USGC participates in USDA trade mission to Peru, Chile

By U.S. Grains Council | March 25, 2016

Both Chile and Peru have free trade agreements (FTAs) in place with the United States, helping make the Western Hemisphere region a bright spot for U.S. coarse grain exports in the face of higher global grain supplies, lower demand and a strong U.S. dollar. 

During a trade development mission this week led by U.S. Secretary of Agriculture Tom Vilsack, representatives from the U.S. Grains Council visited both countries to assess the potential for further growth of their imports of U.S. ag products.

The mission included participants from 34 agribusinesses and organizations and allowed participants including those from USGC to build on and develop new relationships and promote two-way trade to strengthen the future of agriculture in all three countries.

“This week, we were able to see firsthand the conditions on the ground in Peru and Chile,” said USGC Chairman Alan Tiemann, who was part of the mission. “This allowed us to build off our key partnerships we’ve formed in the past to develop trust and understanding with more of the local industry.

“The knowledge team members gained this week will also enhance the U.S. industry’s ability to quickly recognize and react to opportunities and challenges in these markets.”

During the course of the week, the mission participants met with potential customers and government officials to learn more about the market, key buyers and end-users in both countries. For example, while in Chile, USGC representatives met with one of the country's largest protein providers, using 2.2 million metric tons of feed ingredients annually, where they uncovered potential new demand for U.S. grains.

“The company indicated a strong interest in U.S. distiller’s dried grains with solubles (DDGS) and soybean meal,” Tiemann said. “However, high prices and logistical constraints have hindered their ability to source grains from the United States.”

In Peru, the mission found a market devoted to free and open trade.

“Peru wants to be seen as a regional and global leader with a trade-based economy,” Tiemann said. “Their economy is growing, increasing 8 percent since the ratification of the U.S.-Peru FTA. As the country’s middle class continues to grow, it could create greater opportunities for U.S. ag exports to Peru.”

The Peru portion of the mission included a track for ethanol, which it uses at a rate of 3,000 barrels per day to help meet a 7.8 percent blend mandate. Building off of the Council’s previous success in that market, the meetings held this week helped expand the partnerships between the U.S. ethanol industry and Peru’s government officials and ethanol industry.

“Our goal is to expand ethanol use globally,” said USGC Regional Director for the Western Hemisphere Marri Carrow, who also participated in the mission, along with USGC Chief Economist Mike Dwyer.

“We are not looking to displace Peru’s domestic ethanol production but to ensure its viability. Peru’s record of market openness through FTAs makes for a good potential partner in global ethanol promotion.”

Click here to read more about the Council’s involvement in the Western Hemisphere region.

Click here to view more photos from this mission.