Last week analysts reported on the global activity of U.S. grain marketing volume. Just imagine! Although exports rose 73 percent over last year, the export pace is quickening. What has happened is that traders “are moving grains before any possible trade negotiations start,” in January of next year with the change of the U.S. government.
It is clear that the market “is increasingly worried that demand will falter, and end up buried in tons of stock.” Let us recall that this year, the United States has produced an enormous amount of grains. Would it be possible that soon, the industry will be conservative in their purchases until seeing what happens?
As the poultry industry, and overall the feed industry, are among the major consumers of grains, one wonders what they are planning. The chickens will keep on eating. Will there be a contraction in poultry production? Or is it that now, domestic corn and soybeans production in different Latin American countries will be encouraged?
I remember that during the rise of free trade agreements, one of the arguments that circulated in the late 80s and early 90s of last century was that, if the United States was efficient in producing grains - while tariff barriers were removed - we should tap into, and dedicate ourselves, to something else. And so, we forgot nationalistic sentiments and left the once hoisted food self-sufficiency flag in the closet.
As in fashion, everything comes back in style. Now, maybe we face situations where, despite our inefficiency, lack of water and expensive fertilizers, it suits us to return to producing grains domestically. Facing trade barriers we could perhaps see, we could rely less on foreign sources. What do you think?
