US farmers have trouble coping with Latin America’s cheaper grain prices

09 November 20172 min reading

American farmers are trying to reduce costs to compete with rival Latin American producers who yield grain at cheaper costs. With the advantage of lower prices, Brazil and Argentina are lowering the US share in the world grain exports.

cemalettin gelenU.S. farmers are cutting costs to be able to compete against cheaper producers in Argentina and Brazil, Reuters reported. American farmers are looking for bigger yields through better seed and pesticide technology to improve their ability to compete with their rivals in South America. Four years of global oversupply have pushed down grain prices, reduced agricultural revenues and put more expensive producers under financial pressure. U.S. farmers have taken another hit this year because of rising prices of labor, fuel, and electricity.

Falls in crop prices have outpaced the cuts farmers have made in spending. Even with the cuts, U.S. farmers are still spending more per acre than their competitors in Latin America. “The lower costs have helped Latin American producers take market share from their competitors in the United States. Brazil and Argentina combined are expected to capture nearly 42 percent of the global corn export market in the 2017/2018 crop year, up from under 38 percent in 2014/2015. During the same period, the United States saw its share of global corn exports drop to around 31 percent of the market from 33.5 percent.” Reuters said.

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