US Ag Exports at an All Time High

Last week, the USDA released some wonderful news about agricultural exports.  From fiscal years 2009 to 2012, $478 billion in US ag products were exported, the highest 4 years in history.  Even better, 2013 is expected to break this record.

In a blog post by the USDA, these record-breaking sales were highlighted with a few examples.  2012 was the first year ever for China to reach an agreement with the US to accept shipments of US pears.  In this short time since the agreement was reached, China is expected to become one of the top five importers of US pears in just 2 seasons.  

Ship carrying containers full of US exports overseas.

Also, the Foreign Agricultural Service (FAS), Agricultural Marketing Service (AMS), Food Safety and Inspection Service (FSIS), the Animal and Plant Health Inspection Service (APHIS), and the US Food and Drug Administration (FDA) are collaborating on a certification program for exporting processed eggs and egg products like omelets, frozen egg patties, crepes, hard-boiled eggs, and mayonnaise.  These new market opportunities could reach an estimated $500 million in sales for producers.  

If you are an ag entrepreneur and are interested in exploring export opportunities, it's imperative that you DO YOUR RESEARCH as you would with trying any new opportunity for your business.  Some important questions to think about:

1. Is there market demand for my product internationally?  Read about conducting market research in The Guide to Farming.
2. Would I need to alter my product at all before selling it?  For example, think about local tastes, package/portion size, and religious cultural beliefs  (like Halal or Kosher certification) that might deter future customers.
3. What laws do I need to follow in order to get my product exported?  Check with your state for more info about this.  Here is info for Pennsylvania producers.

As an ag business owner, do you currently export any of your products?  If so, to what countries?  Do you have any important observations about exporting?  If you are not currently exporting, have you ever thought about it?  Why or why not?

How will new Mexican tariffs affect U.S. ag producers?

A statement was released yesterday by the Mexican government announcing 10 new tariff items to be added to its original 99-item list released March 2009. Mexico has placed tariffs on certain U.S. ag products because it feels the U.S. isn't living up to its North American Free Trade Agreement (NAFTA) obligations.

The original 2009 list contained produce including cherry and apricots. Since the tariff was instituted, the Northwest Horticultural Council (NHC) reports that cherry and apricot producers in Idaho, Washington, and Oregon have lost about $25 million in revenue. The new list includes apples, grapefruits, and oranges. The NHC commented that, "Adding apples would be unfortunate and economically damaging. The reduction in pricing goes directly back to the grower, and it comes out of the grower’s pocket.”

Census Data shows that over $1 billion worth of produce and nuts were shipped from the U.S. to Mexico in 2009, up 45% from 2005 when the U.S. shipped approximately $748 million worth of these products.

Meat and cheese are also included in this new tariff list. Fresh cheese will be facing a 25% tariff, pork cuts will be facing a 5% tariff, and cooked pork rinds will be facing a 20% tariff. From January to June 2010, Mexico's pork imports were up 32% (totaling $261 million) as compared to January to June 2009.

The article "Mexico adds pork to tariff list" describes the affect the tariffs will have on U.S. ag producers. "Mexico is one of the biggest foreign customers for U.S. agricultural products, particularly meat, fruits and vegetables. Last year, Mexico imported U.S. pork valued at $419.6 million, second only to the $1.46 billion shipped to Japan, according to government data."




As an ag entrepreneur, do you export any of your products to other countries? If you export to Mexico, have you been affected by the new tariffs? If you export to other countries, are you afraid that these other countries will start implementing tariffs like Mexico?