Soviet Union Buying U.S. Corn Again

The Soviet Union has started buying U.S. corn again after a four-month pause, the Agriculture Department reports.

Exporters sold 350,000 metric tons of corn to the Soviets for delivery this year under a long-term supply agreement between the two countries, the department said this week.

It was the first U.S. corn sale to the Soviet Union since last fall, although Moscow has been buying huge quantities of wheat at subsidized prices under the department’s Export Enhancement Program. Corn, however, is not eligible for the subsidy.

Jean Nollmeyer of the department’s Foreign Agricultural Service said it was the first substantial sale of corn to the Soviets since last Oct. 23, when U.S. exporters reported 600,000 tons. Some small quantities were sold after that, she said.

No selling prices or other information about the corn sale were disclosed. When subsidies are involved, the exporting firms, quantities and amounts of EEP payments are shown, but not when straight cash deals are involved.

Competitive Prices

Under EEP, private exporters are given surplus commodities owned by the department’s Commodity Credit Corp. so they can sell a foreign buyer wheat or other authorized commodity at competitive world prices.

A metric ton is about 2,205 pounds and is equal to 39.4 bushels of corn or 36.7 bushels of wheat or soybeans. The 350,000 tons of corn would be about 13.8 million bushels.

Corn prices recently have been averaging about $1.82 per bushel at the farm level, meaning that the sale could have a farm value of around $25 million.

The corn is part of the grain the Soviet Union is committed to buy during the fifth and final year of the agreement, which calls for the annual purchase of at least 9 million tons of U.S. grain. The pact expires Sept. 30.

According to the agreement, the annual purchases are supposed to include a minimum of 4 million tons each of wheat and corn. The Soviets have the option of buying the remaining 1 million tons as wheat, corn or soybeans, with every ton of beans counting as two tons of grain--up to a maximum of 1 million tons of grain equivalent.

With the latest purchases, the Soviets have bought a little more than 2 million tons of corn, or just half of the minimum amount specified by the agreement.

By comparison, the Soviet Union has bought more than 6.3 million tons of wheat at subsidized prices, plus 800,000 tons of soybeans and 1.3 million tons of soybean meal for delivery this year.