Miller Magazine Issue: 148 April 2022

26 MILLER / APRIL 2022 NEWS Along with some other agricultural and non-agricultural commodities, corn has seen a sharp jump in prices coincid- ing with the beginning of Russia’s military action in Ukraine. The associated disruptions of both port activity and com- mercial shipping have essentially halted corn supplies from Ukraine. Ukraine generally accounts for about 15 percent of global corn exports. This current spike in prices has compounded last year’s run-up, which was driven by both supply and demand factors. For demand, China began importing large volumes of corn beginning in July 2020. China’s strong demand persisted through 2020/21 (Oct-Sep), ultimately resulting in 29.5 mil- lion tons of corn imports. This volume cemented China as the world’s largest corn importer in 2020/21, exceeding the sec- ond largest importer, Mexico, by just over 9 million tons. On the supply side, conditions for Brazil’s second-crop corn (sa- frinha) deteriorated leading up to the start of harvest in June 2021. Lower production reduced available supplies for export, further supporting prices last year. Looking forward, Argentina and Brazil are both forecast to have record corn production in their 2021/22 (March 2022- Feb 2023) marketing years; however, these corn supplies will not be available to the world market for another few months. With Brazil normally beginning harvest of its heavily exported second crop in June or July, a higher percentage of late-plant- ed corn in Argentina could push overall South American corn availability to later in the calendar year. The United States, as the world’s largest and also residual supplier of corn, has ample supplies and could fill the gap until South American exports are fully online. However, the current high corn price may cause some importers capable of substitution to look for an alternative. Despite also experiencing a rise in price, bar- ley from Argentina and Australia remains less expensive than corn at $330/ton and $311/ton, respectively. Corn prices reach record highs Per International Grains Council (IGC) data going back over 20 years, the corn price has reached $350/ton for the first time. Bids for all major exporters notched record highs in early March.