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CMPM Market Development Spotlight: Livestock

By Theresa Sisung, Advocacy and Outreach Director at the CMPM
Corn growers and the livestock industry have a longstanding relationship that benefits both segments of agriculture. Livestock producers need corn and corn co-products as feed, while corn growers need the market provided by livestock producers. The Corn Marketing Program of Michigan (CMPM) recognizes the importance of this mutually beneficial relationship and works to provide support for the livestock industry so it can remain strong and viable.

One key area that provides great potential for livestock producers, and corn growers, is meat exports. The CMPM recognizes that the largest growth potential for meat consumption is outside of the United States. That’s why we’re a proud member of the U.S. Meat Export Federation (USMEF). USMEF is a nonprofit trade association working to create new opportunities and develop existing international markets for U.S. beef, pork, lamb and veal.

As demand for red meat grows overseas, producers here in the U.S. have the ability to reap the benefits of increased exports. The increase in red meat exports provides a benefit to corn growers by increasing the demand for corn and corn co-products such as DDGS which are used for feed. USMEF commissioned a study to quantify the value provided to U.S. corn growers through exports of beef, pork and lamb. The independent study was conducted by World Perspectives.

World Perspectives analyzed feed rations and U.S. livestock production practices to establish total feed use and then used beef and pork export data to determine the amount of consumption attributable to red meat exports. The study found that 2015 exports of beef, pork and lamb 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 and 11.7 million tons (or 3.1 million acres) of combined corn and DDGS fed.

“Looking back at 2015, if there were no red meat exports at all and that corn was added to carryover stocks, instead of a season average annual price of $3.60 per bushel, the price would have been about $3.15 per bushel. That’s a loss of 45 cents per bushel, which would have amounted to about $6 billion to the corn industry last year,” explained Dave Juday, World Perspectives senior analyst.

The positive impact of red meat exports on the corn sector looks even stronger in the future. 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.

As we look towards the future and continue to see growth in corn production, the work that USMEF is doing to increase red meat exports will be more important than ever to grow demand for corn and corn co-products. The CMPM is honored to partner with such an outstanding organization that helps benefit our growers now and in the future.