European Union Mission Takeaways

Posted on April 2, 2012 at 8:21 AM by Iowa Corn

In Hamburg, team listens to a presentation on
ISCC certification for
the biofuels industry in the EU.

Recently corn farmers from Iowa, Illinois and Nebraska were on a mission to the European Union. The mission, was coordinated by the U.S. Grains Council. The mission took the team to the Netherlands, Germany and Hungary. During the mission, the team visited with representatives of the beef and pork industries (arranged in part by the U.S. Meat Export Federation), biofuels, policy makers, seed corn production, grain handling, and other areas.

On the final day of the mission the team took some time to debrief. Some significant takeaways noted by the team:

A wind farm in rural Hungary.

The entire week was a serious reality check in terms of the situation in the EU. The EU represents at 500 million person market. You don't write them off. But under the current circumstances, they are likely not a market of significant growth for U.S. corn and corn products.
We cannot be arrogant about this market. It's easy to dismiss the EU as irrational, but that's dangerous. We must learn to adapt and change in some ways.
The perception among EU consumers related to GMOs and biotechnology is visceral and emotional. Science and logic have little influence on swaying their opinion. Moreover, politicians are using these issues to gain votes and, to some degree, divert attention from other issues. Even though we have science on our side, our story in the EU (and in the U.S.) also needs to carry with it an emotional appeal.
We need to keep a close eye on the regulatory developments in the EU related to animal care, sustainability, etc. since the regulatory environment in the EU tends to work its way across the pond to the U.S. "Green" is an overriding concern in the EU and we need to take heed.
There are niche markets available to American producers. For example, they are reacquiring their taste for marbled, corn-fed U.S. beef (albeit hormone-free, GMO free, etc.) And as the EU loses its livestock production (due to regulatory and economic issues), new opportunities for protein may emerge.
U.S. producers (grain and livestock) need to be more cognizant of consumer opinion and perception. We have lost our consumer focus.
Traceability, especially in the meat industry, is an expectation—and must be implemented if the U.S. is to continue building market share in the EU.
We talked to a lot of people who seemed resigned to the regulatory environment, and not many who seemed to think it would work or was particularly enforceable. That would likely not be the case in the U.S. If regulations of this nature are in place in America, they will be enforced.
We're not the only people selling corn. Global competition for corn is growing. We heard about the Ukraine all week. They will have an impact on corn markets in this region.
Something of significance will have to occur in the EU in order for the current trajectory to change—a food shortage for example. If that happens, their priorities—and their regulations—may change.
The EU political system is convoluted and cumbersome, what with 27 member nations. It takes a very long time for decisions to be made—and once they are, they are very unlikely to be undone.
Many groups have worked to collaborate with the NGOs in the EU in the development of regulations in order to be part of the conversation. But once you make a coalition with these groups, when do they stop? How far do they go? How does this increase their credibility and impact? Do initiatives such as ISCC give these organizations a single point of focus at which they can concentrate resources and effort?
Transparency is critical. Cary Sifferath with the U.S. Grains Council noted that the recent "Corn Quality Report" published by USGC marks the first time we've had hard facts to communicate and substantiate the U.S. corn supply. We still have a "hangover" from the 09/10 crop—but the report is helping convince global customers about the reliability and quality of U.S. corn.
The work of the U.S. Grains Council and the U.S. Meat Export Federation is helping keep U.S. agriculture in touch with market development, market opportunities and potential threats.

You can read more about the mission at: http://www.midwestcorngrowers.blogspot.com/

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