TPP IMPACTS TO U.S. CORN PRODUCTION
The Trans-Pacific Partnership (TPP) stands to do exactly what U.S. agriculture and the U.S. economy as a whole really needs – keep more production in the U.S. and sell a value-added product overseas.
Yes, it is expected that exports of corn as a raw commodity will decline after TPP is signed because experts expect Japan’s livestock industry to modernize and shrink in size. However, additional feed demand resulting from the additional world demand for meat will more than make up the difference.
In 2014, corn accounted for 13 percent of total U.S. agriculture exports to TPP countries. The U.S. supplied 81 percent of all Japan’s corn imports and 99 percent of Mexico’s corn import supply – the two largest corn export markets.
But U.S. beef production is forecast to grow by 324 million pounds as a result of TPP.Beef imports are also expected to grow by 29 million pounds, with additional sales expected from Australia and even specialty beef from Japan. U.S. pork production is forecast to grow by 794 million pounds as a result of TPP. Pork imports also are expected to grow slightly, by 0.7 million pounds, with additional sales expected from Canada.
This will lead to additional feed demand results from an expected increase in U.S. beef and pork exports. As a result of increased domestic demand, corn prices are projected to increase by $0.05 per bushel, leading to an increase in cash receipts of over $680 million.
Corn is a clear winner from TPP negotiations, as is the rest of U.S. agriculture and U.S. rural economies as a result. If you haven’t already contacted your Congressman to let him/her know that you support Congressional passage of TPP, maybe you should.