Transcript Why Iowa farmers need export markets Microsoft photo Original 9/12/08 Joel Severinghaus Modified 3/26/12 Chad Hart.

Why Iowa farmers
need export markets
Microsoft photo
Original 9/12/08 Joel Severinghaus
Modified 3/26/12 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, over 190 stores
True or false?
1. Two-thirds of the people on
this planet are Asian.
True.
96% of the world’s population
lives outside the US
China
19%
India
17%
Rest of the
World
60%
U.S.
4%
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
Bangladesh
Nigeria
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 2010 to 2050
Japan
Russia
Nigeria
Bangladesh
Pakistan
Brazil
Indonesia
United States
India
China
-25%
0%
25%
50%
75%
Population growth
100%
125%
150%
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
United States
Canada
Japan
Russia
Pakistan
Mexico
Indonesia
Brazil
Nigeria
China
India
-2
0
2
4
% Growth
6
8
10
Source: CIA World Factbook
Sources of US petroleum imports, 2011
Rest of World
20%
Canada
24%
Angola
3%
Algeria
3%
Colombia
4%
Iraq
4%Russia
5%
Mexico
11%
Saudi Arabia
Nigeria
11%
7% Venezuela
8%
Source: U.S. Energy Information Administration
Size of economy
Turkey
Indonesia
Canada
South Korea
Mexico
Brazil
Russia
Japan
India
China
U.S.
EU
0
5
10
$ Trillion
15
20
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: 2011
Open 24 hours
Delivery 24 hours
More than 1,300 McDonald’s in China, with 700 more on the way
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.
“Middle class” population growth in
developing countries 2009 to 2030
Middle East and
North Africa
Sub-Saharan Africa
India’s middle class
already out-numbers
total US population
Asia Pacific
Central and South
America
0
500
1000
1500
2000
2500
3000
3500
Millions of people
2030
2009
Source: OECD, , The Emerging Middle Class in Developing Countries, Homi Kharas, January 2010
12 countries over 100 million population
5.0%
Bubble size:
population in 2011
Population growth rate
4.0%
Nigeria
3.0%
India
2.0%
Philippines
US
PakistanBangladesh
1.0%
U.S.
0.0%
Mexico
Brazil Indonesia
India
China
Japan
Russia
-1.0%
-2.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0% 12.0%
Economic growth rate
Sources: CIA “World Factbook”, U.S. Census Bureau
• That’s where the consumption growth is
Hong Kong
100
Trends in US protein consumption
90
80
60
50
40
30
20
10
Beef
Pork
Chicken
Eggs
09
20
07
20
05
20
03
20
01
20
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
77
19
75
0
19
Pounds
70
Fish
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
180%
160%
140%
120%
100%
80%
60%
40%
20%
Brazil
China
South Korea
Mexico
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
92
19
19
90
0%
United States
Source: USDA Foreign Agriculture Service PSD Online 12/19/11
Chicken consumption growth
1400%
1200%
1000%
800%
600%
400%
200%
0%
Brazil
China
India
South Korea
Mexico
20
10
20
08
20
06
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
-200%
United States
Source: USDA Foreign Agriculture Service PSD Online 12/19/11
True or false?
7. Beef consumption in India
has doubled in the past
decade or so.
False, but
it is close.
Beef consumption growth
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
-20%
Brazil
China
India
South Korea
Mexico
United States
Source: USDA Foreign Agriculture Service PSD Online 12/19/11
Religion in India
They eat beef in India?
The Hindus don’t, but
some of the Muslims do.
Other 1.9%
Hindu
80.5%
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”
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%
Brazil
China
India
South Korea
Mexico
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
92
19
19
90
-100%
United States
Source: USDA Foreign Agriculture Service PSD Online 12/19/11
As of 2011, 560 Pizza Hut restaurants,
130 Pizza Hut “Home Service” units (doubled in 3 years)
264 Subways
More than 500 Starbucks
True or false?
9. China consumes more
soybean meal than the
US.
True.
Soybean meal consumption
50
45
35
30
25
20
15
10
5
Brazil
China
India
South Korea
Mexico
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
92
19
90
0
19
Million metric tons
40
United States
Source: USDA Foreign Agriculture Service PSD Online 12/19/11
Corn consumption
300
200
150
100
50
Brazil
China
India
South Korea
Mexico
10
20
08
20
06
20
04
20
02
20
00
20
98
19
96
19
94
19
92
19
90
0
19
Million metric tons
250
United States
Source: USDA Foreign Agriculture Service PSD Online 12/19/11
• 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%
9
9
1
0
9
9
1
2
9
9
1
4
Feed
9
9
1
6
9
9
1
8
Ethanol
0
0
2
0
0
0
2
2
0
0
2
4
0
0
2
Food, Seed, & Other
6
0
0
2
8
1
0
2
0
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, 2011
20%
15%
10%
5%
0%
Beef
Pork
Dairy
Chicken
Turkey
Source: USDA ERS “Livestock, Dairy & Poultry Outlook” 3/12
True or false?
12. Japan is our # 1
ag export market.
False.
Used to be,
before NAFTA.
Top ten US ag export markets, 2011
Turkey
Indonesia
Canada & Mexico buy
27% of US ag exports
Hong Kong
Taiwan
Korea, South
European Union-27
Japan
Mexico
China
Canada
0
5
10
15
20
$ Billion
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
20
US agricultural trade with Canada
NAFTA
Two-way trade up 350%
since NAFTA
18
16
12
10
8
6
4
2
Exports
11
20
09
20
07
20
05
20
03
20
01
20
99
19
97
19
95
19
93
19
91
19
89
0
19
$ Billion
14
Imports
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
20
US agricultural trade with Mexico
NAFTA
Two-way trade up
457% since NAFTA
18
16
12
10
8
6
4
2
Exports
11
20
09
20
07
20
05
20
03
20
01
20
99
19
97
19
95
19
93
19
91
19
89
0
19
$ Billion
14
Imports
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.
14
Top 10 ag exporting states, 2010
12
$ Billion
10
6.5% of $109 billion total US ag exports
8
6
4
2
0
CA
IA
TX
IL
NE
MN
KS
IN
ND
MO
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%.
9
Iowa agricultural exports
8
7
$ Billion
6
5
4
3
2
1
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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, 2010
# 1 Soybeans
$3.3 billion
# 1 Feed grains
$1.9 billion
# 1 Meat & livestock
# 7 Animal fats
# 7 Feeds & fodders
# 9 Dairy
1.4 billion
44 million
172 million
59 million
Source: USDA Economic Research Service, “State Export Data”
Iowa’s top 10 manufactured exports, 2010
1. Tractors
2. Aircraft engines/parts
3. Herbicides
4. Refrigerators
5. Excavators
6. Front-end loaders
7. Aluminum alloy plates
8. Sprayers
9. Combustion engine parts
10. Gear boxes for vehicles
$745 million
261
229
165
150
147
140
110
90
86
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 privatesector 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
12
10
6
4
2
China
Mexico
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
20
01
20
00
20
99
19
98
19
97
19
96
19
95
0
19
$ Billion
8
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
Population vs. arable land
share of global
population
share of global
arable land
China
19%
5%
India
17%
10%
5%
13%
US
Arable land