In a booming global marketplace, it's important to provide a global fundamental analysis. This is first in a series looking at U.S. corn and soybean farmers' global competitors and customers, and the impact they have on markets.
First, we focus on the U.S. as the largest customer for its corn and soybean farmers.
Corn and soybean exports are more glamorous and get more trade attention than domestic usage. But just like a 350 hitter in baseball is worth more than the home-run hitter, corn and soybean farmers need to support their biggest consumers — the U.S. livestock industry.
The U.S. population has increased by 35 million in the last decade and demand for pork, beef and broilers — along with more ethanol demand — is making a huge difference in overall demand.
The USDA supply-demand reports show that of the 10-plus billion bushel U.S. corn crop, 82% will be used within the U.S., while 65% of the soybean crop will be used domestically. The American Soybean Association and the National Corn Growers Association do an excellent job of promoting U.S. exports, but the largest price factor is domestic consumption.