USDA marketing assistance helps fuel sweet corn exports - Department of Agriculture

Over the past five years, exports of processed U.S. corn have grown like a weed--maybe even faster than weeds. In terms of value, exports of processed U.S. corn rose 56 percent to $148.6 million in 1991. In terms of volume, exports rose 44 percent to 189,000 metric tons. The area used to grow U.S. sweet corn destined for export also surged--growing from about 29,000 hectares in 1987 to 42,000 hectares in 1991.

Dividing the market into exports of canned and frozen corn, the value of U.S. canned corn exports increased by 54 percent from 1987 to 1991, while frozen corn exports jumped 61 percent during the same time period.

The United States and Canada dominate world canned corn production. Other important producers/exporters include Israel, France, Italy, Hungary and Australia. The major canned importers are Japan, the United Kingdom and Germany. Traditionally, those three countries buy 70 percent of the world's canned corn exports.

For world frozen corn production, again the United States and Canada dominate. Other leading frozen corn producers/exporters are Israel, Hungary and France. Japan, the United Kingdom and Australia represent the largest markets for frozen sweet corn exports. European and Pacific Rim countries also comprise a small portion of this market.

Export competition varies by region. In Asia, U.S. exporters compete against Canadian and Australian exporters in addition to local producers in Japan, Korea, Taiwan, Malaysia and Thailand. U.S. exporters face competition from Canada, Israel and both East and West European countries when marketing in Western Europe. U.S. exporters vie for market share in the Middle East with competitors from Australia, New Zealand and Western Europe.

Producers Battle Trade Barriers

Unfortunately, U.S. sweet corn exporters often face unfair trade practices when marketing overseas. In markets such as Taiwan, the European Community (EC), Canada and Eastern Europe, local producers or exporters receive subsidies, price supports or other types of direct government support. In still other countries, U.S. exporters face tariff restrictions.

For example, the EC gives Israel a preferential duty on its corn exports, but imposes a variable and fixed levy on U.S. corn products. Protectionist duty rates of 40-100 percent exist in Malaysia, Thailand and Indonesia. Other countries with high tariff rates include Japan, Taiwan and Korea.

Quotas and licensing requirements also limit U.S. corn exports. Because of these requirements, exports are constrained in Colombia, Trinidad and Nigeria.

Finally, non-tariff barriers such as regulatory standards impede U.S. corn exports. Arbitrary dating and ingredient regulations in Japan and the Middle East are difficult barriers to overcome.

Market Constraints Defined

There are several market constraints that U.S. sweet corn exporters face when selling their products abroad, including:

-- Low awareness for sweet corn as a consumable vegetable in many markets;

-- Low consumer awareness/recognition for the superior quality of U.S. produced sweet corn;

-- Low per capita consumption of sweet corn; and

-- Low awareness and recognition of specific U.S. brands of sweet corn.

To address these constraints on the market, the U.S. processed sweet corn industry is working to educate foreign consumers and encourage repeat, larger and multiple purchases.

Marketing Aided by USDA

Trade barriers and market constraints aside, the worldwide sweet corn market has grown substantially in the last decade. U.S. sweet corn exports have contributed to a large portion of that growth. The backbone of the U.S. success is the U.S. Department of Agriculture's Market Promotion Program (MPP), which has supported private firms' marketing efforts to export processed sweet corn since fiscal year 1988.

Formerly the Targeted Export Assistance Program (TEA), the MPP continues to assist U.S. corn exporters in expanding and developing markets abroad. MPP reimburses participants for 50 percent of their eligible expenses incurred while marketing their product abroad. In 1991, nine companies received MPP funding for sweet corn activities.

The U.S. sweet corn industry continues to build on the past success of the MPP to develop and expand foreign markets for its products. The industry's efforts to increase awareness and consumption of U.S. sweet corn in overseas markets also benefits U.S. growers, canners and freezers and related companies such as can manufacturers, equipment and ingredient suppliers and the transportation industry.

In other words, every dollar of output in the sweet corn industry generates about three dollars in the general U.S. economy.

  Japan Tops 1991 Export Markets
For U.S. Processed Corn
                    --In $mil.--
Japan                  57.5
Taiwan                 13.8
United Kingdom         12.6
Germany                11.6
Hong Kong               8.2
Canada                  4.9
France                  4.8
Australia               3.4
Netherlands             3.3
Sweden                  3.3
Mexico                  3.0
Switzerland             2.9
Korea                   2.6
Denmark                 2.5
Singapore               2.5

COPYRIGHT 1992 U.S. Department of Agriculture
COPYRIGHT 2004 Gale Group