Economics Paper on Corn Marketing Channels in U.S.A

Corn Marketing Channels in U.S.A

Market Overview

Corn is the world’s most important grain feed. United States is the leading world producers of corn with over 96,000,000 acres of land reserved for corn production (Corn in the U.S.A., 2012). The crop accounts for more than 95 percent of the country’s agricultural total production and use. Ingredients in livestock feeds comprise of the corn produced in the states which is processed into a wide range of human food and industrial products including cereals, alcohol, and artificial sweeteners (Corn in the U.S.A., 2012). Corn grain exports represent a significant source of demand for United States agricultural products, which creates U.S.’s agricultural trade balance. Apart from popcorn and sweet corn, corn accounts for about 11 percent of United States’ agricultural exports. Consequently, all corn exports account for approximately 10.7 billion in revenue annually for the country, not including processed corn products like ethanol. Notably, the country exports one of every sixteen gallons of ethanol manufactured (Corn in the U.S.A., 2012).

Corn Varieties in the USA

Sweet Corn

It is the most widely known variety of corn in the USA, and the typical range found in grocery stores and served at barbeques and cuisines (Agriculture Network Information Center, 1995). Sweetcorn is harvested before it converts sugar into starch. Thus, kernels contain high sugar contents than starch. Sweet corn is considered more of a vegetable than a grain (Tannee, & Englis, 1940). At 86 calories per 100 grams, sweet corn kernels are high in calories compared to other varieties of corn. It is gluten-free, hence considered safe for use by individuals suffering from celiac diseases (Tannee, & Englis, 1940).

Popcorn

It is characterized by a tough outer shell enclosing small starch contents. It is typically purposed for human consumption, but relatively insignificant compared to the dent corn and sweet corn (Karlen et al., 2011). Americans consume approximately 13 billion popcorn or 42 quarts per human annually. The major popcorn producing states are Indiana, Kansas, Ohio, and Illinois. Consequently, America accounts for more than 90 percent of the popcorn consumed throughout the world (Tannee & Englis, 1940).

Dent Corn

It is identified by the dimple formed in the middle of the corn’s kernel. It accounts for 99 percent of all corn produced in the United States (Tannee & Englis, 1940). It contains a high amount of starch compared to sweet corn, thus, having a bland flavor and mealy texture. It is utilized in livestock feeds and in making natural corn syrup. It is also used in industrial products like the production of ethanol and sanitizers. A half-cup serving of dent corn contains 100 calories and 2 grams of both saturated and non-saturated fatty acids. It also has 10 milligrams of sodium and 3 grams of proteins (Tannee & Englis, 1940).

Flour Corn

It has soft kernels encompassing soft starch contents. It is easy to grind, thus, preferred for use in baked products and as a slew of foods like jiffy corn (Tannee & Englis, 1940). A serving of 100 grams of flour corn contains 361 calories, 6 percent of both saturated and unsaturated fats, 14 percent proteins and 26 percent carbohydrates.

Flint Corn

Similarly, used as dent corn, but less popular. It is named after its hard, glassy outer shell. Majority of the world flint corn is produced in Central and South America because flint corn in these areas is used as livestock feeds and source of food.

Pod Corn

It is also referred to as Indian corn in America. It is more ornamental than its cousins as mentioned above, largely due to its unique elongated kernels and varying color patterns.

Ultimately, corn is not just corn, and as a consumer, it is imperative to comprehend that corn used for a specific industrial purpose cannot level up to that used for human consumption or livestock feeds.

Functions of Firms in Dent Corn Market Channel

Brokers and Commission Agents

They obtain corn directly from the farmers and distribute the maize to retailers and processing industries at a profit.

Retailers

They obtain whole grains directly from the farmers, brokers, import channels, or grain stores and sell the grains to the consumers. The retailer sells the grains at a profit without no any value addition.

Processors

The firms obtain corn directly from the farmer or brokers. Corn is processed into starch, corn syrup, and corn oils. Byproducts such as germ obtained after extraction of corn oil are distributed as animal feeds. Processed starch is distributed to manufacturing industries where it is used to manufacture ethanol. Corn can also be processed into livestock feeds and artificial sugar supplements.

Recent Trends in Corn Market Channels

Trade Promotion Authority is being established in the USA. It will recognize Congress to direct the executive branch on priorities concerning trade policies and also provide negotiation objectives for trade agreements (Coffman & Ormrod, 2015). Renewing TPA will establish new trade agreements like the Trans-Pacific Partnership that will allow agricultural exports like corn compete in the global market (Coffman & Ormrod, 2015).

Market Channel for Dent Corn

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References

Agriculture Network Information Center (U.S.), Albert R. Mann Library. United States. United States & United States. (1995). USDA economics, statistics and market information system. Washington, DC: USDA. Retrieved from https://www.ers.usda.gov/topics/crops/corn/trade/

Coffman, D. M., & Ormrod, D. (January 01, 2015). Corn prices, corn models, and corn Rents: What can we learn from the English corn returns? Retrieved from https://link.springer.com/chapter/10.1057/9781137394026_12

Corn in the U.S.A. (2012). The Hotline, The Hotline, Sept 26, 2012. Retrieved from http://www.nebraskacorn.org/2012/09/

Karlen, Douglas L., Birell, Stuart J., & Hess, J. Richard. (2011). A five-year assessment of corn stover harvest in central Iowa, USA.(Report). Soil & Tillage Research, 115 116, 47. Retrieved from https://lib.dr.iastate.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1842&context=abe_eng_pubs

Tannee, L., & Englis, D. (1940). A study of starch from different varieties and types of corn. Journal of Food Science, 5(6), 563-581.  Retrieved from http://jtrolis.ub.ac.id/index.php/jtrolis/article/view/327