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You Are Here Sunflower Magazine > Sun Seed Exports: Where'd They Go?

Sunflower Magazine

Sun Seed Exports: Where'd They Go?
March 1997

Exports of oil-type sunflower seed — primarily to Europe and Mexico — were the lifeblood of the U.S. sunflower industry during the latter 1970s and early 1980s. Annual seed export levels well in excess of one million metric tons were commonplace during that period, with the record — 1.8 million metric tons — occurring during marketing year 1979/80. Duluth/Superior was the principal outlet for those large volumes; and with that port being frozen in during the winter, there was some serious searching for a warm-water U.S. port that could handle exports 12 months a year.

Things are different today — as they have been for several years. With the exception of confection sunflower, exports of whole seed from this country are minimal. No longer do semi trailers full of sunflower seed line up in droves at Duluth/Superior port elevators. No longer are unit trains loaded with sunflower and pointed south toward Mexico for processing.

What happened to that large export seed demand? What changes took place to dramatically alter the U.S. industry’s market orientation? The answer has three main parts.

First, by the early 1980s, the U.S. sunflower industry had developed more-than-adequate crushing facilities within the sunflower production heartland. These plants are large, efficient and competitive in the marketplace with potential seed importers.

Second, the major importer of U.S. seed — the European Community — determined that internal production subsidies for oilseeds would reduce dependence upon foreign sources. Lucrative production subsidies were put in place, and oilseed production (mainly sunflower and rapeseed) increased dramatically, to the point where there was no need to import additional sunflower.

The third reason could be found in Mexico. During the 1980s, Mexican imports were controlled solely by a government purchasing agency called Conasupo. That agency initially determined that importing sunflower seed — as opposed to oil — should and would be the standard avenue for supplying Mexico’s vegetable oil source needs.

Later, however, that system of government import monopoly was discarded, and private importers were allowed to purchase their individual needs. Despite a 10-percent duty on imported vegetable oil, some of those companies found it more efficient to import sunflower oil rather than the seed. Following the signing of the North American Free Trade Agreement (NAFTA), the tariff on oil of either U.S. or Canadian origin began declining by one percent per year. Processors of high-oil seeds began placing more emphasis on importing and refining crude oil, as opposed to importing either sunflower seed or another high-oil oilseed.

It appears unlikely that seed exports will re-emerge as the standard market mechanism for U.S. sunflower. As governments are removed from marketing decisions, and as tariffs decline, it’s obvious the most efficient import is either vegetable oil or protein meal. Without a government protective scheme, moving a lightweight seed like sunflower across many miles of land and ocean is simply not in the “economic cards.”

The importance of exports in general to the U.S. sunflower industry has not declined over the years. The export market continues to consume the majority of U.S. production. But for the most part, those exports now take the form of value-added products such as sunflower oil. Exports of such value-added products enjoy a definite transportation advantage as long as governments of our trading partners continue to lower tariffs and open markets. — Larry Kleingartner

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