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Why Iowa farmers need export markets
Original 9/12/08 Joel Severinghaus
Microsoft photo
Modified 1/13/14 Chad Hart
Why do Iowa farmers need export markets?
• That’s where the customers are
• That’s where the economic growth is
• That’s where the consumption growth is
• We produce surpluses
• We only eat high on the hog
• Exports are crucial to Iowa farm income
• That’s where the customers are
Wal-Mart photo
In China since 1996, 390 stores
Walmarts, Sam’s Clubs, and Neighborhood Markets
True or false?
1. Two-thirds of the people on this planet are Asian.
False.
95% of the world’s population lives outside the US
Source: CIA World Factbook
True or false?
2. China, India, and Indonesia have the three largest populations.
False.
The US is # 3.
Top 10 populations
Source: CIA World Factbook
True or false?
3. Over the next 40 years, the highest population growth rate will be in India.
False.
In Africa.
Population growth 2014 to 2050
Source: U.S. Census Bureau, International Data Base
• That’s where the economic growth is
Hong Kong
True or false?
4. Nigeria’s economy is growing faster than the US economy.
True.
Economic growth rates
Source: CIA World Factbook
Sources of US petroleum imports, 2012
Source: U.S. Energy Information Administration
Size of economy
Source: CIA World Factbook
Beijing
Chinese economic growth: 1990
Dongguan, Dec. 10, 2005: McDonald’s opens first drive-thru in China; half of the 100 restaurants plan to open each year will have drive-thrus
Chinese economic growth: 2005
AP photomcchronicles.blogspot.com photo
1000 more cars added to the streets of Beijing every day
Chinese economic growth: 2008
Open 24 hours Delivery 24 hours
More than 1,800 McDonald’s in China, with 200 more on the way
Chinese economic growth: 2011
10 largest economies (GDP rank)
2020 2030 2040 2050
US US China China
China China US US
Japan India India India
Germany Japan Japan Brazil
India Germany Brazil Japan
France Brazil Germany Russia
UK France Russia Mexico
Brazil Russia France Germany
Italy UK UK Indonesia
Canada Italy Mexico France
Source: PwC, The World in 2050, January 2011
True or false?
5. There are more middle-class consumers in India than in the US.
True.
0 500 1000 1500 2000 2500 3000 3500
Central and SouthAmerica
Asia Pacific
Sub-Saharan Africa
Middle East andNorth Africa
Millions of people
2030 2009
“Middle class” population growth in developing countries 2009 to 2030
Source: OECD, , The Emerging Middle Class in Developing Countries, Homi Kharas, January 2010
India’s middle class already out-numbers total US population
12 countries over 100 million population
Sources: CIA “World Factbook”, U.S. Census Bureau
Bubble size: population in 2014
India
US
• That’s where the consumption growth is
Hong Kong
Trends in US protein consumption
Source: USDA Economic Research Service “Food Availability” data sets
True or false?
6. The highest pork consumption growth is in Mexico.
False.
Pork consumption growth
Source: USDA Foreign Agriculture Service PSD Online 1/14/14
Chicken consumption growth
Source: USDA Foreign Agriculture Service PSD Online 1/14/14
True or false?
7. Beef consumption in India has doubled in the past decade or so.
False, but it is close.
Beef consumption growth
Source: USDA Foreign Agriculture Service PSD Online 1/14/14
Religion in India
Source: CIA World Factbook
About 150 million people --third largest Muslim populationafter Indonesia and Pakistan
They eat beef in India? The Hindus don’t, but some of the Muslims do.
Sikh 1.9%Christian 2.3%
Muslim13.4%
Other 1.9%
Hindu80.5%
True or false?
8. Milk consumption in India is growing faster than in China.
False.
But it depends on the time frame.
Fluid cow milk consumption growth
Source: USDA Foreign Agriculture Service PSD Online 1/14/14
Over 1,000 Pizza Hut restaurants,
By 2014, 200 Pizza Hut “Home Service” units (doubled in 3 years)
Baskin Robbins has 90 locations in China,
Plans for 249 more locations over the next 10 years
437 Subways in China
More than 1,000 Starbucks
True or false?
9. China consumes more soybean meal than the US.
True.
Soybean meal consumption
Source: USDA Foreign Agriculture Service PSD Online 1/14/14
Corn consumption
Source: USDA Foreign Agriculture Service PSD Online 1/14/14
• We produce surpluses
Heart of Iowa Co-op, Nevada
True or false?
10. We export about a fifth of the US corn crop.
False.
But we previously did.
US corn use
Source: USDA WASDE reports
True or false?
11. We export about a tenth of US dairy production.
False.
Now about 20%.
Export share of US production, 2012
Source: USDA ERS “Livestock, Dairy & Poultry Outlook” 1/14
True or false?
12. Japan is our # 1 ag export market.
False.
Used to be, before NAFTA.
Top ten US ag export markets, 2012
Canada & Mexico buy 28% of US ag exports
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
US agricultural trade with CanadaNAFTA
Two-way trade up 376% since NAFTA
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
US agricultural trade with MexicoNAFTA
Two-way trade up 472% since NAFTA
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
Exports are crucial to Iowa farm income
Microsoft photo
True or false?
13. Iowa ranks # 3 in state ag exports.
False.
# 2.
Top 10 ag exporting states, 2012
8% of $141 billion total US ag exports
Source: USDA Economic Research Service, “State Export Data”
True or false?
14. Exports equal about 15% of Iowa farm cash receipts.
False.
More like 35%.
Iowa agricultural exports
Source: USDA Economic Research Service, “State Export Data”
True or false?
15. Iowa exports billions of dollars worth of corn and soybeans.
True.
Iowa’s state export rankings, 2012
# 1 Soybeans $3.578 billion
# 1 Pork $1.887 billion
# 1 Corn $1.710 billion
# 1 Feeds $1.038 billion
# 1 Soybean meal $713 million
# 1 Vegetable oils $543 million
# 4 Beef $312 million
# 4 Hides $157 million
# 12 Dairy $118 million
Source: USDA Economic Research Service, “State Export Data”
Iowa’s top 10 manufactured exports, 2012
1. Tractors $1.306 billion 2. Aircraft engines/parts 307 million 3. Herbicides 300 million 4. Front-end loaders 266 million 5. Aluminum alloy plates 238 million 6. Excavators 176 million 7. Bulldozers 150 million 8. Sprayers 139 million 9. Harvesting machinery 127 million10. Refrigerator-freezers 122 million
Source: http://www.census.gov/foreign-trade/statistics/state/data/ia.html
1 in 3 John Deere Waterloo Works tractors is exported
131 tractors on 49 railcars, crossing Nebraska, bound for China, 5/08
Significance of Iowa’s manufactured exports
• Exports support 7.1% of total private-sector employment, and 21.2% of total manufacturing employment
• 2,447 Iowa companies export
• 82% of Iowa exporters are small & medium-sized enterprises (less than 500 employees)
Source: USDOC ITA “Iowa: Exports, Jobs, and Foreign Investment” 12/11
Top 3 US soybean export markets
Source: US Census Bureau, Foreign Trade Statistics
So why do Iowa farmers need export markets?
• That’s where the customers are
• That’s where the economic growth is
• That’s where the consumption growth is
• We produce surpluses
• We only eat high on the hog
• Exports are crucial to Iowa farm income
Population vs. arable land
share of global share of global population arable land
China 19% 5%
India 17% 10%
US 5% 13%
Arable land
