Family farms become global businesses with exports

WASHINGTON — Export markets are important for the agricultural industry since family farms are global businesses.

Deb Gangwish, a board member of the National Corn Growers Association and a farmer near Shelton, Nebraska, went on a trade mission a few years ago that included a tour of Hong Kong Disneyland.

“I had an awakening when we toured the kitchens and I saw a box of beef from Nebraska,” she said.

“That’s when I realized our family farm is a global business and we never really thought about our farm that way,” said Gangwish during a virtual roundtable organized by Farmers for Free Trade.

Corn, sorghum and soybeans are grown on the Nebraska farm that also includes a cow/calf operation, a backgrounding lot and a trucking company that hauls agricultural products nationwide.

“We have 22 full-time employees and 10 part-time employees,” Gangwish said.

“For every one job involved in the export of grain and grain products, we have 3.2 jobs indirectly supported in the U.S. economy,” she said.

“More than 20% of our domestic corn crop is exported annually when we account for corn and value-added products such as ethanol and DDGs,” she said. “Trade is responsible for 33% of corn farmer’s income.”

Corn farmers have benefited greatly since the Phase 1 China trade deal, Gangwish said.

“We see that as a positive step to the overall goal of long-term market access and a fair trading relationship,” she said. “But we’re disappointed that ethanol and DDGs products currently face hefty tariffs when entering the Chinese market.”

Mexico is one of the most reliable international marketplaces for U.S. corn, Gangwish said.

“We typically have $3 to $4 billion per year in value of products that go there, so we were ecstatic to get USMCA across the line,” she said. “We really look to the administration to make sure our trading partners are accountable.”

Ethanol

The U.S. ethanol industry has grown at a rapid pace.

“In 2020, the ethanol industry was responsible for 62,000 jobs in the U.S. and indirectly 242,000 jobs across all sectors of the economy,” said Bart Pieper, vice president global strategy for Marquis Energy in Hennepin, Illinois.

“We have grown our business four times the size we were in 2008 and now employ over 400 people,” he said. “We export over 1.5 million tons of products and reach about 30 countries on six continents, so exports are becoming more and more important to how we operate our business.”

Barriers are penalizing the efficiency of the American agricultural system, Pieper said.

“Even though the U.S. exported 1.3 billion gallons of ethanol in 2020 and more than 11 million tons of DDGs, we face barriers in Asia, Europe and Mexico,” he said.

“We’ve been negotiating with China for a long time to get DDGs back into that market and it’s still heavily protected,” he said. “Brazil does the same thing for ethanol products with a 20% tariff on any product coming in, so we’re really interested in continuing to see trade barriers dropped that allow the exporting of corn based products.”

Pork

“International trade is one of the greatest successes of the U.S. hog industry with roughly one-quarter of American pork being sold abroad,” said Howard Roth Jr., fifth-generation farmer near Wauzeka, Wisconsin. “These export markets play a major role in impacting the size of our industry.”

One-third of the average value of a hog can be directly tied to exports, said Roth, who operates a 3,000 sow, farrow-to-wean farm that markets over 75,000 head of pigs annually.

“In 2020, the U.S. exported over $7.9 billion of pork and pork products to over 100 countries,” he said.

About 60,000 hog farms currently support around 500,000 jobs up and down the supply chain, Roth said.

“Over 100,000 of these jobs are directly tied to pork exports,” he said. “In states like mine or the industry’s largest state, Iowa, the average wage is over double to minimum wage and it comes with competitive benefits to attract and maintain talent.”

It is “imperative” for the administration to focus on expanding markets for U.S. agriculture around the world, Roth said.

“The biggest export opportunity for our industry lies in Southeast Asia,” he said.

“Earlier this year after years of work, the Philippines government lowered their tariffs of pork and since then U.S. pork exports have increased by over 150% in the first seven months of the year,” he said.

Dairy

Last year, the United States exported one out of every six gallons of milk, said Doug Chapin, chairman of the board for the Michigan Milk Producers.

“That was $6.5 billion worth of dairy production sold overseas that went to the bottom line of dairy producers,” Chapin said.

“Our family dairy operation has been in existence for over a century, so we’ve seen the positive impact of exports,” said the dairyman who milks 675 Holsteins, and employees 14 people, near Remus, Michigan.

“Free trade agreements have delivered the equivalent of $17 billion for dairy farmers in recent years in addition to generating benefits throughout the U.S. supply chain,” Chapin noted. “This includes workers on the farm, at the processing plant and various points along the transportation process including truck drivers, railway workers and many others.”

Chapin’s plan is to pass his dairy operation to his children.

“However, for continued growth and for future generations to continue milking we need new markets that come with new trade agreements,” he said. “Dairy farmers want the Biden trade policy strategy to include following through with agreements that had already started negotiations such as with the United Kingdom, a big dairy importing market.”

Dairy farmers, Chapin said, are looking for new trade agreements, as well as other opportunities to directly negotiate lower tariffs and open more markets in key countries around the world.

“This is critical to realize the potential of dairy markets in places like Vietnam and Indonesia,” he said.