standpoint.

Next time you stop to fuel up… consider that you are putting more than just regular fuel in the tank. You are putting in a blend that is so much more.

Nicole Chance

 

Nicole Chance
University of Illinois

THE REASON FOR UTTERLY LOW MILK PRICES

Milk is one of the integral parts of my breakfast. Whether served as a full glass or mixed in with my favorite cereal, I have milk every day. Drinking milk is an old standby for parents: it develops strong bones and gives you the Vitamin D you need daily. This adage may gain new ground, because right now milk is incredibly cheap. Prices in places like Wisconsin are down a third from a five-year high. But why is it so cheap? Let’s take a look.

3-28-16cows
Credit: Peter Thomson, La Crosse Tribune

Shipping Out Isn’t Shaping Up

America exports roughly 15% of its milk production overseas. Yet, different countries have stopped importing American dairy. China, a major importer of American dairy, has an abundant supply that results in smaller milk purchases. It also does not help that economic sanctions against Russia have halted exporting to the Asian country. Exporting less creates a higher American supply than demand for milk. This overabundance of supply causes prices of milk to plummet.

Milk Means More…Competitors

While exports represent 15% of American milk sales, other countries are coming to play. China has begun producing more milk than it imports. Additionally, New Zealand is a major competitor, only adding to the growing milk production. Equally, this competition forces market prices to decrease. Therefore, the declining exports yet growing milk production by competing countries creates an atmosphere that demands unfavorable action to move milk off the grocery shelves (e.g. slashing prices).

The Cost of a Dollar

The rising strength of the U.S. dollar is another important factor to consider. A strong dollar may signal a stronger U.S. economy than seen in recent years, but that makes American dairy less attractive. Rather than spend loads of money on high-cost milk, importers might choose cheaper options from different countries. Reports of federal interest rates rising will only strengthen the U.S. dollar. Therefore, dairy prices may continue to drop due to less exporting.

Ultimately, low prices may be good for consumers, but American dairy farmers are already feeling the effects.

McDonald_Taylor

Taylor McDonald
Communications Assistant
IL Corn

5 THINGS ABOUT THIS PHOTO: HUGE PILES OF CORN

We’ve got some great photos in the IL Corn library – photos that speak volumes about what we do and who we are as an organization as well as who the farmers are that we serve! This week, we’ll feature a few of those photos as well as share the lessons you can glean from them!

Huge Piles of Corn!

corn pile with men

  1. When corn comes out of the field, farmers put it into semi trucks (or other sorts of trucks, but usually semis) and haul it to the elevator.  The elevator is a company that buys, sells, and stores grain.  It is called an “elevator” because the corn is elevated into huge silos for storage.
  2. But in some years like 2014, we produce more corn than we have room to store.  So the elevators put up temporary storage, like the piles you see above, just to keep grain moving out of the field.  To maintain the grain in the same quality in which it arrived, these piles will be covered with huge tarps to keep moisture from getting in.  The piles were also poured on top of huge tiles that will circulate air under the pile and prevent spoilage, damage, and mold
  3. Elevators must apply for a permit from the state to create temporary storage like this – and they can only leave this corn laying here for a short time.  So as they sell the corn, the corn in these piles will be the first to go.
  4. Corn leaves the elevator via train, truck, or river barge to go to other states (like Texas) or other countries to feed livestock.  In Illinois, just under half of our corn leaves the state to feed livestock.
  5. Many people who aren’t familiar with farming understand that the yields we get per acre are pretty static, but nothing could be further from the truth.  Every year, because of superior seed genetics and more efficient crop management practices, our potential yields increase.  Weather or pests sometimes challenge the yields, but the fact remains that our yield potential has a significant upward trend.  We are producing more corn every year than the year before!  That’s great news for a growing world population!

BEST POSTS OF 2015: HOW DOES MEXICO REINVIGORATE IL RURAL COMMUNITIES?

As we head into 2016, we’d like to look back at the best performing posts of 2015.  All week, we’ll repost the articles you liked best!  Enjoy!!

HOW DOES MEXICO REINVIGORATE IL RURAL COMMUNITIES?

mexicoMay is World Trade Month and this week in particular has been designated to celebrate agriculture’s contributions to U.S. trade.  If you’ve always wanted to know more about how farmers contribute to our economy via trade, you’ve come to the right place!

(In reality, I’m guessing you’ve never considered that farmers are a major contributor to the products leaving the U.S. and the economic boom that trade provides American citizens.  This is your week!  Learn something!)

Mexico is a hugely important buyer of corn nationally, and also has a great impact as a buyer of Illinois corn. Our river transportation system sends much of our corn directly to the Gulf of Mexico, where it makes the short trip to Mexican markets. This should remind us how important our river transportation system is, and with it, the need for repaired and upgraded locks and dams.

Illinois Corn Marketing Board partners with the U.S. Grains Council to expand export opportunities for corn, ethanol, and DDGS. USGC leverages Illinois farmer checkoff dollars with matching dollars from USDA to expand the work. Learn more about USGC’s work in Mexico at www.bit.ly/1zsm5Ml.

Here are some specifics about Mexico as a buyer of corn:

  • USDA weekly sales info as of 4/23 says Mexico is the top market for U.S. corn this marketing yr, buying 9.5 MMT (million metric tons) so far
  • Mexico imported 10.4 MMT of yellow corn during the 2014 marketing yr, making it 2nd largest market for U.S. yellow corn
  • Mexico imported more than 1.5 MMT of U.S. DDGS last year, making it the second largest market behind China
  • A critical trade deal made booming U.S. grain sales to Mexico possible – read more at www.bit.ly/1FKvRuE
  • Mexico farmers see dramatic results in DDGS feeding trials, building confidence, sales – more at www.bit.ly/1OTJKMM

What’s this mean for you as a non-farmer, an eater, and an American?

  • Vibrant and growing markets mean increased farmer income.
  • Farmers reinvest additional income into their farms.
  • This money drives the Illinois economy, provides jobs, reinvigorates rural America, and promotes investment in new technologies to make agriculture more efficient.