U.S. Corn Trade Key Player In Global Food Security, Paper Finds

Paper finds disruptions to corn exports could pose food security risks for U.S. trade partners

Published on: Jul 19, 2013

A closer look at U.S. corn exports finds that trade disruptions could pose food security concerns for U.S. trading partners, largely because few countries export the amount of corn that the U.S. does, says a report published in the Journal for the Society of Risk Analysis.

The paper explains that corn is at the center of global food security because the demand for meat and fuel is growing. Corn also serves as a raw material in producing starch, oil, protein, alcohol, food sweeteners and as a dietary staple, thus disruptions in one major exporter's supplies could bring on price shocks, paper authors Drs. Felicia Wu of Michigan State University and Hasan Guclu of the University of Pittsburgh said.

Study finds disruptions to corn exports could pose food security risks for U.S. trade partners
Study finds disruptions to corn exports could pose food security risks for U.S. trade partners

They noted that the U.S. has an important role in meeting the demand because according to trade patterns from 2000-2009, the U.S. is easily the largest exporter, exporting four times as much corn as the runner-up, Argentina.

In knowing that the U.S. and Argentina are large exporters, the researchers then examined United Nations Commodity Trade data to determine if any patterns depict trading within small sub-groups, or "clusters" of importers. About three main clusters were identified around Europe, Argentina and the United States.

The patterns showed that nations which import corn primarily from only one other nation may be vulnerable to any changes in their exporters' ability to produce and ship corn, they said, pointing out that the statistics show that the vast majority of nations are exporting to or importing from only one or a small number of nations.

For example, Japan, Egypt, South Korea, and Taiwan import 90%, 40%, 85% and 80% of corn from the U.S., the article said.

The results suggest that of the top five corn-importing nations worldwide, four of them are very heavily dependent upon U.S. corn exports, and have stayed this way or are increasingly this way over the past decade.

"Hence, U.S. maize exports play a critical role in ensuring maize security for top maize importers," the researchers said.

While it's uncertain what the actual risks will be – such as a drought for example – it's also uncertain what exactly could spur a full-on disruption. In response, the authors suggest the largest corn producers should consider potential solutions for adverse effects. But, they point out, if major disruptions were to occur in the corn supply, other cereal grains may be able to fill gaps and soften the impact of a poor corn production or trade.

View the article, Global Maize Trade and Food Security: Implications from a Social Network Model, by clicking here.