Corn is one of the most widely grown cereal crops in terms of quantity worldwide. It is also one of the most important feed ingredients used for animal feed. However, the major decline in world corn production in the 2022/23 season posed a serious problem for feed producers in terms of supply and pricing. According to the International Grains Council (IGC), 2023/24 will be a recovery season for world corn production, which fell by 60 million tonnes to 1,165 million tonnes in the 2022/23 season, and production will reach 1,230 million tonnes again. The new season forecast of the US Department of Agriculture (USDA) Service is 1,235 million tonnes.
By Derya Yildiz
The type and quantity of cereals used in animal feed depends largely on their nutritive value and cost. Although the primary cereal type preferred in different regions varies, corn is the most intensively used cereal type in feeds produced for many different animal species, especially poultry group. Corn, which is an important source of energy for animals, is also used in the food industry such as oil, starch and flour, and by-products from these industries are also utilised as important components for the feed industry.
In the feed and livestock sector, the composition and properties of the grain as well as its price are extremely important in the selection of grain as a feed component. Raw material prices, which increase from time to time due to problems in the supply process, export restrictions and some other factors, significantly affect both livestock farmers and the feed industry. Ignoring such unpredictable factors, the most determining factor in grain prices is the amount of production and demand in the world.
LATEST PROSPECTS FOR CORN PRODUCTION
In its latest report published on 11 January, the International Grains Council (IGC) estimated that world corn production fell by 60 million tonnes from 1,225 million tonnes in 2021/22 to 1,165 million tonnes in 2022/23. This high decline in production is not expected to continue in the coming season. However, the latest estimates for the amount of increase indicate that we can only slightly exceed the production amount at 2021/22 levels. The latest forecast by the IGC is that production will be 1,130 million tonnes in the current season. This means an increase of 65 million tonnes against a decrease of 60 million tonnes.
The data in the latest report of the USDA, the Foreign Agricultural Service of the US Department of Agriculture, dated 12 January, are also in line with the IGC report, although they differ slightly in the positive direction. According to the USDA report, world corn production, which was 1,216 million tonnes in the 2021/22 season, was 1,156 million tonnes in the 2022/23 season (down 60 million tonnes). USDA’s forecast for the 2023/24 season is 1,236 million tonnes, an increase of 80 million tonnes.
According to reports, this increase in production is at a level to meet the demand for corn. According to IGC data, world corn consumption, which was 1,217 million tonnes in the 2021/22 season, decreased to 1,177 million tonnes in the 2022/23 season. This means that consumption was 12 million tonnes more than the production amount in the same period. However, projections for the 2023/24 season indicate that consumption will be lower than production (12 million tonnes) at 1.218 million tonnes. The difference between production and consumption would normally mean an increase in available stocks. However, the low production in the 2022/23 season helped stocks to melt to some extent. According to the IGC report, stocks, which hovered around 180 million tonnes in the 2022/23 season, will decline to 176 million tonnes in the 2023/24 season.
PROMINENT COUNTRIES IN CORN PRODUCTION
The Americas accounted for more than 48 per cent of world corn production in the 2022/23 season. The USA is the largest corn producer both in the region and in the world. According to USDA data, the US produced 346.7 million tonnes of corn in the 2022/23 season. The country is expected to increase its production significantly to 389.6 million tonnes this season. China follows the US in global production with 277.2 million tonnes. Production in China is expected to reach 288.8 million tonnes in the 2023/24 season. Brazil, which achieved a significant increase in corn production in the 2022/23 season, is the third largest corn producer in the world with 137 million tonnes. Production in the country is expected to decline by 10 million (127 million tonnes) in the current season. Brazil is followed by the EU with 52.4 million tonnes, Argentina with 34 million tonnes, India with 38 million tonnes and Ukraine with 27 million tonnes.
HIGHLIGHTS IN WORLD CORN TRADE
According to the IGC report, world corn trade, which was 188 million tonnes in the 2020/21 season, declined to 180 million tonnes in the next two seasons (2021/22 and 2022/23). IGC forecasts that world corn trade will continue to decline in the 2023/24 season and remain around 176 million tonnes. USDA’s January report, on the contrary to IGC, draws an increasing picture and predicts that trade will reach 198 million tonnes in the 2023/24 season, up from 180 million tonnes in the 2022/23 season.
The ranking of the leading countries in the international corn trade in the 2022/23 season is almost the same, with some changes compared to previous years. With the exception of China, the world’s largest corn producers also stand out in the list of the largest exporters. According to USDA data, Brazil, the United States, Argentina, Ukraine, Russia and the European Union accounted for more than 87 per cent of the world’s corn exports in the 2022/23 season. Brazil ranks first in world corn exports with an estimated export volume of 23.2 million tonnes. USDA predicts that Brazil will maintain its leadership in the 2023/24 season with 58 million tonnes of exports. The USA, which usually ranks first in the world corn export list, experienced a decline in exports in the 2022/23 season in parallel with the high decline in production and fell to second place with 42.8 million tonnes of exports. However, projections show that the USA will increase its exports again in the 2023/24 season and reach 54 million tonnes. Ukraine, which is still in a state of war, follows the US in the 2022/23 export ranking with 27.1 million tonnes. Ukraine’s exports are expected to decline to 21 million tonnes in the 2023/24 season. Argentina, another major corn exporter, experienced a significant decline in exports in the 2022/23 season and ranked 4th with exports down to 25.7 million tonnes.
On the import side, the European Union, Mexico, China, Japan and South Korea stand out. The EU, which ranked first in world corn imports with 23.1 million tonnes in the 2022/23 season, is expected to import 23.5 million tonnes in the 2023/24 season. The EU is followed by Mexico with 19.3 million tonnes of corn imports, China with 18.7 million tonnes, Japan with 14.9 million tonnes and South Korea with 11 million tonnes.
Resources:
• International Grains Council (IGC), Grain Market Report, 11/01/2024, https://www.igc.int/
• United States Department of Agriculture Foreign Agricultural Service (USDA), Oilseeds: World Markets and Trade Report, January 12, 2024, https://www.fas.usda.gov/
