On a hot September day, five Japanese men arrived at Rod Pierce’s central Iowa farm. They represented feed mills and livestock cooperatives, and were there to see the corn they may eventually buy.
Pierce invited them to walk among his rows of corn, climb into the cab of an 8-head combine and poke their heads into one his empty grain storage bins.
Pierce grows mostly corn on his 1,700 acres and he knows about one-fifth of the corn grown in the United States gets exported. Japan’s second only to Mexico as a customer of U.S. corn.
President Donald Trump recently announced he’d reached a tentative agreement with Japanese Prime Minister Shinzo Abe on a bilateral trade deal, though it has not yet been signed or made public. The administration is also awaiting congressional approval for the reconfigured trade deal between the U.S., Mexico and Canada. And tit-for-tat tariffs on goods traded between the U.S. and China remain in place as the countries navigate a complicated, delicate dance through their own bilateral deal.
The Japanese visitors asked why Pierce’s corn stalks look different from the ones growing directly across the road (they were planted at a different time and may have had different applications of fungicides or other chemicals). They asked how long it will take to harvest all of his crops (a few weeks, beginning very soon). They listened carefully as Pierce explained how his dryer circulates air through stored corn to bring down the moisture content and prevent damage.
Then Pierce asked his own question: “Do you guys have any problems with our corn, as far as the quality?”
Tommy Hamamoto, the Japan country director for the U.S. Grains Council, which organized this tour, translated the question and then provided Pierce with an answer from one of the buyers.
“They like corn with higher protein content, but the protein content of U.S. corn is dropping, is going down,” Hamamoto said.
Pierce listened and speculated that with higher yields in recent years, some amount of protein may have been compromised. Then he told the group that a different seed might be a good fix to get higher protein content, and thanked them for the feedback.
“We need to know that, and hopefully provide you with the higher protein-type corn,” Pierce said.
Trade deal skeptic
While many U.S. farmers and commodity groups are focusing on retaining global customers — especially as recent waivers for ethanol have spooked the domestic corn market — others are speaking out in opposition to some trade deals.
George Naylor, who farms in Greene County, Iowa, about an hour from Pierce, doesn’t think nurturing international sales is the right way forward. After 25 years of the North American Free Trade Agreement, he said his grain doesn’t fetch a higher price.
“I'm still getting very bad prices, below the cost of production,” Naylor said. What’s more, he said, Mexico’s corn farmers have largely been run out of business, and in the United States, the deal has benefitted large agribusinesses such as grain brokers and meatpackers.
In 1978, Naylor said he served on the first Iowa Corn Promotion Board, which helped coordinate the Japanese visit. But he parted ways with the organization because he felt the emphasis shifted too squarely onto free-market economics that squeezed out small family farmers.
“I recognized that what they were saying was nothing but propaganda,” he said. And the resulting situation that many farmers now find themselves in is the possibility of bankruptcy in part because China slashed its soybean imports.
That, he said, underscores the danger of having one foreign buyer gaining too much leverage in the U.S. market.
“It's actually China that's determining the outcome of our farm economy by levying these tariffs and scaring the markets,” Naylor said.
After decades as a conventional corn and soybean farmer, Naylor recently transitioned fields to organic and added oats, some hay and an apple orchard to his enterprise. He’s worried, though, about his struggling neighbors who rent land and continue to depend on the global marketplace.
A Korean delegation
A group from South Korea sat around a conference table at the Iowa Corn office in suburban Des Moines in September. T.J. Page, the organization’s market development manager, presented Iowa corn facts. The Koreans asked about the quality of Iowa corn this season, given the issues with weather.
“There's been a lot of press and there is (a) potential problem with finishing this crop out. But here in Iowa we’re going to have a fair crop,” said Jim Greif, who farms in northeast Iowa. “And I think that we (were) able to convey that we're going to have plenty of corn and they'll be plenty of good quality corn for shipments to countries like Korea.”
Greif visited South Korea on a trade mission. He knows buyers can get corn from other places and it’s in his interest to keep them coming back for more U.S. corn.
But that doesn’t mean he’ll favor exports over other options: He he can sell corn to processors for starch or sweeteners, to ethanol plants or to an exporter.
“Within 50 miles of my place, I can pick one of them markets and of course like most farmers, whichever one's paying the most (is) the one gonna get the corn,” he said.
That’s a philosophy almost any business owner will recognize.
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