Years of hard work to negotiate and pass a free trade agreement with Colombia have been nearly negated for the short term by the 2012 drought. Exports to Colombia are significantly less than expected as a result of the low yields and low quality of U.S. corn.
“Long term, free trade with Colombia represents the best opportunity for Illinois corn farmers to realize new market opportunities of the three free trade agreements passed last year (Colombia, Korea, Panama),” said Phil Thornton, Value Enhanced Market Director for IL Corn. “But with our shortages in the U.S., corn exports are down significantly and this definitely impacts the benefits we could have seen with Colombia.”
From the above tables, Canada is picking up some of the slack from a poor U.S. export market and the U.S. is currently exporting 54% less to Colombia than they were last year.
If the U.S. can look forward to a better growing year in 2013, corn farmers will realize immediate duty-free access to Colombian markets for corn through a 2.1 million metric ton tariff rate quota with 5 percent annual growth. This will reverse the nearly 2 million metric ton market the U.S. lost to competitors in previous years without the agreement.
“It will just take time and good weather for us to regain our export opportunities with Colombia and for the poorer quality corn we harvested in 2012 to work its way through the system. The Colombia Free Trade Agreement is a good opportunity for corn farmers and time will prove that,” said Thornton.
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