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VIEWS: 3 PAGES: 62

									                         Why Iowa farmers
                        need export markets




                 Microsoft photo




Original 9/12/08 Joel Severinghaus
                                        Modified 12/19/11 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.
95% of the world’s population
    lives outside the US

                  China
                  19%




   Rest of the             India
     World                 17%
     59%

                    U.S.
                    5%



                                   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     1000       1200           1400
                                Million people          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%        100%            125%           150%
                              Million people
                                           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

                0      2    4      6       8        10                12
                                               Source: CIA World Factbook
                                % Growth
Sources of US petroleum imports, 2010

                                Canada
           Rest of World
                                 21%
               23%



     Colombia
         3%
     Angola                            Mexico
       3%                               11%
      Iraq
       4%Algeria
          4%                   Saudi Arabia
           Russia                  9%
             5%
               Venezuela Nigeria
                  8%       9%


                                         Source: U.S. Energy Information Administration
                       Size of economy
    Turkey
  Indonesia
    Canada
South Korea
    Mexico
      Brazil
    Russia
      India
     Japan
     China
       U.S.
        EU

               0   2     4   6      8         10   12           14            16
                                 $ Trillion             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 2010
                         4.0%
                                                                             Nigeria
Population growth rate




                         3.0%
                                                                        India
                                                     Bangladesh     Philippines
                         2.0%        US
                                          Pakistan
                         1.0%                                                       India
                                          U.S. Mexico
                                                        Indonesia   Brazil
                         0.0%
                                       Japan                                        China
                                                     Russia
                         -1.0%

                         -2.0%
                              0.0%   2.0%      4.0%      6.0%       8.0%         10.0%           12.0%           14.0%
                                                      Economic growth rate
                                                                             Sources: CIA “World Factbook”, U.S. Census Bureau
• That’s where the consumption growth is




                                Hong Kong
               Trends in US protein consumption
         100
         90
         80
         70
         60
Pounds




         50
         40
         30
         20
         10
          0
          75
                77
                     79
                          81
                               83
                                    85
                                          87
                                               89
                                                      91
                                                           93
                                                                  95
                                                                         97
                                                                                99
                                                                                       01
                                                                                               03
                                                                                                      05
                                                                                                             07
                                                                                                                    09
         19
               19
                    19
                         19
                              19
                                   19
                                        19
                                             19
                                                  19
                                                        19
                                                               19
                                                                      19
                                                                             19
                                                                                    20
                                                                                            20
                                                                                                   20
                                                                                                          20
                                                                                                                 20
                                   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.
                Pork consumption growth
180%

160%

140%

120%

100%

80%

60%

40%

20%

 0%
   90


         92


                 94


                        96


                                98


                                       00


                                             02


                                                        04


                                                                    06


                                                                               08


                                                                                           10
  19


        19


               19


                       19


                             19


                                      20


                                            20


                                                     20


                                                                 20


                                                                            20


                                                                                        20
              Brazil    China        South Korea         Mexico              United States
                                             Source: USDA Foreign Agriculture Service PSD Online 12/19/11
              Chicken consumption growth
1400%

1200%

1000%

800%

600%

400%

200%

  0%

-200%
    90


             92


                    94


                           96


                                   98


                                          00


                                                02


                                                           04


                                                                      06


                                                                                  08


                                                                                             10
   19


         19


                  19


                          19


                                19


                                         20


                                               20


                                                        20


                                                                   20


                                                                               20


                                                                                          20
    Brazil        China    India        South Korea         Mexico              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%
-20%
    96

    97

    98

    99

    00

    01

    02

    03

    04

    05

    06

    07

    08

    09

    10

    11
  19

  19

  19

  19

  20

  20

  20

  20

  20

  20

  20

  20

  20

  20

  20

  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.



                                        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”
         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%
    90


                 92


                       94


                               96


                                           98


                                                  00


                                                        02


                                                                   04


                                                                              06


                                                                                          08


                                                                                                     10
   19


            19


                      19


                              19


                                      19


                                                20


                                                       20


                                                                20


                                                                           20


                                                                                       20


                                                                                                  20
        Brazil        China        India        South Korea         Mexico              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
                      40
Million metric tons




                      35
                      30
                      25
                      20
                      15
                      10
                      5
                      0
                       90


                                92


                                      94


                                              96


                                                          98


                                                                 00


                                                                       02


                                                                                  04


                                                                                             06


                                                                                                         08


                                                                                                                    10
                      19


                               19


                                     19


                                             19


                                                     19


                                                               20


                                                                      20


                                                                               20


                                                                                          20


                                                                                                      20


                                                                                                                 20
                           Brazil    China        India        South Korea         Mexico              United States
                                                                      Source: USDA Foreign Agriculture Service PSD Online 12/19/11
                                              Corn consumption
                      300


                      250
Million metric tons




                      200


                      150


                      100


                      50


                       0
                        90

                                 92

                                        94

                                               96

                                                       98

                                                              00

                                                                    02

                                                                               04

                                                                                           06

                                                                                                      08

                                                                                                                 10
                      19

                             19

                                       19

                                              19

                                                    19

                                                             20

                                                                   20

                                                                            20

                                                                                        20

                                                                                                   20

                                                                                                              20
                        Brazil        China    India        South Korea         Mexico              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%
      0


            2


                   4


                           6


                                  8


                                           0


                                                     2


                                                           4


                                                                  6


                                                                         8


                                                                                   0
    9


             9


                    9


                           9


                                   9


                                            0


                                                     0


                                                            0


                                                                   0


                                                                          0


                                                                                  1
 19


          19


                 19


                        19


                                19


                                         20


                                                  20


                                                         20


                                                                20


                                                                       20


                                                                               20
                    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%.
      Export share of US production, 2011
25%



20%



15%



10%



5%



0%
        Beef    Pork   Dairy             Chicken                    Turkey
                               Source: USDA ERS “Livestock, Dairy & Poultry Outlook” 12/11
   True or false?


12. Japan is our # 1
    ag export market.

             False.
             Used to be,
             before NAFTA.
      Top ten US ag export markets, 2010
           Turkey

        Indonesia
                                                       Canada & Mexico buy
       Hong Kong                                       27% of US ag exports

          Taiwan

      South Korea

European Union-27

           Japan

          Mexico

          Canada

           China

                    0   5                      10                       15                       20
                                          $ Billion
                            Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
                     US agricultural trade with Canada
            20
                                     NAFTA
            18                                                 Two-way trade up 305%
            16                                                 since NAFTA

            14
            12
$ Billion




            10
             8
             6
             4
             2
             0
                 9


                       1


                              3

                                     5


                                             7


                                                    9

                                                                1


                                                                           3


                                                                                       5

                                                                                                  7


                                                                                                              9
               8


                        9


                               9

                                      9


                                             9


                                                    9

                                                              0


                                                                          0


                                                                                     0

                                                                                                 0


                                                                                                            0
            19


                     19


                            19

                                   19


                                          19


                                                 19

                                                           20


                                                                       20


                                                                                  20

                                                                                              20


                                                                                                         20
                                                 Exports            Imports
                                                  Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations
                     US agricultural trade with Mexico
            18
                                     NAFTA
            16                                                      Two-way trade up
                                                                    375% since NAFTA
            14

            12
$ Billion




            10

             8

             6

             4

             2

             0
                 9


                       1


                              3

                                     5


                                             7


                                                    9

                                                                1


                                                                           3


                                                                                       5

                                                                                                  7


                                                                                                              9
               8


                        9


                               9

                                      9


                                             9


                                                    9

                                                              0


                                                                          0


                                                                                     0

                                                                                                 0


                                                                                                            0
            19


                     19


                            19

                                   19


                                          19


                                                 19

                                                           20


                                                                       20


                                                                                  20

                                                                                              20


                                                                                                         20
                                                 Exports            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.
                 Top 10 ag exporting states, 2010
            14


            12


            10


            8              6.5% of $109 billion total US ag exports
$ Billion




            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

            6
$ Billion




            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
    billions of dollars
    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     1.4 billion
# 7 Animal fats                  44 million
# 7 Feeds & fodders           172 million
# 9 Dairy                        59 million




                       Source: USDA Economic Research Service, “State Export Data”
Iowa’s top 10 manufactured exports, 2010
  1. Tractors                               $745 million
  2. Aircraft engines/parts                  261
  3. Herbicides                              229
  4. Refrigerators                           165
  5. Excavators                              150
  6. Front-end loaders                       147
  7. Aluminum alloy plates                   140
  8. Sprayers                                110
  9. Combustion engine parts                  90
 10. Gear boxes for vehicles                  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 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
            12


            10


            8
$ Billion




            6


            4


            2


            0
              95

              96

              97

              98

              99

              00

              01

              02

              03

              04

              05

              06

              07

              08

              09

              10
            19

            19

            19

            19

            19

            20

            20

            20

            20

            20

            20

            20

            20

            20

            20

            20
                          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
  Population vs. arable land

        share of global         share of global
         population              arable land


China                     19%                 5%


India                     17%                10%


US                        5%                 13%
Arable land

								
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