Why Iowa farmers need export markets

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Why Iowa farmers need export markets
Microsoft photo
9/12/08 Joel Severinghaus
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Why do Iowa farmers need export markets?

• Thats where the customers are
• Thats where the economic growth is
• Thats where the consumption growth is
• We produce surpluses
• We only eat high on the hog
• Exports are crucial to Iowa farm income

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Thats where the customers are
Wal-Mart photo
in China since 1996, now 203 stores
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True or false?
1. Two-thirds of the people on this planet are
Asian.
True.
5
95 of the worlds population lives outside the
US
source UN World Population Prospects 2004
Revision
6
True or false?
2. China, India, and Indonesia have the three
largest populations.
False. The US is 3.
7
millions of people, July 2008 estimates
Top 10 populations, 2008
source CIA World Factbook 2008
8
True or false?
3. Over the next 40 years, the highest
population growth rate will be in India.
False. In Africa.
9
Population growth 2007 to 2050
source UN World Population Prospects The 2006
Revision, Highlights (medium variant)
10
Thats where the economic growth is
Hong Kong
11
True or false?
4. Nigerias economy is growing faster than the
US economy.
True.
12
Gross Domestic Product (GDP) real growth rate,
2007 estimates
Economic growth rates
source CIA World Factbook 2008
13
Sources of US petroleum imports, 2007
Venezuela 13
source US Census Bureau, Foreign Trade
Statistics, US International Trade in Goods
Services 12/07
14
Gross Domestic Product (GDP), 2007 estimates
Size of economy
14.380 trillion
13.840 tr
source CIA World Factbook 2008
15
Chinese economic growth Then (1990)
Beijing
16
Recently (2005)
AP photo
mcchronicles.blogspot.com photo
Dongguan, Dec. 10, 2005 McDonalds opens first
drive-thru in China half of the 100 restaurants
plan to open each year will have drive-thrus
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Now (2008)
1000 more cars added to the streets of Beijing
every day
18
Now (2008)
Open 24 hours
Delivery 24 hours
More than 700 McDonalds in China
19
10 largest economies (GDP rank)
source TranSystems 2007, from Global Insight 2005
20
True or false?
5. There are more middle-class consumers in
India than in the US.
True.
21
millions of additional households with income
greater than 20,000
Middle class population growth in developing
countries 2004 to 2020
Indias middle class already out-numbers total US
population
source USDA Foreign Agricultural Service
22
11 countries over 100 million population
Nigeria
bubble size population 2007
Pakistan
Bangladesh
India
Brazil
US
Indonesia
Mexico
population growth 2005-2010
China
Japan
Russia
GDP growth 2007
sources CIA World Factbook 2008, UN
Population Division 2006
23
Thats where the consumption growth is
Hong Kong
24
Trend in US protein consumption
beef
chicken
pork
annual per capita consumption, pounds
eggs
fish shellfish
source USDA Economic Research Service Food
Availability data sets mtpcc.xls, eggs.xls
25
True or false?
6. The highest pork consumption growth is in
Mexico.
False.
26
Pork consumption growth
China 42
domestic consumption, millions of metric tons
US 23
Brazil 53
Mexico 66
Korea 78
source USDA Foreign Agriculture Service PSD
Online 4/9/08
note 2007 data preliminary, 2008 data forecast
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Chicken consumption growth
US 42
China 41
domestic consumption, millions of metric tons
Brazil 120
Mexico 99
India 194
source USDA Foreign Agriculture Service PSD
Online 4/9/08
note 2007 data preliminary, 2008 data forecast
28
True or false?
7. Beef consumption in India has doubled in the
past decade or so.
True.
29
Beef consumption growth
US 8
domestic consumption, millions of metric tons
China 122
Argentina 26
Mexico 37
India 157
source USDA Foreign Agriculture Service PSD
Online 4/9/08
note 2007 data preliminary, 2008 data forecast
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Religion in India
They eat beef in India? The Hindus dont, but
some of the Muslims do.
about 150 million people -- third largest Muslim
population after Indonesia and Pakistan
source 2001 census, in CIA World Factbook 2007
31
True or false?
8. Milk consumption in India is growing faster
than in China.
False.
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Fluid cow milk consumption growth
India 48
US 23
domestic consumption, millions of metric tons
China 431
Brazil 48
Mexico 36
source USDA Foreign Agriculture Service PSD
Online, last accessed 9/11/08
note 2007 data preliminary, 2008 data forecast
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351 Pizza Hut restaurants, 53 Pizza Hut Home
Service units
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(No Transcript)
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73 Subways
36
more than 300 Starbucks
37
True or false?
9. China consumes more soybeans than the US.
False. But maybe next year.
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Soybean meal consumption growth
China 240
US 27
domestic consumption, millions of metric tons
Brazil 129
Mexico 105
Japan 1
India 331
source USDA Foreign Agriculture Service PSD
Online, last accessed 9/11/08
note 2007 data preliminary, 2008 data forecast
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Corn consumption growth
US 54
domestic consumption, millions of metric tons
China 48
Mexico 49
Japan flat
Canada 61
source USDA Foreign Agriculture Service PSD
Online 8/12/08
note 2007 data preliminary, 2008 data forecast
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We produce surpluses
Heart of Iowa Co-op, Nevada
41
True or false?
10. We export about a fifth of the US corn crop.
True.
42
US corn use, 2007
ethanol 20
exports 17
carry-over stocks 11
livestock feed 42
high fructose corn syrup 3
cornstarch 2
sweeteners 2
cereals 1
alcohol 1
source USDA ERS, Feed Outlook 7/15/08
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US soybean use, 2007
oil 9
carry-over 4
seed 3
oil exports 2
biodiesel 2
source USDA ERS World Agriculture Supply and
Demand Estimates 7/11/08
44
True or false?
11. We export about a tenth of US dairy
production.
False. About 15.
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Export share of US production, 2007
beef
chicken
dairy
pork
turkey
source USDA ERS Livestock, Dairy Poultry
Outlook 6/17/08
46
True or false?
12. Japan is our 1 ag export market.
False. Used to be, before NAFTA.
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billions
Top ten US ag export markets, 2007
Canada Mexico buy a third of US ag exports
source US Census Bureau, Foreign Trade
Statistics, FATUS export aggregations
48
US agricultural trade with Canada
two-way trade up 193 since NAFTA
1.1 billion ag trade deficit
imports
billions
exports
source US Census Bureau, Foreign Trade
Statistics, FATUS export aggregations
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US agricultural trade with Mexico
two-way trade up 262 since NAFTA
2.6 billion ag trade surplus
exports
billions
imports
source US Census Bureau, Foreign Trade
Statistics, FATUS export aggregations
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Exports are crucial to Iowa farm income
Microsoft photo
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True or false?
13. Iowa ranks 3 in state ag exports.
False. 2.
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Top 10 ag exporting states, 2007
11.3
6 of 82 billion total US ag exports
billions
5.2
source USDA Economic Research Service, State
Export Data 7/08
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True or false?
14. Exports equal about 15 of Iowa farm cash
receipts.
False. More like 27.
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Iowa agricultural exports
about 27 of total Iowa farm cash receipts
billions
source USDA Economic Research Service, State
Export Data7/08
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True or false?
15. Iowa exports more than 1 billion worth of
corn and soybeans.
True.
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Iowas state export rankings, 2007
1 Corn 2.0 billion 1 Soybeans 1.9 b
1 Meat livestock 1.0 b 4 Feeds
fodders 144 million 5 Animal fats
39 m 10 Hides skins 57 m 10 Dairy
39 m 18 Poultry 66 m
source USDA Economic Research Service, State
Export Data7/08
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Iowas top 10 manufactured exports, 2007
1. Tractors 842
million 2. Aluminum alloy sheets 231 3.
Front-end shovel loaders 147 4. Trenching
machines 146 5. Herbicides
126 6. Refrigerators 125
7. Rolled steel plates 113 8.
Aircraft radios 100 9. Truck gear
boxes 100 10. Washers dryers
91
source www.worldtradestatistics.com/state
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1 in 3 John Deere Waterloo Works tractors is
exported
131 tractors on 49 railcars, crossing Nebraska,
bound for China, 5/08
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Significance of Iowas manufactured exports

• 98,400 Iowa manufacturing jobs depend on exports
• those 98,400 jobs represent 7.4 of total
  private-sector employment, and 16 (1/6) of total
  manufacturing employment
• 2,248 Iowa companies export
• 81 of Iowa exporters are small medium-sized
  enterprises (less than 500 employees)
• Iowa companies export to 186 of the worlds 195
  countries

source USDOC ITA Iowa Exports, Jobs, and
Foreign Investment 7/08
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Top 3 US soybean export markets
China 4.1 b
US millions
Mexico 1.2 b
Japan 1.1 b
source US Census Bureau, Foreign Trade Statistics
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Estimated value of China exports to Iowa soybean
farmers, 2007
4.117 billion US soybean exports to China x 17
Iowa share of US soybean production 700
million Iowa soybean exports to China 4.783
billion value of Iowa soybean production 15 of
Iowa soybean production (every 7th row)
sources USDA National Agriculture Statistics
Service US Census Bureau, Foreign
Trade Statistics (HS1201)
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So why do Iowa farmers need export markets?

• Thats where the customers are
• Thats where the economic growth is
• Thats where the consumption growth is
• We produce surpluses
• We only eat high on the hog
• Exports are crucial to Iowa farm income

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millions of metric tons
Corn production trade, 2007-08
exports
production
China is shifting from corn exporter to corn
importer
imports
the US is the worlds largest corn producer and
exporter
source March estimates, USDA Grain World
Markets and Trade 3/08
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millions of metric tons
Soy production trade, 2007-08
exports
production
imports
China is the worlds largest soy importer
the US is the worlds largest soy producer
source March estimates, USDA Oilseeds World
Markets and Trade 3/08
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Estimated soymeal feed surplus/deficit for pigs
and poultry
deficit
surplus
deficit
surplus
source UN FAO Livestocks Long Shadow
Environmental Issues and Options 2006
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Population vs. arable land
share of global share of global
population arable land China 20
5 India 17 10 US 5 13