Transcript Iowa`s Exports
Why Iowa farmers need export markets
Microsoft photo Original 9/12/08 Joel Severinghaus Modified 1/10/11 Chad Hart
Why do Iowa farmers need export markets?
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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
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That’s where the customers are
Wal-Mart photo
In China since 1996, over 200 stores
True or false?
1. Two-thirds of the people on this planet are Asian.
True.
95% of the world’s population lives outside the US
China 19% Rest of the World 59% U.S.
5% India 17%
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
Japan Russia Nigeria Bangladesh Pakistan Brazil Indonesia United States India China 0 200 400 600 800 Million people 1000 1200 1400
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 2007 to 2050 Africa + 107% Oceania + 44% World + 38% Latin America + 34% Asia + 31% North America + 31% Europe - 9%
Source: UN “World Population Prospects: The 2006 Revision, Highlights” (medium variant)
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That’s where the economic growth is Hong Kong
True or false?
4. Nigeria’s economy is growing faster than the US economy.
True.
Russia Mexico Japan United States Canada Brazil Pakistan Indonesia Nigeria India China -10
Economic growth rates
-5 0 % Growth 5 10
Source: CIA World Factbook
Sources of US petroleum imports, 2009
Rest of World 24% Canada 21% Brazil 3% Iraq Mexico 10% Venezuela 4% Russia 5% Nigeria Saudi Arabia 7% 9% 9%
Source: U.S. Energy Information Administration
Size of economy
Nigeria Pakistan Indonesia Canada Mexico Brazil Russia India Japan China U.S.
EU 0 2 4 6 8 $ Trillion 10 12 14 16
Source: CIA World Factbook
Chinese economic growth: 1990 Beijing
Chinese economic growth: 2005
mcchronicles.blogspot.com photo AP photo
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: 2008 1000 more cars added to the streets of Beijing every day
Chinese economic growth: 2008 Open 24 hours Delivery 24 hours More than 700 McDonald’s in China
10 largest economies (GDP rank) 2020 US/Canada China Japan Germany UK India France Russia Italy Brazil 2030 US/Canada China Japan India Russia UK Germany France Brazil Italy 2040 US/Canada China India Japan Russia Brazil UK Germany France Italy 2050 China US/Canada India Japan Brazil Russia UK Germany France Italy
Source: TranSystems 2007, from Global Insight 2005
True or false?
5. There are more middle-class consumers in India than in the US.
True.
“Middle class” population growth in developing countries 2004 to 2020 China 157.5
India Russia Mexico Brazil 17.2
11.2
11.2
111.9
India’s middle class already out-numbers total US population
Thailand Indonesia Nigeria 9.3
8.6
8.4
Philippines 7.4
Turkey 7.3
millions of additional households with income greater than $20,000
Source: USDA Foreign Agricultural Service
11 countries over 100 million population 2.5% 2.0% Nigeria Pakistan bubble size: population 2007 1.5% Bangladesh Brazil India 1.0% US Mexico Indonesia China 0.5% 0.0% -0.5% -1.0% 0% 2% Japan 4% Russia 6% 8% GDP growth 2007 10% 12% 14%
Sources: CIA “World Factbook” 2008, UN Population Division 2006
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That’s where the consumption growth is Hong Kong
Trend in US protein consumption
100 90 80 70 60 50 40 30 20 10 0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Beef Pork Chicken Eggs Fish
Source: USDA Economic Research Service “Food Availability” data sets
True or false?
6. The highest pork consumption growth is in Mexico.
False.
160% 140% 120% 100% 80% 60% 40% 20% 0%
Pork consumption growth
Brazil China South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/10/11
Chicken consumption growth
1400% 1200% 1000% 800% 600% 400% 200% 0% -200% 1990 Brazil 1992 1994 China 1996 India 1998 2000 2002 2004 2006 2008 South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/10/11
True or false?
7. Beef consumption in India has doubled in the past decade or so.
True.
Beef consumption growth
200% 150% 100% 50% 0% -50% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Brazil China India South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/10/11
They eat beef in India? The Hindus don’t, but some of the Muslims do.
Religion in India Hindu 80.5% Other 1.9% Sikh 1.9% Christian 2.3% Muslim 13.4%
About 150 million people - third largest Muslim population after Indonesia and Pakistan
source: 2001 census, in CIA “World Factbook” 2007
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
700% 600% 500% 400% 300% 200% 100% 0% -100% 1990 Brazil 1992 1994 China 1996 India 1998 2000 2002 2004 2006 2008 South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/10/11
As of 2008, 351 Pizza Hut restaurants, 53 Pizza Hut “Home Service” units
73 Subways
more than 300 Starbucks
True or false?
9. China consumes more soybean meal than the US.
True.
Soybean meal consumption
15 10 5 0 40 35 30 25 20 1990 Brazil 1992 1994 China 1996 India 1998 2000 2002 2004 2006 2008 South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/10/11
Corn consumption
300 250 200 150 100 50 0 1990 Brazil 1992 1994 China 1996 India 1998 2000 2002 2004 2006 2008 South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/10/11
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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
70% 60% 50% 40% 30% 20% 10% 0% Feed Ethanol Food, Seed, & Other Exports
Source: USDA WASDE reports
True or false?
11. We export about a tenth of US dairy production.
False.
Now about 20%.
25%
Export share of US production, 2010
20% 15% 10% 5% 0% Beef Pork Dairy Chicken Turkey
Source: USDA ERS “Livestock, Dairy & Poultry Outlook” 12/10
True or false?
12. Japan is our # 1 ag export market.
False.
Used to be, before NAFTA.
Top ten US ag export markets, 2009
Turkey Indonesia Hong Kong Taiwan South Korea European Union-27 Japan Mexico China Canada
Canada & Mexico buy 40% of US ag exports
0 5 10 15 20 $ Billion
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
10 8 6 4 2 0 20 18 16 14 12
US agricultural trade with Canada NAFTA
Two-way trade up 280% since NAFTA
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Exports Imports
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
18 16 14 12 10 8 2 0 6 4
US agricultural trade with Mexico NAFTA
Two-way trade up 325% since NAFTA
1989 1991 1993 1995 1997 1999 Exports 2001 2003 Imports 2005 2007 2009
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
Microsoft photo
Exports are crucial to Iowa farm income
True or false?
13. Iowa ranks # 3 in state ag exports.
False.
# 2.
14
Top 10 ag exporting states, 2009
2 0 6 4 12 10 8
7% of $97 billion total US ag exports
CA IA IL NE TX KS MN ND IN WA
Source: USDA Economic Research Service, “State Export Data”
True or false?
14. Exports equal about 15% of Iowa farm cash receipts.
False.
More like 30%.
Iowa agricultural exports
1 0 3 2 9 8 5 4 7 6 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: USDA Economic Research Service, “State Export Data”
True or false?
15. Iowa exports more than $2 billion worth of corn and soybeans.
True.
Iowa’s state export rankings, 2009 # 1 Feed grains # 1 Soybeans # 1 Meat & livestock # 5 Animal fats # 7 Feeds & fodders # 9 Hides & skins #10 Dairy $2.0 billion 2.6 billion 1.5 billion 36 million 179 million 47 million 37 million
Source: USDA Economic Research Service, “State Export Data”
Iowa’s top 10 manufactured exports, 2007 1. Tractors 2. Aluminum alloy sheets $842 million 231 3. Front-end shovel loaders 147 4. Trenching machines 146 5. Herbicides 126 6. Refrigerators 7. Rolled steel plates 8. Aircraft radios 9. Truck gear boxes 10. Washers & dryers 125 113 100 100 91
Source: www.worldtradestatistics.com/state
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
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98,400 Iowa manufacturing jobs depend on exports
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those 98,400 jobs represent 7.4% of total private-sector employment, and 16% (1/6) of total manufacturing employment
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2,248 Iowa companies export
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81% of Iowa exporters are small & medium-sized enterprises (less than 500 employees)
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Iowa companies export to 186 of the world’s 195 countries
Source: USDOC ITA “Iowa: Exports, Jobs, and Foreign Investment” 7/08
Top 3 US soybean export markets
10 9 8 7 3 2 1 0 6 5 4 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 China Mexico Japan
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
Corn production & trade, 2007-08 Argentina Brazil China Egypt 11 EU-27 Japan 16 9 Korea 5 10 Mexico 4 Taiwan 15
exports
22
production
11 53 0.5
imports
23 47 US 145
China is shifting from corn exporter to corn importer The US is the world’s largest corn producer and exporter
62 millions of metric tons
Source: March estimates, USDA “Grain: World Markets and Trade” 3/08
332
34 Soy production & trade, 2007-08 Argentina Brazil China 15 EU-27 India 4 Japan Mexico 4 Paraguay 2 Taiwan US 12
exports
47
production
28
imports
14
China is the world’s largest soy importer
61 5 7 9 28
The US is the world’s largest soy producer
70 millions of metric tons
Source: March estimates, USDA “Oilseeds: World Markets and Trade” 3/08
Estimated soymeal feed surplus/deficit for pigs and poultry
deficit surplus deficit surplus
Source: UN FAO “Livestock’s Long Shadow: Environmental Issues and Options” 2006
Population vs. arable land China India US share of global population 19% 17% 5% share of global arable land 5% 10% 13%