World Agriculture Outlook 2014-2015 Edition by Faircount Media Group

WORLD Agriculture

OutlooK 2014-2015 edition

EXPORT EXPERTS: STATE DEPARTMENTS OF AGRICULTURE For help selling a crop or product overseas, start with the state youâ&#x20AC;&#x2122;re in.

INTERVIEW Phil Karsting, Administrator, Foreign Agricultural Service

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OutlooK USDA photo by Lance Cheung

2014-2015 edition

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WORLD Agriculture

OutlooK table of contents 2014-2015 edition

Published by Faircount Media Group 701 N. West Shore Blvd. Tampa, FL 33609 Tel: 813.639.1900 www.faircount.com

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©Copyright Faircount LLC. All rights reserved. Reproduction of editorial content in whole or in part without written permission is prohibited. Faircount LLC does not assume responsibility for the advertisements, nor any representation made therein, nor the quality or deliverability of the products themselves. Reproduction of articles and photos, in whole or in part contained herein, is prohibited without express written consent of the publisher, with the exception of reprinting for news media use. Printed in the United States of America. None of the advertising contained herein implies U.S. Department of Agriculture endorsement of any private entity. This is not a publication of the U.S. government.

Interviews Phil Karsting, Administrator, Foreign Agricultural Service............................ 4 Elizabeth L. Littlefield, OPIC President and CEO.......................................................... 28 Karen Ross, Secretary of California Department of Food and Agriculture.... 50 Ted McKinney, Director, Indiana State Department of Agriculture................. 50 Todd Staples, Texas Commissioner of Agriculture........................................ 62 Outlook: The Foreign Agricultural Service ............................. 10 By Craig Collins Getting Started.......................................................................... 14 Linking farmers and foreign markets By J.R. Wilson Export Experts: State Departments of Agriculture................. 22 For help selling a crop or product overseas, start with the state you’re in. By Craig Collins Domestic Farmers, Global Reach............................................. 34 By Craig Collins Market Outlook: Livestock and Animal Products................... 42 By Craig Collins Market Outlook: Crop Commodities....................................... 52 By J.R. Wilson Made in the U.S.A...................................................................... 64 By Craig Collins A Global Vision For Agriculture............................................... 70 The growth of the University of Missouri’s international engagement and global presence By Laura Convery U.S. Cooperator Market Development Program Participants................................................................ 74

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karsting interview

Q&A Phil Karsting, Administrator, Foreign Agricultural Service Phil Karsting was appointed administrator of the Foreign Agricultural Service (FAS) in May 2013. He served more than 22 years on Capitol Hill, most recently as chief of staff to Sen. Herb Kohl, D-Wis., then-chairman of the Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies.

revious Capitol Hill assignments include serving as senior analyst on the Democratic staff of the Senate Budget Committee, where he handled issues relating to agriculture, rural development, housing, telecommunicat ion s, e nerg y, and the environment. C o n c u r re n t w i t h h i s d u t i e s a s administrator of FAS, he serves as: vice pres ident of the Commodit y Creditor Corporation (CCC), chair of USDA’s

Interagency Coordinating Committee on International Agriculture, and as an adviser to USDA’s task force on Historically Black Colleges and Universities. He began his association with American agriculture working in his family’s farm supply business in rural Nebraska. He received a bachelor’s degree in agricultural economics from the University of Nebraska-Lincoln. He is also a graduate of the International Culinary Institute in New York.

World Agriculture Outlook: Fiscal year 2013 was a banner year for food and ag exports, reaching an impressive $140.9 billion and supporting 1 million U.S. jobs. What is the general outlook for next year? Ph i l K a r st i ng: USDA’s f ina l projections for f iscal year 2014 indicate that the value of agricultural exports will reach $152.5 billion, the highest on record. Initial projections for fiscal year 2015 forecast exports to reach $144.5 billion, a decline from this year, but still the second-highest year for U.S. agricultural exports

in history. Most of this decline is a result of falling commodity prices in light of expected record U.S. corn and soybean crops this year. There are especially strong projections for exports of horticultural products, including fruits, vegetables, and nuts, which are forecast to surpass grain and feed exports in value for the f irst time in history.

WORLD AGRICULTURE OUTLOOK

Funding for the Market Access Program and Foreign Market Development Program lapsed, and both programs were temporarily suspended last year due to lack of

a Farm Bill. How important is it to have these export programs now back in place? Our staf f strives to create new marketing opportunities for U.S. farmers and ranchers so that they can sustain and grow their businesses and, in turn, foster economic growth in our rural communities. Thanks to the 2014 Farm Bill, we are continuing to provide these important opportunities to American businesses. Since 2009, we’ve helped approximately 70 U.S. agricultural producer organizations – each representing hundreds or thousands of producers – expand commercial export markets for their goods through the Foreign Market Development and Market Access Programs. These organizations hold a wide variety of activities that help their members build markets for their products. They work with producers to help them research markets, find foreign buyers, and participate in trade missions and shows. An independent study demonstrated that U.S. agricultural exports increased by $6.1 billion as a result of the increased joint investment in foreign market development by government and industry during the 2002-09 time frame studied. Overall, U.S. agricultural exports have increased $35 for every additional market development dollar expended by government and industry. Why is international trade so important to agriculture? International trade affects the bottom line – either directly or indirectly

karsting interview

U.S. Department of Agriculture (USDA) Foreign Agricultural Service (FAS) Administrator Phil Karsting.

USDA photo by Ken Hammond

– of nearly every farmer and rancher in America. Our products are recognized worldwide for their quality and safety, and nearly 20 percent of U.S. farm income comes from exports. We expect this number to continue to grow as our world becomes more interconnected and trade becomes even more prevalent. Can you tell us a little bit about the Trans-Pacif ic Partnership (TPP) and its importance relative to U.S. agricultural exports? The Asia-Pacific region is critical to U.S. agriculture. U.S. agricultural exports to TPP countries totaled more than $61 billion and accounted for more than 40 percent of our exports in 2013. And the growth in purchasing power in that part of the world is fueling demand for high-quality U.S. agricultural exports. Yet the United States has very few preferential trade agreements compared to our competitors in the region. For example: • The EU [European Union] has or is working on several trade agreements with Asian countries. • In April, two of our TPP partners – Australia and Japan – reached an economic partnership agreement. • The 10 ASEAN [Association of Southeast Asian Nations] nations already have preferential trade agreements among themselves and with six other countries in the region. And there’s a regional partnership in the works that would further liberalize trade among those 16 nations. The United States is in danger of getting left behind. That is why we are pursuing a TPP agreement that will reduce existing tariff and non-tariff obstacles, clearing a path for even more U.S. agricultural exports to the region. How does the “Made in Rural A mer ica” i n it iat ive con nec t

rural producers to international markets? Just 1 percent of U.S. companies export; we want to change that by capitalizing on demand for quality American products. Ninety-five percent of the world’s consumers live outside the borders of the United States. We think this creates a significant opportunity for our exporters, particularly rural businesses and the food and agriculture sectors. The administration’s Made in Rural America initiative, launched by President [Barack] Obama at the 2014 Farm Bill signing, will show rural businesses and leaders how to access federal resources to help them connect with new customers

and markets abroad. Collectively, these efforts will ensure that America’s farmers and ranchers are well positioned to capitalize on emerging export markets and continue to drive economic growth in rural America. We’re connecting rural businesses and leaders with government export resources through streamlined websites, trained staff, and regional forums. Tools and counseling are now more available for rural businesses looking to connect with foreign buyers or participate in trade events and promotions, like trade shows and missions. I had the privilege of attending a Made in Rural America Forum in

WORLD AGRICULTURE OUTLOOK

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USDA photo by Lance Cheung

karsting interview

USDA FAS Administrator Phil Karsting speaks at the U.S. Agricultural Export Development Council (USAEDC) Conference, in Alexandria, Virginia, on July 10, 2013.

Portland, Oregon, last month. It was inspiring to see in person how our

resources can help rural Americans pursue new markets, increase their business, and become more competitive in the global economy. At the federal, state, and local level, we canâ&#x20AC;&#x2122;t wait to assist American businesses as they consider how to grow. Demand for organic products is a growing market, especially

in Canada and Mexico. How has the USDA streamlined trade with foreign governments to help open new markets for organic farmers and handlers in the United States? USDA has worked to make the trade of organic products a much easier process. Under this administration, the United States has established organic

WORLD AGRICULTURE OUTLOOK

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karsting interview

Phil Karsting, FAS administrator, listens as Agriculture Secretary Tom Vilsack replies to a question posed by Owen Patterson, Secretary of State for Environment, Food and Rural Affairs, United Kingdom (not pictured), during a discussion on agricultural production and trade at the USDA in Washington, D.C., Jun. 30, 2014.

the impact when a countryâ&#x20AC;&#x2122;s domestic production is affected by things like drought or flood. A focus on predictable, rules-based trade encourages countries to implement policies that promote both investment and innovation and generally allow for cheaper and more reliable food supplies. Trade fosters greater competition, so food is produced where it can be most efficiently grown. Thus, farmers can maximize their productivity and the quality and value of the food they produce, while minimizing costs to consumers. Strong, integrated agricultural markets increase the availability of safe and nutritious food, decrease local prices, and expand economic growth.

USDA photo by Bob Nichols

trade arrangements with Canada, the European Union, and Japan, and most recently, Korea. Before these agreements, growers and companies wanting to trade organic products had to obtain separate certifications to two different standards, which meant a double set of fees, inspections, and paperwork, which was a huge limit on trade. Now, if a product is certified organic by one party, it can be sold as certified organic across the border in a partner country, without going through that second certification process. FAS food aid and trade capacity building programs create new oppor t unit ies for t rade a nd economic growth by establishing a nd s t r e n g t he n i n g m a rket oriented policies and structures in developing countries. What is the significance of helping to build

agricultural capacity in developing countries? Agricultural productivity growth is strongly linked to economic growth in developing countries. Our administration is committed to reducing global poverty â&#x20AC;&#x201C; and recent studies suggest that every 1 percent increase in agricultural income per capita reduces the number of people living in extreme poverty by between 0.6 and 1.8 percent. We want to ensure food security for the entire world, but it is not sufficient to focus on food production alone. It is equally important to consider agricultural trade as a critical element in achieving food security. Simply put, trade enables countries to access food products that are more efficiently and cheaply produced elsewhere. In addition to helping to keep local food prices affordable, trade also helps to buffer

Any additional thoughts or comments? The Foreign Agricultural Service is charged with empowering U.S. farmers, ranchers, and food processors to be as competitive as possible in the global economy. As such, we have a presence in over 90 countries around the world. These offices are staffed by agricultural attachĂŠs and locally hired agricultural experts who are the eyes, ears, and voice for U.S. agriculture around the world. They handle a range of issues, from helping us determine world crop numbers to resolving trade problems. They promote American products abroad and work with other governments to broaden the market for U.S. imports. We have made great progress expanding international trade, and a large part of that is owed to the FAS staff on the ground around the world, working to elevate American businesses and trade.

WORLD AGRICULTURE OUTLOOK

FOREIGN AGRICULTURAL SERVICE outlook

OUTLOOK: THE FOREIGN AGRICULTURAL SERVICE By Craig Collins

Given the recent surge in U.S. agricultural trade – which has more than doubled since the mid-2000s, growing at an average rate of more than 8.5 percent annually – it might be tempting to think of the federal government’s emphasis on agricultural exports as a recent phenomenon. But government personnel had been stationed overseas, collecting seeds and market intelligence, long before the U.S. Department of Agriculture (USDA) was created in 1862. By the time the Foreign Agricultural Service (FAS) was established in 1930, there were more than 30 agricultural attachés stationed abroad conducting market research, negotiating access, and compiling analytical and statistical reports. FAS was made one of the federal government’s four foreign affairs agencies under the Foreign Service Act of 1980. Despite its relatively small size, FAS has a global mission and presence. Its staff includes about 850 people stationed in Washington; a global network of about 160 agricultural economists, negotiators, trade specialists, and marketing experts at 96 international offices covering more than 160 foreign countries; and about 350 locally employed staff at these overseas missions. The agency has primary responsibility for USDA’s overseas programs: preserving, developing, and expanding markets for U.S. agriculture exports; collecting, analyzing, and disseminating information about global supply and demand, market trends, and export opportunities; supporting i nter nat iona l t r ade ag reement s and negotiations; providing export services and technical assistance; and administering USDA’s export credit guarantee and food aid programs, which encourage economic growth and food security around the globe. FAS, whose motto is “Linking Agriculture to the World,” carries out these missions through four program areas:

WORLD AGRICULTURE OUTLOOK

• Market Development partners with the U.S. food and agriculture industry to help exporters develop, maintain, and expand global markets for American products. Many of FAS’s market development programs are conducted in partnership with private-sector organizations and state agriculture departments. One of the best-known is the Market Access Prog ram ( M A P), a cost-shar ing program that uses funds from the federal Commodity Credit Corporation (CCC) to help small U.S. companies build global businesses through trade shows and exhibits, point-of-sale demonstrations, market research, and technical assistance. MAP’s funding mechanisms require participants to contribute a minimum of 10 percent of the funding toward generic marketing and promotion activities, and 50 percent of the costs of promoting branded products. MAP is carried out through four nonprofit State Regional Trade Groups (SRTGs), composed of state agricultural departments in the West, South, Midwest, and Northeast regions of the United States. Other FAS market development programs include the Foreign Market

Development (FMD) Program, which focuses on the generic promotion of U.S. commodities produced industrywide, such as hardwoods, seafood, or soybeans. The Emerging Markets Program (EMP) authorizes CCC funding to carry out technical assistance activities that help promote the export of U.S. agricultural products that confront technical barriers – such as sanitary and phytosanitary (SPS) restrictions – to emerging markets. The Technical Assistance for Specialty Crops (TASC) Program offers similar assistance, but is intended to benefit an entire industry or commodity – plants and plant products including fruits and tree nuts, vegetables, culinary herbs and spices, medicinal plants, and nursery, floriculture, and horticultural crops – rather than a specific brand or company. A 2012 cost-benef it analysis of USDA’s market development programs, conducted by the economics firm Global Insight (now IHS Economics & Country Risk), revealed that from 2002 through 2009, U.S. agricultural exports increased $35 for every market development dollar spent by government and industry. • Trade Policy coordinates USDA’s role in developing international

FOREIGN AGRICULTURAL SERVICE outlook

Right: Clemence, a teacher from Ogondougou School in Mali, displays the peanuts grown in the school garden to be used as a condiment in the meal provided by a USDA food aid program. Right, bottom: U.S. Department of Agriculture (USDA) Farm and Foreign Agricultural Services (FFAS) Under Secretary Michael T. Scuse tours the seafood processing operation at Tianbao in China on May 6, 2014. Tianbao is a Chinese company that imports significant amounts of seafood, dairy, and fruit products from the United States.

trade policy and standards; works with the Office of the U.S. Trade Representative (USTR) to reduce barriers to trade such as tariffs and quotas; and supports the agricultural elements of multilateral and bilateral trade agreements. FAS holds a seat at the table, for example, in two ongoing regional trade agreements: the TransPacific Partnership (TPP), currently being negotiated by 12 Asia-Pacific nations, and the Transatlantic Trade and Investment Partnership (T-TIP), a proposed free trade agreement between the European Union and the United States. • Export Financing guarantees commercial f inancing support of U.S. exporters (which in turn reduces financial risks to lenders) and provides competitive credit terms to buyers. FAS’s export financing activity is carried out through the Export Credit Guarantee (GSM102) program, which guarantees repayment when U.S. banks extend credit to foreign banks to finance sales of U.S. agricultural products.

USDA photos

• Food Security leads USDA’s efforts to help developing countries improve agricultural systems and build trade capacity. This program area also partners with the U.S. Agency for International Development (USAID) to administer food aid programs for the benefit of people around the world. FAS administers the donation of commodities to the Food for Peace

WORLD AGRICULTURE OUTLOOK

meetings were followed by a series of meetings with importers in Guangzhou. Last summer, a similar trade mission explored the growing prospects for trade in Turkey, where U.S. agricultural imports have tripled over the last decade. Turkey’s rapidly evolving economy is driven largely by a growing middle class, and the nation has emerged as a key market for U.S. exports. The trade mission involved representatives from six state agriculture departments and 20 American producers of a variety of agricultural products, including fruits and nuts, hardwoods, dry beans, and agricultural machinery. Turkey is the second-largest participant in FAS’s export financing program, which in 2012 supported the sale of about $700 million in agricultural commodities to the nation.

(Public Law 480) Program, the main avenue for U.S. food assistance, run by USAID. Other food aid programs administered by FAS include the McGovern-Dole International Food for Education and Child Nutrition Program, authorized in the 2002 Farm Bill to provide for the donation of U.S. agricultural commodities and financial and technical assistance for school feeding and maternal, infant, and child nutrition programs in low-income countries. In 2013, the McGovern-Dole Program provided benefits to about 28 million children in 37 countries. Trade Missions

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The FAS Budget

Top: Agriculture Secretary Tom Vilsack speaks about the Agricultural Act of 2014 at the Commodity Classic general session in San Antonio, Texas, Feb. 28, 2014. Above: FFAS Under Secretary Michael T. Scuse attends a trade discussion in China on May 5, 2014. Scuse led an agricultural trade mission to China to further National Export Initiative goals there. The mission is part of President Barack Obama’s Made in Rural America export and investment initiative, designed to help rural businesses and leaders take advantage of new investment opportunities and access new customers and markets abroad.

products such as Oregon berries, Wisconsin ginseng, and Washington cherries. The trade mission was followed up in July by a visit from Deputy Secretary of Agriculture Krysta Harden, who led the USDA delegation to the U.S.-China Strategic and Economic Dialogue in Beijing. The deputy secretary’s high-level

To those unaccustomed to the federal budgeting process, a look at the USDA’s budget proposal – and especially to the FAS portion of the budget – can be confusing. The key is to understand the difference between “budget authority” – the amount authorized for the agency and then appropriated by Congress – and the “program level,” or the amount required to carry out all the agency’s discretionary (budget items whose amounts are open to negotiation) and mandatory (i.e., those required by laws such as the Farm Bill) programs. FA S’s a n nu a l d i s c r e t io n a r y appropriation goes primarily to salaries and expenses for its employees and program operations. In 2014, FAS’s budget of $178 million supported a program level of about $7.8 billion. This is possible because many programs, including the market development programs, are paid for through the “revolving fund” of the CCC: The corporation is authorized to incur obligations, and then borrow funds from the U.S. Treasury to liquidate those obligations. The annual program level of $5.5 billion in export credit guarantees, for example, ref lects the level of sales expected to be registered under the program, and not a budget appropriation to be spent by FAS.

USDA photo

Trade missions sponsored by FAS pave the way for U.S. exporters to penetrate foreign markets – giving them the chance to meet potential customers, gather market intelligence, and make sales. An area of recent focus has been China, which has emerged over the past decade as a top market for U.S. agricultural exports. According to USDA’s Economic Research Service (ERS), China’s imports of U.S. agricultural products increased more than fivefold from 2003 to 2013, from $5 billion to $26 billion annually. China now accounts for nearly 20 percent of all foreign sales of U.S. agricultural products. Ch i n a’s i mpor t a nce to U. S . agriculture was emphasized in May 2014, when an FAS trade mission to northeastern China – the nation’s agricultural powerhouse, where demand for imports has soared in recent years – was led by Under Secretary for Farm and Foreign Agricultural Services Michael T. Scuse. The mission, part of the Made in Rural America export and investment initiative introduced by the White House in early 2014, involved representatives from 28 agribusinesses and eight state departments of agriculture. The delegation traveled in the northeastern provinces of Liaoning and Changchun to learn about market conditions and business opportunities – not only for the commodities in high demand in northeastern China, such as red meat, dairy, and soybeans, but also for specialty

USDA photo by Melissa Blair

FOREIGN AGRICULTURAL SERVICE outlook

American ginseng in late fall with red berries, grown under wooden shade in Monk Ginseng Garden in Wisconsin. A delegation of representatives from agribusiness and state departments of agriculture traveled to China in May 2014 on an FAS trade mission to learn about market conditions and trade opportunities for commodities in high demand as well as specialty crops like Wisconsin ginseng.

The mandatory spending levels for FAS marketing development programs are authorized in the Farm Bill, which is typically – but not always – adjusted and redrafted every five years. The current Farm Bill – the Agricultural Act of 2014, passed in January – authorizes the following expenditures annually through 2018: • $200 million for MAP • $34.5 million for the FMD program • $10 million for EMP • $9 million for the TASC program FAS’s 2015 budget request seeks $183 million for salaries and expenses, a $5 million increase over 2014; for the McGovern-Dole Program, the agency seeks $185 million in funding, the same as last year.

Dr ginseng via Wikimedia Commons

USDA’s Evolving Role in Trade

The increasing globalization of agricultural markets, along with the recent surge in U.S. agricultural exports, has led to a re-evaluation, among many in the agricultural community, of the USDA’s role in international trade. The trade organizational structure at USDA has remained virtually unchanged since a 1978 departmental overhaul. At the time, U.S. agricultural exports totaled $29 billion annually. In 2013, the nation exported more than $140 billion in food and agricultural products. The challenges faced by U.S. agriculture in a fiercely competitive global market are more numerous and complex today; it used to be that the primary obstacle facing an exporter was a tariff, but the list of trade barriers has expanded to include SPS restrictions, standards, countervailing duties, licenses, and

quotas. The complexity of these issues often requires multiple agencies – often agencies outside of USDA – to reach resolution. USDA’s organizational structure ref lects seven mission areas, each of them led by an undersecretary. The Foreign Agriculture Service is one of three agencies – the others are the Farm Service Agency and the Risk Management Agency – under the authority of the under secretary for farm and foreign agriculture services. Over the past decade or so, many U.S. interest groups began to argue for an organizational structure that better reflects the growing importance of agricultural trade to the nation’s economy. In 2012, a group of 25 food- and agriculture-related trade associations sent an open letter to Reps. Frank Lucas, R.-Okla., and Collin Peterson, D.-Minn., the chairman and ranking member, respectively, of the House Agriculture Committee. The letter urged Congress, as it began to negotiate the terms of a new Farm Bill, to reorganize the USDA, creating an undersecretary for trade and foreign agricultural affairs. Separating trade into a distinct USDA mission area, the petitioners said, would “provide a singular focus on trade and foster more effective coordination of transparent, rules-based trade policies in other USDA agencies.” A new undersecretary recruited from the ranks of experienced policymakers and negotiators, they argued, would

bring unified high-level representation to key trade negotiations along with other executive branch officials. Congress agreed with these assertions: The 2014 Farm Bill requires the secretary of agriculture, within 180 days of the law’s Feb. 7, 2014, enactment, to propose a plan for USDA reorganization that includes the new undersecretary for trade – and then to implement that plan within a year of its submission. As the late summer deadline loomed, however, Secretary of Agriculture Tom Vilsack made clear that such a reorganization was a complex issue, for which he was unable to provide a clear time line for completion. USDA’s agricultural trade functions are not carried out solely by FAS, after all; they involve several other agencies – the Agricultural Marketing Service and the Animal and Plant Health Inspection Service, for example, which are currently under the authority of the undersecretary for marketing and regulatory programs, and the Food Safety and Inspection Service, overseen by the undersecretary of food safety. As the plan for reorganization becomes more focused in the coming months, any changes in relationships between these jurisdictions will have to be negotiated and monitored. It’s not yet clear what the new USDA will look like, but under the terms of the new Farm Bill, it will be structured to place more emphasis on foreign agricultural trade than ever before.

WORLD AGRICULTURE OUTLOOK

getting started

Getting Started Linking farmers and foreign markets By J.R. Wilson

America became known as the “world’s food basket” during the 20th century; in the 21st, it has remained a major exporter of food crops, plus a growing market for nonfood exports, such as those used in alternative fuels. The ongoing drought, which has affected crop yields from California produce to Kansas wheat, has reduced the volume of crops available for export, even as demand – in some cases also affected by local droughts and other crop-limiting events around the world – has continued to increase. In May, the FY 14 forecast for agriculture exports was increased from the February estimate by nearly $7 billion, to a record $149.5 billion. Grain and feed export predictions were boosted to $35.8 billion, resulting from higher prices for wheat and greater volumes and prices for corn and feeds and fodders. The forecast for corn went up to $10.7 billion due to strong foreign demand and diminished competition, especially from Argentina. Oilseeds and product exports were forecast to hit a record $33.8 billion, driven by larger volume and higher prices for soybean and soybean meal exports. Soybean exports were predicted to reach $23.5 billion, based largely on record exports to China. Although the May forecast for FY 14 for horticultural product exports was down from February by $400 million, it remained a record high at $34.1 billion. Overall U.S. agricultural imports for FY 14 also were forecast to hit a record high of $110.5 billion – up 6.4 percent from FY 13 – but still would leave an expected FY 14 agricultural trade surplus of $39 billion, the second highest in U.S. history. This makes the increasing demands for U.S. agricultural products from growing middle classes worldwide an opportunity the U.S. Department

WORLD AGRICULTURE OUTLOOK

of Agriculture (USDA) and the Foreign Agricultural Service (FAS) are working to exploit by bringing domestic producers and trade associations together with their foreign counterparts and buyers. “Demand for U.S. agricultural products is rising rapidly due to growing incomes in emerging markets, which increase demand for more diverse and high-value products [HVPs], which is when those countries start looking for higher protein products, greater variety, and other high nutrition items,” according to Christian Foster, deputy administrator of trade programs at USDA’s FAS. “For example, one of our big partners is the Almond Board of California, which represents the majority of U.S. almond growers. That commodity has boomed as emerging markets have been demanding HVPs they didn’t have before. There is hardly a country remaining in the world that is not looking at the U.S. for products – even those who were not only a few years ago, such as Cambodia and Vietnam.” The continuing growth in U.S. exports is not only in base foods, seed, and oil grains, but also Western wines and distilled spirits and processed foods. As a result, domestic producers who have never been in the export market are now looking to fill those demands by connecting with new foreign customers – just as foreign food distributors, processors, hotel, restaurant, and grocery chains, etc., are looking for U.S. contacts. “FAS has an office in almost every nation, which may be led by a U.S. agricultural attaché or a foreign national

we employ at the embassy, where anyone can go to get information on U.S. regulations, issues on finance, shipping, food safety, etc. The foreign importers also will need to know about their own countries’ regulations, which includes labeling, translations, food safety issues, trade restrictions, etc.,” he added. “In addition, the U.S. government, to help promote exports and connections with foreign importers, offers all kinds of programs and financial incentives. USDA works w it h 70 d if ferent U.S. agriculture trade associations, representing just about every product in America. We also work with trade groups representing just about anyone in America wanting to export agriculture. And I would expect our own industry, from oranges to sheep, to be present in all these emerging markets where exports can be made. We help them get to those nations, understand their rules of trade, and how to market to them.” FAS also has direct links with the departments of agriculture in all 50 states, working with them through regional trade groups to help identify and analyze foreign food markets and how to get into them. USDA also leads a number of trade missions every year and helps the 70 trade associations conduct their own trade shows overseas and in the United States, where importers can look at both American marketing chains and individual producers. The ultimate goal is to link U.S. agricultural sellers with foreign buyers, especially those on both ends who are new to the process or want to expand their positions in the global market.

USDA photo by Bill Tarpenning

getting started

USDA photo

Above: A bulk carrier cargo ship loads rice dockside at the Bunge Grain Facility in Destrehan, Louisiana. The bulk commodities category of U.S. exports has seen growth since 2000. Right: Jim Lane, editor and publisher of Biofuels Digest, takes notes at a press conference held by Agriculture Secretary Tom Vilsack after his speech at the Advanced Biofuels Leadership Conference in Washington, D.C., on April 3, 2012. Expected increase in global use of biofuels will add to world demand for agricultural products, including those of the United States.

â&#x20AC;&#x153;There are thousands of food trade shows each year around the world; 20 to 30 of the biggest and best are supported by USDA. And our partners in this effort attend those and, for those held in the U.S., make sure they bring foreign buyers to those shows. The Market Access Program is authorized in the Farm Bill for up to $200 million per year. The trade associations compete each year for a share

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Photo courtesy of the U.S. Highbush Blueberry Council

USDA photo

getting started

of that money. And if they can match what they get, they can establish a viable export program, which they generally could not afford on their own,” Foster said. “The world’s largest trade show in the Middle East takes place in Dubai – Gulf Food – every year. In the United States, big shows include the American Food Fair in Chicago every May, mainly done by the National Restaurant Association, where a lot of foreign hotels, food service companies, and other importers come in; the annual America’s Food & Beverage Show in Florida, which is an excellent event for U.S. exporters to meet importers from all over Latin America; the U.S. Food Export showcase in Chicago, which a significant number of foreign buyers attend, some on their own, some supported by USDA; and the Natural Products Expo East, in Baltimore, which brings hundreds of new buyers to the U.S., and also has a West Coast event each year. “I consider that a key effort, which we do because most of our competitors are giving their exporters even more money to compete in the world market. Our Development Off ice funds the Cochran Development Program, which brings foreign importers, trade officials, even media, to the U.S. for a two-week tour, to meet exporters and sellers and learn about American agriculture, production sustainability, and make important contacts for future use. There also is the Doing Business in Africa

Left: U.S. Highbush Blueberry Council member Deborah Payne, right, at the GulfFood 2014 trade show in Dubai, United Arab Emirates. The U.S. Department of Agriculture’s Foreign Agricultural Service works to connect U.S. agricultural sellers with foreign buyers. Right: Blueberries under cultivation. Growing incomes in emerging markets are creating greater demand for U.S. high-value products, such as fruits, nuts, and produce.

Initiative, which has helped USDA make connections between U.S. sellers and African buyers. Many African importers will be attending the show in Miami.” In February 2014, USDA released its “Agricultural Projections to 2023”, based on those growth expectations and other major assumptions: 1. Steady global economic growth is assumed in the projections. Developing countries grow faster than developed countries and, thus, account for an increasing share of the world economy. 2. Increases in world population continue to slow. Population growth in most developing countries remains above that in the rest of the world. 3. Population gains in developing countries – along with higher incomes, increased urbanization, and expansion of the middle class – are particularly important for growth in global food demand.

4. Continued global expansion of biofuels further adds to world demand for agricultural products. “U.S. agricultural exports have been larger than U.S. agricultural imports since 1960, generating a surplus in U.S. agricultural trade. This surplus helps counter the persistent deficit in non-agricultural U.S. merchandise trade,” the report stated. “Since 2000, U.S. exports have expanded across bulk and HVP categories, with particularly strong growth among bulk commodities and processed high-value products. “U.S. agricultural exports to upper middle-income countries, like China and Mexico, surpassed those to high-income countries in 2011. Middle-income countries now account for the largest share of U.S. agricultural exports of both bulk products and semi-processed HVPs (e.g., wheat, soybeans and soybean meal). In the other HVP categories – raw products and processed products – highincome countries remain the largest U.S. markets, followed by the upper middleincome countries.” Until World War II, partially due to the devastating drought of the 1930s, the United States was a net agricultural importer; it became a net exporter from 1942-1949, then returned to running some of the nation’s largest trade deficits through most of the 1950s. That reversed again in 1960, with an agricultural trade surplus of $1 billion, a figure that rose

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getting started

and products worldwide. www.fas.usda. gov/programs/market-access-program-map • Emerging Markets Program (EMP). Provides funding for technical assistance act iv it ies to promote e x p or t s o f U. S . a g r i c u lt u r a l commodities to emerging markets worldwide. www.fas.usda.gov/programs/ emerging-markets-program-emp • Foreign Market Development Program (FMD). Provides cooperator organizations with cost-share funding for activities that build international demand for U.S. agricultural commodities. w w w.fa s .u sd a .gov/p rog ra m s/ foreign-market-development-program-fmd

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Wheat remains a top U.S. agricultural export.

as Canada, Mexico, the rest of the Americas, and Asia have risen. Total U.S. agricultural imports for FY 14 were forecast at a record $110.5 billion, up 6.4 percent from FY 13, but the growth in exports was still expected to create an FY 14 agricultural trade surplus of $39 billion, the second highest in U.S. history. But while China, Canada, Mexico, the European Union and other major nations in Latin America and Asia remain the dollar and volume leaders for U.S. exports, the surplus growth also is heavily dependent on higher demands from smaller, emerging economies, making the value of the American “food basket” a two-way street, from more producers entering the export market to improved nutrition and variety for individual consumers and expanded business and greater product inventory for foreign food sellers. To help develop bot h, FA S employs a number of programs, some independently, some in cooperation with other agencies. These include: • Market Access Program (MAP). Helps finance activities to market and promote U.S. agricultural commodities

• Technica l Assista nce for Specialty Crops (TASC). Fu nd s project s t h at a dd res s s a n i t a r y, p h y t o s a n i t a r y, a n d technical barriers that prohibit or threaten the export of U.S. specialty crops. www.fa s.usda .gov/prog ram s/ technical-assistance-specialty-crops-tasc • Expor t Credit Gua rantee Program. Prov ides cred it g uarantees to encourage f inancing of commercial exports of U.S. agricultural products, while providing competitive credit terms to buyers. By reducing financial risk to lenders, credit guarantees encourage exports to buyers in countries – mainly developing countries – that have sufficient financial strength to have foreign exchange available for scheduled payments. www.fas.usda.gov/programs/ export-credit-guarantee-program-gsm-102 “Our Export Credit Guarantee Program offers up to $5.5 billion every year to facilitate exporting to emerging markets. These are not loans but credit guarantees, so if the foreign buyer does not pay for what they get, the government will reimburse the U.S. seller by up to 90 percent. That makes the U.S., as a supplier, more attractive,” Foster explained.

USDA photo

significantly from 1973 ($9.261 billion) through 2013 ($39.877 billion). There were significant drops in export values in 2005 ($3.891 billion) and 2006 ($5.625 billion), before nearly quadrupling in 2007 ($18 billion), then becoming relatively steady at more than $30 billion each year since. Even in years of overall decline in trade, HVPs continued to exceed bulk exports. Grains and feeds have remained at the top of U.S. exports, followed by oilseeds and related products. The major increases seen since 1990 ($16.576 billion) have been attributed largely to a growth in HVP exports to Canada, Mexico, Central and South America, and Asian markets. Canada became the leading destination for U.S. agricultural exports in 2002 and Mexico moved into second in 2005 – both bumping former leader Japan down one position – largely due to increased trade among the three members of the North American Free Trade Agreement (NAFTA). While both are expected to remain at the top of the U.S. export list, China moved into the No.1 slot in 2010, slipping slightly behind Canada in 2011, then regained the lead in 2012 ($25.855 billion). Overall, there has been little variation in the top 10 agricultural export destinations since 1990, but Europe, which was the largest market in prior decades, has declined in importance

USDA photo by Bob Nichols

getting started

“We also offer what we call market development programs – market access, foreign market development, technical assistance to specialty crops, emerging markets, and quality samples. All our export programs total about $250 million a year in taxpayer dollars – and all the parties who get these awards generally match what we give them. So U.S. trade associations may get $250 million a year from the government and match that with their own resources to help set up offices in foreign countries, set up trade shows, work with regulators and ports, etc.” A foreign government official who doesn’t know whom to consult can meet with the FAS attaché at the local U.S. embassy to find out how to join exporting companies at trade shows. They also can always contact FAS in Washington, D.C., typically through their own embassy, to find sellers of products that country wants to import. “If looking to help companies import agricultural products, he should look at where to obtain certain products and commodities for food processors, hotels, and restaurants, etc., in his country and help locate foreign sellers, how to reach them, and the most efficient and costeffective way to reach a trade deal,” he continued. “They would want buyers in their nation to visit the U.S. to look at food safety issues, packaging, quality, quantity, and their internal food and trade regulations. A retail food chain in another country will have its own buyers who know the export management companies and foreign forwarders in the U.S., as well as talking to our embassy attachés to work directly with the trade associations. “He also will want to make sure the companies in his country are present at all kinds of trade shows to look at what is available from all the countries exhibiting. That also applies to those geared to a very specific commodity, such as the European Sea Food Expo in Belgium; if the goal is organics, you would want to make sure your country sends buyers to the annual East and West Coast U.S. Natural Products shows. If you want wine, the Wine Institute of California can put you in touch with just about any winery in California.”

USDA Agricultural Marketing Service Administrator Anne Alonzo announced an important trade agreement with Japan with Satoshi Kunii, director of Labeling and Standards Division, Food Safety and Consumer Affairs Bureau, Ministry of Agriculture, Forestry and Fisheries; and Islam Siddiqui, Ph.D., ambassador, U.S. Trade Representatives Office, then-chief agricultural negotiator, at the Natural Products Expo East conference in Baltimore, Maryland, on Sept. 26, 2013.

For FY 15, USDA is predicting U.S. agricultural exports of $145 billion, with China expected to keep the U.S. surplus high. “Almost every trade association we deal with has a program in China, which is not the case elsewhere. FAS has more offices there than any other nation and have been growing the number of attachés we have throughout China,” Foster said. “China is trying to improve its food and agriculture sector and food production – and we’re helping them do that through some exports. “ But Ch i na ha s a bi l l ion-plus people and continues to grow; on

the food side, the U.S. couldn’t be in a better position because the stillgrow ing midd le class wants more HVPs, which would have been luxury products a few years ago. We have competitors in those sales, but it is our key market today – from fruits and vegetables to meats and feed grains. A nd even though they are growing their internal markets, they don’t have the capability to feed all the people they have.” FY 14 is the first time HVP exports – especially fruits, nuts, and produce – will be greater than bulk commodities. “In the past, we did a lot of retail promotions, but more recently it has been about cooking and processing techniques and how to deal with different regulations,” Foster concluded. “The process for both U.S. exporters and foreign importers is largely the same – finding the buyer/seller and dealing with trade barriers and other regulations at both ends. “In terms of foreign preferences for U.S. products, when you look at the quality of American products, reliability and consistency of supply, food safety standards, broad variety in HVPs, U.S. products stand out. We may not always be the cheapest, but are superior in all other ways.”

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EXPORT EXPERTS

EXPORT EXPERTS: STATE DEPARTMENTS OF AGRICULTURE For help selling a crop or product overseas, start with the state you’re in. By Craig Collins

The trouble with millet is this: Though it’s one of the world’s oldest agricultural crops, not that many people in the Western Hemisphere know what it is. It’s often confused with sorghum. In the United States and Europe, its small round white grains are used mostly in bird seed – which is a bigger market than most outsiders realize – but it’s also an important grain used in brewing beer or distilling spirits, and as a gluten-free grain, it’s becoming a go-to ingredient in many Western diets. It’s also far more heat- and droughttolerant than other U.S. grains, such as corn or wheat, which explains its widespread cultivation throughout Africa and India – and its increasing share of North American cropland. It was virtually impossible for most people to know, until recently, that 60 percent of U.S. millet is grown on the arid high plains of Colorado. That was a problem Tim Larsen, senior international marketing specialist with the Colorado Department of Agriculture, set out to solve a few years ago when he applied for, and was awarded, a modest matching-funds grant through the Federal-State Marketing Improvement Prog ram ( FSM I P), administered through the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service. At the time, Larsen said, “There was literally nothing that would help you if you Googled ‘millet suppliers.’ Nothing came up.” Larsen created a simple Web page with information about Colorado millet, including a list of growers and packers interested in exporting. Within a month, the page was the first to pop up in Web searches for U.S. millet suppliers – but even before that, the state’s growers had begun to get calls from importers as far away as Malaysia.

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In Europe, which imports $40 million of millet a year – more than half the world’s millet imports – one of the largest trade events is the Zoomark International, a pet food and products fair that brings 600 exhibitors and 21,000 visitors. When Larsen recently invited a Colorado millet distributor to the 2014 show, he said, the distributor politely declined: “He said, ‘Tim, honestly, between the customers we found in Italy last year, and the three or four inquiries a week from your website, I don’t have enough production to add any new customers.’” The resources available to American growers and manufacturers hoping to claim a share of international markets are vast, with funds and knowledge flowing from the federal government, through the State Regional Trade Groups (SRTGs), down to individual state governments. It’s often at this last level of publicly funded agricultural expertise – particularly within the international marketing division of a state department of agriculture – that growers can find the level of know-how and proficiency

they need to connect with specific foreign buyers and make sales. Much of the success he’s achieved for Colorado growers and manufacturers, Larsen said, can be attributed simply to his personal relationships with individuals – knowing what they have, and what they want for their own businesses, helps him to understand what to look for in potential importers. The services provided by international marketing experts at state agriculture departments are both varied and exhaustive, and they begin long before a potential exporter hits the trade show circuit: Export Education

One of Larsen’s motivations for launching a millet export initiative was knowing that most of Colorado’s millet exports were going to Asia, where profits were lower than in the European market, and also that an inordinately large share of these profits were going not to the growers themselves, but to

Jose Hernandez, hosted by the USDA-NRCS PLANTS Database

EXPORT EXPERTS

USDA courtesy of Jennifer at sweetonveg.com

Above: Pearl millet. U.S. millet producers have found new markets for their grain thanks in part to state agriculture department marketing specialists. Right: A millet medley with carrots, mushrooms, and parsley. The Colorado Department of Agriculture used matching funds from a U.S. Department of Agriculture (USDA) Federal-State Marketing Improvement Program (FSMIP) grant to help millet growers in the state market their gluten-free grain to foreign consumers, whether for human or avian consumption.

middlemen: packers and shippers who were buying the millet and marking it up for export. Larsen urged growers to become exporters themselves – but for most it wasn’t something they could achieve overnight. He once received an email from a millet grower who had been contacted, through the website, by an importer: “He said, ‘OK, Tim, you keep telling me I should do this myself, so here’s the issue: I have someone who wants to buy container loads direct from me, and he says he wants a pro-forma invoice for C&F. And he says he wants the payment to be CAD. So what the heck did he just say?’”

Even with the most interested buyers, going abroad on a trade mission without knowing the logistics is a lost opportunity. State agriculture departments – often in partnership with regional or federal sponsors – administer a variety of export education initiatives to get producers up to speed before meeting with potential importers. In Hawaii, for example, the Department of Agriculture

recently hosted a seminar, “Growing Your Business Through Exporting,” in partnership with the U.S. Small Business Administration. The Michigan Department of Agriculture & Rural Development’s website contains multiple links to the recorded “Export Essentials” webinars offered by the SRTG Food Export-Midwest – including several webinars specific to regions or countries.

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EXPORT EXPERTS

Barge and ship traffic transporting export cargo on the Mississippi River in the Port of New Orleans, Louisiana. State departments of agriculture have the knowledge and resources to help growers find and sell to foreign markets.

USDA photo by Bob Nichols

Market Research, Analysis and Strategy

L ike most other departments, Michigan’s also has a staff of export consultants and assistants who provide market research; trade leads; advice on pricing, order processing, and payment collection; documentation; barriers to market entry; and international logistics. Its website also provides a direct link to the Food Export Helpline, a free service offering personalized, one-on-one export assistance. The reason many people are daunted by the idea of exporting, Larsen said, is that they’re looking at the world and imagining they’ll have to find a place for their crop or product. But in most cases, that work has already been done. If a grower approaches him and asks if he or she has export potential, Larsen is usually ready to find out. “I’ll tell them, ‘Let’s do a statistical analysis.’ I have a database in my office, and I can go down there and determine the top 20 markets for pinto beans around the world,” he said. “Now the grower isn’t looking at a map of the world. They’re boring into those markets, narrowing their choices down. They can decide whether they want to compete in the top five markets, say, or the middle five. We can look at five-year trends together, and see who might continue to grow or decline. There’s a million ways we can look at things.” International marketing experts at the state level can also provide individualized advice on pricing for foreign markets – a figure that can be difficult for a novice to calculate, given the different costs involved. But Larsen said it’s actually very simple: He starts with the retail price the importer needs to have for a certain markup, and walks the product back through the various stages of the export

process – such as duties and shipping. “If a buyer asks you: ‘What’s my landed price per unit going to be in Tokyo?’ – well, the people who come in prepared to answer that question are 10 times more likely to have results than the ones who say, ‘I’ll get back to you on that.’” Hosting Foreign Buying Teams

Every year, the four SRTGs bring delegations of international buyers to their regions to meet with suppliers, often in conjunction with a major U.S. trade show. In Colorado, Larsen sees these traveling delegations as an opportunity for quick flash sessions he likens to speed dating, putting potential exporters into contact with several different buyers in a morning or afternoon. Throughout the country, different state agricultural departments put their own spin on these opportunities. In Texas, for example, bilingual state marketing experts bring livestock buyers (many of them from Mexico) and sellers together: They arrange itineraries, meet buyers at the airport, and often escort them to Texas ranches, where they serve as guides and translators. In the past year, market experts with the Oregon Department of Agriculture have hosted visitors from Japan, China, Korea, India, and the Middle East – not just in one-on-one meetings at a government building, but in tours that take buyers to the farms and ranches that raise Oregon’s iconic produce, including berries, stone fruit,

wine, and nursery stock. The buyers often bring their families along for an extended vacation, to explore the waterfalls and mountain vistas of the Pacific Northwest. Peter Thornton, assistant director of the International Trade Office at the North Carolina Department of Agriculture and Consumer Services, said these inbound missions are a way for potential exporters both to cut costs and focus on what they do best. “Farmers are farmers,” he said. “They’re the mechanics, the bookkeepers, the hedge fund guys. They’re often everything. You throw international marketing into the mix, and there’s not a lot of time in the day for all that. I don’t encourage anyone to say, ‘OK, I’m going to start exporting,’ and then get on a plane, go to a big trade show, spend $10,000 for an exhibitor space, and spend a week away from the office or farm. We try to bring the buyers to them.” Establishing a Presence Overseas

North Carolina is among a few state agriculture departments that have stationed personnel overseas to focus on specific markets. Several years ago, the department sent a trade expert to Beijing to help promote exports of the state’s largest crop, tobacco – which the federal government is forbidden, by law, to promote. “China is our biggest market,” Thornton said. “It’s the fastest-growing market. Having a person there to help out makes a big difference for us.” Once

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EXPORT EXPERTS

USDA photos

Agriculture Deputy Secretary Krysta Harden examines Pacific Northwest cherries for sale at the Jiangnan Fruit and Vegetable Wholesale Market in Guangzhou, China (left), and receives a warm welcome at Jenny Wang’s, a Chinese specialty grocery store that sells a variety of American products (below left). China is a major importer of American agricultural products, and state agriculture departments strive to help U.S. producers capitalize on that demand.

the necessary high-level connections had been made, the department moved its person from Beijing, the seat of China’s government, to Shanghai, the source of much of its capital. Many state agriculture departments have overseas trade offices – Idaho’s Department of Agriculture, perhaps surprisingly, has three, in Taipei, Guadalajara, and Shanghai – but some are more established than others. The effort to open Chinese markets to North Carolina agriculture is relatively new, Thornton said, and with one person on the beat, things are moving slowly – but steadily. “I’d love to say this one person in our office in China is directing massive trade flows and changing the course of history,” he said. “And that is ultimately the objective – but really, we’re working on an individual-by-individual, companyby-company basis. For example, we’re

working with a North Carolina winery to market and sell their wine in China. And I think we’ve been pretty effective. We’re very proud of that.” Trade Show Assistance: Closing the Deal

Larsen, like most international marketing experts, considers the agricultural trade show to be a culminating event – it’s what happens, ideally, after a potential exporter has already learned what he or she needs to know, and verified that he or she is ready to make a sale and start shipping overseas in a specific market. Larsen had already, with help from USDA, set up several meetings and tours at bird seed production plants in England, Belgium, the Netherlands, and Germany – and discovered enormous

untapped potential for his state’s millet growers. “When we were done,” he said, “even the USDA folks realized there was more of a market than when we’d first started the initiative.” For the handful of Colorado millet growers who later accompanied Larsen to a European trade show, where they occupied a small booth, the first trip was eye-opening. They discovered, within an exhibit space of just under 2 million square feet for the pet food industry, more than 50 exhibitors who sold bird seed products. “And we learned that none of them grow their seed – they all buy it from people like us,” said Larsen. “And we also realized, further, that the top three ingredients in bird seed are millet, sunflower, and safflower seeds. We grow all three of those in Colorado. So we thought: Let’s not just sell them one. Let’s sell them all three.” Larsen has since updated his millet portal on the Colorado website to include production information for all three crops, with a page devoted specifically to the European bird seed market. He’s also devoted a page to the growing glutenfree market, which he estimates will be a $6.6 billion market by 2017. Inroads into such a large overseas market, developed within a span of just a few years, are probably an extreme example, but Colorado’s booming millet exports illustrate how a state’s international marketing experts, with their idiosyncratic insights – their personal relationships with growers and their detailed knowledge of world markets – can transform potential into profit for growers throughout the state.

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littlefield interview

Q&A Elizabeth L. Littlefield, OPIC President and CEO The Overseas Private Investment Corporation (OPIC) is the U.S. government’s development finance institution. It mobilizes private capital to help solve critical development challenges and, in doing so, advances U.S. foreign policy. OPIC operates in 150 countries and manages an $18 billion portfolio of financing and insurance to support private investment in sustainable economic development, especially in the world’s poorest countries. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, jobs, and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds. It operates on a self-sustaining basis at no net cost to American taxpayers.

lizabeth L. Littlefield was appointed by President Barack Obama as the president and CEO of OPIC, an under secretarylevel position. Under Littlefield’s leadership, OPIC’s annual commitments to renewable resources projects grew tenfold in three years to $1.5 billion, while generating increasing income for the federal budget – a number that reached $426 million in 2013. She has also instituted major reforms of the agency’s

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policies, systems, and processes and introduced new financial innovations to augment the agency’s development impact. Littlefield has been appointed by Obama to serve as a member of the White House Development Council and the President’s Export Council. Littlefield was presented in 2012 with the Secretary’s Distinguished Service Award, the highest award in the Foreign Service, by then-Secretary of State Hillary Clinton.

World Agriculture Outlook: Why is private investment so critical to promoting renewable resources and what is the value of publicprivate collaboration? Elizabeth L. Littlefield: Nations need a robust private sector if they hope to have economies that will create and sustain better jobs. Reliance on foreign aid and reliance on foreign sources of energy can be a bridge toward sustainability, but more and more, nations are realizing that it should not be more than a temporary bridge. OPIC’s mission is at the junction of these t wo issues. We leverage pr ivate busi ness to ma ke longterm investments in high-impact sectors, which helps create economic sustainability in developing markets. In doing this, we have also made major strides in increasing our investment in renewable resources, contributing to both economic and environmental sustainability. We believe this type of investment is more durable for development, and it helps harness business as a tremendous force for good in a way that was not envisioned on this scale even 10 or 20 years ago. Private investment abroad, helped by agencies such as OPIC, has a tremendous multiplier effect there and at home. The advantage OPIC brings is 40 years’ worth of experience in making that happen. We’re open for business in more than 150 countries around the world.

OPIC photo

littlefield interview

Photo by Toby Jorrin/OPIC

Above: OPIC loan recipient Global Partnerships, one of the three clients awarded the Access to Finance award, facilitates small microfinance loans in poor rural communities in Latin America like the one pictured. It augments that financial support with other services, such as business and health education classes, as part of its broad strategy to give poor people the tools to improve their lives. Right: Elizabeth L. Littlefield (center), president and CEO of OPIC, signs a memorandum of understanding with Thomas McCaffery (left), Wells Fargo executive vice president, and Mohamed El Kettani (right), chairman and CEO of Morocco’s Attijariwafa Bank, at OPIC’s Washington headquarters on Aug. 4.

Though “renewable resources” is a phrase generally associated w it h energ y, ca n you expla in why food and food security also fa ll under OPIC’s renewables sector?

Once a nation mines and exports, say, mineral or oil and gas deposits, they are gone forever. They cannot be replenished and can no longer help the economy. Through smart growth and new technology, private investment can

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littlefield interview

Photo by Toby Jorrin/OPIC

their livelihoods. We are going to have to find more effective ways of producing and deploying the Earth’s bounty in the future than we have in the past. Is it fair to say that activities related to agriculture, nutrition, and health need to be better coordinated and linked? Absolutely. If you look at some of the long-term projections for health care around the world, some of the most alarming changes in the developing world are in what are called non-communicable diseases, such as heart ailments and diabetes. Those two, in particular, are intrinsically diet related. So when we invest, we do look for opportunities to support organics, sustainable farming, and a more diversified food supply chain that can get better food to more people. More broadly speaking, OPIC’s ex per ience shows t hat t he best

A health care professional weighs a newborn at the Mission Mbagala clinic on the outskirts of Dar es Salaam, Tanzania. The clinic was the recipient of an affordable loan from Medical Credit Fund, an OPIC-supported project and the recipient of the 2014 OPIC Impact Award for Access to Finance.

development projects are ones that have multiple linkages to other projects and sectors. We invest in power, infrastructure, agriculture, access to f inance, education, and health care, to name a few. Without power, for example, manufacturing or food processing is slow to flourish. Without roads and transportation infrastructure, it is much more difficult to get fresh farm produce to market or to get farm workers reliable medical care. As a

development finance agency, we not only focus on those linkages but try to help private investors optimize them because it helps both businesses and communities in the long run. Why is it that many African countries are still food insecure a nd what is OPIC’s role in addressing these challenges? True food security depends on countless factors that are far beyond the seeds, irrigation, fertilizer, livestock, and equipment on a farm. Roughly 600 million Africans still do not have basic access to electricity. Clearly, you cannot have food refrigeration and foodpackaging facilities if you do not have electricity. And that’s just one barrier. You must have roads, ports, trucking companies, and shipping containers to get to local and global buyers. Integration into local and regional markets is

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FOOD FOR THOUGHT. INFORMATION FOR BUSINESS.

littlefield interview

Left: During the U.S. Africa Leaders Summit in August 2014, Littlefield met with many African heads of state, including Faure Gnassingbé, president of Togo (seated at left). Bottom left: A team of Rwandan workers helps to construct the 8.5-megawatt GigaWatt Global solar power project, one of the power projects that was supported by funding through an OPIC Africa Clean Energy Finance (ACEF) grant.

OPIC photos

a structure dedicated to achieving both impact and financial returns. Through a system of tagg ing our investments to categorize their development impact, OPIC has helped to inform the growing field’s definition of what constitutes impact. OPIC also offers pilot innovations such as the Portfolio for Impact [PI] to support impact projects at an early stage, and the Innovative Financial Intermediary Program [IFIP] to combine the development effects of private equity funds and direct project financing.

necessary to send the right price signals to producers, so efficient producers are rewarded and inefficient producers can adjust their strategies. In Africa, we have seen cases where agribusiness exporters had to solve gaps in the land registry system for smallholder family farms. Our approach to development addresses not just farming and agriculture directly, but also broader development. Can you explain the concept of impact investing and how it differs from socially responsible investing? What do you see as OPIC’s role in impact investing?

Impact investing aims to transform private capital into solutions for common challenges such as access to education, financial inclusion, housing, health care, and climate change, while at the same time generating sufficient returns to constitute viable investments. Socially responsible investing is a broader term that encompasses investments that have a positive development effect or that screen out negative effects, but OPIC reserves the specific term “impact investing” for instances when the partners we support design their very business models with an explicit and inherent intent to address environmental or social issues, as well as

Can you give an example or two of an impact investing project that OPIC has supported? Some recent examples of OPIC’s commitments to support impact investing include: • $15 million in financing to Seattlebased Global Partnerships for microf inance lending across Latin America, with particular focus on institutions that provide services in health services, rural livelihoods, green technology, and microentrepreneurship. • Political risk insurance coverage to Arkansas-based Westrock Cof fee Holdings, to support modernization of a coffee milling and processing plant in Kigali, Rwanda. Westrock has helped t ra nsfor m Rwa nda’s cof fee sector by investing in facilities, training, and sustainable farming and business practices, and by connecting farmers with international buyers.

WORLD AGRICULTURE OUTLOOK

DOMESTIC FARMERS, GLOBAL REACH

DOMESTIC FARMERS, GLOBAL REACH By Craig Collins

It seemed clear that if Vick Family Farms was going to expand its sweet potato business, it was going to have to expand somewhere else. Fortunately, several entities, including the state’s Depar tment of Ag r iculture and Consumer Services and the nonprof it North Carolina SweetPotato Commission, were at work drumming up business elsewhere – specifically in Europe, a relatively short boat ride from the nearby Port of Virginia. But when Charlotte went to her first trade show, in London, she wasn’t too hopeful. “A lot of people didn’t know what sweet potatoes were,” she recalled. “The sweet potato they were familiar with was actually a yam. It didn’t taste the same. It didn’t look the same. It came from another country. They weren’t aware of how to cook it.” Most European markets labeled sweet potatoes an “exotic vegetable” and put it in a niche case along with things like bok choy. Vick talked to a few people at the show, passed out some Vick Family Farms refrigerator magnets, and persistently called and emailed potential buyers, to no avail – until two years later, when she

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heard back from a large company that was beginning to consider importing sweet potatoes – and still had one of her refrigerator magnets. About six months later, Vick Family Farms shipped its first container of sweet potatoes overseas. That was about a decade ago, when those first exports accounted for about 10 percent of the Vicks’ crop. Today they ship about 60 percent of their potatoes to overseas markets. “And I would say 95

percent of that growth has come within the last two years,” Vick said. Not coincidentally, she took over the farm’s marketing function just before that explosion in growth. When it began exporting, Vick Family Farms was small enough that it had to rely on co-packing agreements to reach foreign markets. But in Charlotte Vick’s view, those arrangements were simply allowing other farmers to cash in on the quality

Photo courtesy of Vick Family Farms

Jerome and Diane Vick began farming in 1975 on 25 acres in eastern North Carolina. Year by year, they expanded. In 1982, they began growing sweet potatoes – a high-value crop, but one for which demand seemed to slump over the next couple of decades. When the Vicks’ daughter, Charlotte, became a full partner in the business in 2002, she looked around and saw a domestic market that was – and is – pretty well saturated. “A lot of people are very committed to the growers and packers they’ve been shipping to and buying from for years,” she said. “It’s hard to even get them to talk to you.”

AP photo

DOMESTIC FARMERS, GLOBAL REACH

of their product. When she took charge of marketing, “I said: ‘This is really crazy. We need to be marketing that under our name, in our box, because we stand behind that. We grew the product and put it in the box, and that’s the reason for the interest in us.’” The Vicks’ own brand, Carolina Gold, accounts for part of a surprising market transformation – literally the creation of a European sweet potato market where one had not existed. North Carolina growers, who produce just under half of all American sweet potatoes, are riding the wave: Between 2005 and 2009, the value of U.S. sweet potato exports more than doubled to $51.4 million, with much of that growth occurring in Europe and the United Kingdom in particular. Today, the Vicks grow sweet potatoes on about 1,300 acres – and Europe wants more. “Even though the phone is ringing off the hook and everybody is offering this crazy money, and asking for a crazy

Opposite page: Vick Family Farms exports about 60 percent of its Carolina Gold brand sweet potatoes. Above: Vick Family Farms washes, packs, and ships its own sweet potatoes.

amount of volume,” Vick said, “I can’t sell to them. I did generate a few new customers that I was able to give a little bit of product to, but I’m very loyal to the customers that have been with me for a couple of years now and helped us get started. So I make certain I have enough product to look after them year-round.” Why Export?

Entering an overseas market involves obvious challenges: It requires you to learn how to jump through new logistical and bureaucratic hoops, and it often

involves costs and expenses beyond the domestic market. Despite those additional costs, exporting remains prof itable – if it weren’t, nobody would do it. For many farmers, the primary question is whether they can position themselves to capture more of the profits involved in exporting. In Colorado, for example, Tim Larsen, a marketing specialist with the state’s department of agriculture, launched a program to boost the state’s millet exports a few years ago. When he started examining the market, he found that 50 to 60 percent of Colorado’s millet was going overseas – it just wasn’t being exported by Colorado farmers. “We found that only about 15 percent of that was marketed by people in Colorado,” he said. “So what you’ve got is a middleman in another state who f inds he can buy it from you, package it up, and make a profit by exporting it. The issue to some of the

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ILLINOIS known for our diverse product offerings...

Illinois is a leading producer of soybeans, corn and swine with an export focus on livestock and livestock genetics, grains, feed and feed ingredients, agricultural equipment, bakery products, candy, ingredients, meat and meat products, snack foods, beverages, dairy products, prepared and frozen prepared foods, ethnic foods, condiments, spices and seasonings, and sauces. World Trade represents a significant part of Illinois’ agricultural economy and the state’s companies are recognized worldwide for their quality foods. In fact, the state ranks second in

the nation with $102 billion in processed food sales. Illinois also ranks third in the nation in agricultural products, with annual exports of more than $8.2 billion, and fifth among all states in processed foods, with annual exports of more than $3.5 billion. Illinois’ top trading partners include China, Canada, Mexico, Taiwan, Japan, Indonesia, Vietnam, Korea, Chile, and the Philippines. Top export commodities are soybeans, corn, grain products, vegetable oils, oilcake and meal, pork, feeds and fodder and wheat. If you are a buyer interested in sourcing product, please contact: Kim Hamilton, International Marketing Representative Illinois Department of Agriculture • 217-782-5809 • Kim.Hamilton@illinois.gov www.agriculture.illinois.gov

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DOMESTIC FARMERS, GLOBAL REACH

Sweet potatoes are one of many high-value specialty crops distributed by Pilot Mountain Pride, a cooperative in Pilot Mountain, North Carolina. North Carolina sweet potatoes must be cured to the U.S. quality standards, washed, and boxed, tasks that can be performed by a packing house run as a farmers’ cooperative.

USDA photo by Bob Nichols

farmers is: Do you want to get more directly involved?” Later, at a European trade show, one of the millet growers accompanying Larsen met a bird seed manufacturer who wanted to buy directly from a farmer, cutting out the middleman’s markup. “He handed him his card and said, ‘As soon as you get a price, let me know. I’d like four containers a month for 12 months,’” Larsen recalled. “Well, if that farmer can make $1,000 per container, that’s $48,000 . . . or he could send it to somebody else who will make $48,000 on that movement. You have to evaluate whether exporting works for you or not.” Despite the challenges and obstacles associated with exporting, there remain plenty of good reasons – in addition to short-term profit – for a small company or grower to enter overseas markets: • Exporting broadens a customer base and spreads risk. The United States is a big, wealthy market for food products, accounting for about a third of the world’s purchasing power – but it accounts for only about 4 percent of the world’s population. The other 96 percent are elsewhere, and they often enjoy U.S. food products as much as – and in the cases of certain niche products, more than – American consumers. If one market for a product inexplicably tanks, as they often do, another may just as inexplicably begin clamoring for the same product. The only way to capitalize on these trends, and to become less vulnerable to market fluctuations, is to be in as many markets as makes sense. • I nter n at ion a l m a rket s a re

gradually becoming more accessible. In recent decades, barriers to trade – duties, tariffs, and technical regulations and restrictions – are gradually lifting, thanks to more than 20 free trade agreements negotiated to decrease the U.S. trade deficit. These agreements have generally been helpful to all agricultural exporters, but particularly so for exporters of value-added products. • Demand for food products is increasing much more rapidly overseas than at home. Lower trade barriers and increasing purchasing power have driven a surge in overseas demand. According to USDA, exports of American consumer food products are growing three times faster than sales in the United States. • Export assistance is available everywhere you look. The reasons

most farmers and companies give for not exporting is that they don’t know where to start. But help is available and abundant: At the federal level, the Foreign Agricultural Service has a useful website and helpful staff around the world. The four State Regional Trade Groups (SRTGs) and individual state departments of agriculture offer a wealth of information online; educational seminars; hotlines to provide oneon-one counseling and guidance; and information resources about where to find potential importers. • Exporting improves long-term business security. Having a third of the world’s buying power and lower barriers to trade is a doubleedged sword: The United States is a desirable market not just for you, but for everyone else in the world. While these foreign competitors

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DOMESTIC FARMERS, GLOBAL REACH

For farmers wishing to export, state and federal help is readily available.

Scaling Up, Tapping In

For a simple small farmer or rancher, it’s not as easy to tap into foreign markets – and it may not even be feasible if you raise, say, live chickens. Some logistical adjustments are necessary. “Certain products just don’t lend themselves to direct exporting,” said Peter Thornton, an international marketing expert with the North Carolina Department of Agriculture and Consumer Services. Other products, such as soybeans or sweet potatoes, need to be collected in large enough quantities to achieve the appropriate economies of scale. North Carolina sweet potatoes, for example, need to be cured to the U.S. quality standard, washed, and boxed – all tasks that can be performed by a packing house that’s either privately owned or run as a cooperative among farmers. “If you’re a standard farmer and you don’t have those facilities,” Thornton said, “you can’t just dump a truckload of dirty sweet potatoes into a container and

WORLD AGRICULTURE OUTLOOK

send it over to Europe.” But of course, as your exports grow, you may also find, as the Vicks did, that you’d prefer to take on these tasks yourself and send a product overseas in your own name. In Colorado, where half of Mexico’s imported potatoes are grown, about 160 farmers in the San Luis Valley combine their resources to run 12 farmer-owned packing sheds, according to Larsen. “Some of the farmers run them as entrepreneurs – they’ve said, ‘I’ll take all the risk. I’ll make the investment and buy your potatoes from you. Others have said: ‘Let’s each put up some money and do this together.’ Not every farmer is directly involved in exporting.” For growers of soybeans or grain, the analogue to the packing shed is the elevator, where quantities are collected, cleaned and prepared for market, and offloaded for transport by rail, truck, or barge. Many resources exist to help the individual farmer achieve the economies of scale necessary to become an exporter – commodity-specific boards, commissions, and councils, for example, use a mixture of industry and government funding to help farmers enter foreign markets. An obvious example is the U.S. Soybean Export Council, whose leadership includes members from both

The State Regional Trade Groups and MAP

For producers of value-added products, the M A P, administered by USDA’s Foreign Agricultural Service and conducted by the SRTGs, is most often the mechanism used to find foreign customers. MAP-funded activities help educate companies about exporting, connect them with potential overseas buyers, reimburse them for much of the costs of trade show participation (which can be considerable), and then offer financial and technical assistance to help get products shipped overseas. According to Bernadette Wiltz, executive director of the international marketing program for the Southern United States Trade Association (SUSTA), MAP funding can also help connect trade show

USDA photo

are venturing into what is increasingly a single global marketplace, it makes better long-term sense for American food and agriculture companies to be competing overseas, where the future of trade lies.

the American Soybean Association (the industry lobbying organization) and the United Soybean Board (the federal commodity checkoff program overseen by the Agricultural Marketing Service) and funded partly through the federal Market Access Program (MAP). The council operates several offices in target markets throughout the world. Several public-private enterprises exist at the state level, such as the California Walnut Commission, a state agency funded through mandatory grower payments and authorized through periodic referenda of the growers. The commission develops state export markets for the walnut growers in concert with the secretary of the California Department of Food and Agriculture. Farmers of many crops join forces through voluntary nonprofit trade associations or cooperator groups such as the U.S. Meat Export Federation, American Pistachio Growers, or the Pear Bureau Northwest – all of which offer counseling and material support to farmers or ranchers interested in exporting.

DOMESTIC FARMERS, GLOBAL REACH

Courtesy photo

USDA photo

Right: SIAL China 2011. The Federal Market Access Program can often reimburse some of the costs of attendance at foreign trade shows. Bottom right: Alex Weiss from Caledonia Spirits, Arnold Coombs from Bascom Family Farms, and Jeremy Stephenson from the Vermont Cheese Council attend the Food and Hotel China Show in Shanghai to exhibit their agricultural products. The small businesses attended the trade show with the help of one of the State and Regional Trade Groups, coalitions of state departments of agriculture, that use U.S. Department of Agriculture (USDA) market development program funds to provide support for about 30,000 companies annually.

participants with people – demonstration chefs, interpreters, and in-country market consultants – who can help to make a sale. MAP assistance is available to “small” agricultural companies, generally defined as those with annual receipts up to $750,000 and fewer than 500 employees. It was a SUSTA-sponsored event, in fact, that helped facilitate the unlikely introduction of a Southern holiday- and cocktail-party staple – the cheese straw – to China. Ginny Johnson’s 150-year-old family recipe (“really good extra sharp cheese, butter, flour, and spices”) already had American customers clamoring for Ginny O’s Cheese Straws; the crackers had been profiled on the Food Network and in Oprah Winfrey’s O Magazine and former first lady Laura Bush had already ordered them to be served aboard Air Force One by the time a Chinese buyer happened across them at a North Carolina trade event. A c c or d i n g to Joh n son , wh at happened after her meeting with that buyer and his interpreter – and ultimately resulted in the largest single order for her product to date – can only be described as one of the biggest logistical challenges she’s faced. “I was up all night every night for about two months,” she said. “They about beat me to death asking questions. They wanted to know the enzyme in the cheese, and the bacteria. And I was like: ‘Good

God, Google it. I don’t know. All I know is cheese, butter, flour, and spices.’” She learned, among other things, that she needed the product to be shipped on non-wood pallets – and that she needed to authenticate the sourcing of those pallets. The learning curve, she said, was steep, but she also received much help along the way, from the people at SUSTA and the state’s department of agriculture. Her shipment eventually made its way to China. Despite her successes at home, Johnson is still open to the idea

of exporting elsewhere – but she’s encountering, in her discussions with buyers from Europe, a seemingly a rbit ra r y set of rest r ict ions on ingredients such as cheese and butter. She’s also met interested buyers from Hong Kong, however, where regulations are easier to work through. The Hong Kong buyers asked Johnson to fly out for a meeting – but she declined. “They’re flying here,” she said. “I have to stay and be the manufacturer. I’m quality control. I don’t have time to go to Hong Kong.”

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ross interview

Q&A Karen Ross, Secretary of California Department of Food and Agriculture Karen Ross was appointed Secretary of the California Department of Food and Agriculture (CDFA) on Jan. 12, 2011, by Gov. Edmund G. Brown Jr. Ross has deep leadership experience in agricultural issues nationally, internationally, and in California. Prior to joining CDFA, Ross was chief of staff for U.S. Agriculture Secretary Tom Vilsack, a position she accepted in 2009.

efore her time at the U.S. Department of Agriculture (USDA), Ross served more than 13 years as president of the California Association of Winegrape Growers (CAWG), based in Sacramento. During that same period she served as the executive director of Winegrape Growers of America, a coalition of state winegrower organizations, and as executive director of the California Wine Grape Growers Foundation, which sponsors scholarships for the children of vineyard employees. From 2001 to 2009, Ross served on the California State Board of Food and Agriculture. She was chair of the Ag Vision Subcommittee, which initiated the California Ag Vision process that resulted in a report

issued in 2010 proposing a strategic plan for the future of the state’s agriculture and food system: www.cdfa.ca.gov/agvision/ From 1989-96, Ross was vice president of government affairs for the Agricultural Council of California, representing farmerowned cooperatives. Ross was born and grew up as a 4-H kid on a farm in western Nebraska. She and her husband, Barry, own 800 acres of the family farm where her younger brother, a fourth-generation farmer, grows dry-land wheat, sunf lowers, feed grains, and cattle. Ross has a Bachelor of Arts degree from the University of Nebraska-Lincoln and is a graduate of the Nebraska Ag Leadership Program.

World Agriculture Outlook: How big a part of the state’s economy is agriculture? And how much of that is exports? Karen Ross: Outside of Hollywood and Silicon Valley, California is a farming state. More than 10 percent of the nation’s food and agricultural products are grown and processed in California, and our farmers and ranchers

play a vital role within the international marketplace. By the numbers, California produces $42.6 billion in agricultural products and exported more than $18 billion.

How does California compare to other states in terms of agricultural production? California is the leading agricultural producer and exporter in the nation. Part of this success is the state’s unique Mediterranean climate and fertile soils that allow for the production of a diversity of agricultural products. Also, California has always been the land of innovation. This is something that has helped inspire farmers and ranchers to make California agriculture what it is today – a global brand like no other.

What are California’s top export commodities? California is blessed with a diversity of agricultural products. Specialty crops

How has agriculture evolved in California in terms of percentage of the population involved in agriculture?

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(tree nuts, vegetables, fruit, and wine) dominate the state’s top 10 agricultural exports; however, dairy, beef cattle, and cotton also play a significant role. Dairy products are the state’s second-largest agricultural export, valued at $1.3 billion, only $2 billion shy of our leading export – almonds, valued at $3.3 billion.

ross interview

Across the nation, we are seeing a shift of attitude towards agriculture and to individuals that grow and raise our food. More and more people are interested in where their food is coming from, how it is produced, and who is growing it. This is exciting, because this interest in our food supply has invigorated millennials and others to reconnect to our nation’s roots in farming. As a result, we are seeing the growth of farmers markets, urban farms, and other direct-to-market opportunities. This interest in farming and food is something we should strongly cultivate and encourage. The average age of a farmer in the United States and California is more than 58 years, and less than 1 percent of our population is engaged in agricultural production. By embracing this renewed interest in farming and food, everyone can benefit. What is the breakdown of acreage within the state dedicated to crops and livestock? California has approximately 25 million acres of farm and rangeland and our crops represent a little over 9.5 million. Irrigated agriculture accounts for more than 76 percent of our cropland.

USDA photo by Ken Hammond

How does CDFA faci litate communications between international buyers and California suppliers? Within California, our agency works closely with a multitude of nonprofit and locally based trade associations to facilitate direct business-to-business communications. Also, California’s agricultural marketing orders, boards, and commissions serve as a primary resource for farmers and ranchers. As a state, we rely heavily on the resources and expertise of the USDA’s Foreign Agricultural Service and their offices around the globe. What type of resources does your office offer local producers? Agricultural producers, packers, and manufacturers have a variety of trade services available to them at both the local and regional level. Our agency has partnered with California’s Community Colleges, which has a

California is blessed with a diversity of agricultural “products. Specialty crops (tree nuts, vegetables, fruit, and wine) dominate the state’s top 10 agricultural exports; however, dairy, beef cattle, and cotton also play a significant role.

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network of international trade centers located throughout the state. These “Centers for International Trade Development” provide training and services to California businesses interested in exporting. California is also a member of the Western United States Agricultural Trade Association (WUSATA®), a nonprofit trade organization that conducts market development activities such as trade shows and trade missions, in which California companies can participate. Can you highlight a program or two in place to assist companies with international marketing efforts? One program that has been very benef icial to California is the State Trade and Export Promotion [STEP] Program, which was an initiative under the U.S. Small Business Administration. This program was a direct benefit to small businesses within California, providing opportunities for them to expand sales and business internationally. As part of this program, over a two-year period, the state of California was able to conduct 84 internationally focused activities with more than 900 businesses. STEP provided the opportunity for California to engage several industry sectors (including agriculture) in market development and promotional activities. What are you doing that differs from other states? Overall, I believe we have more similarities than differences in the marketing and promotion of U.S. agricultural products in the international arena. California may have an advantage with our iconic images and lifestyle – California is truly a place like no other – but in the end, we are all working together to ensure opportunities for U.S. business overseas.

How are California’s farmers adapting to the ongoing three-year drought, and what sort of impact is this having on overseas buyers? The drought continues to be a significant impact to the state. As of July, it is estimated that the total economic cost to the state is $2.2 billion. This includes the loss of more than 17,000 seasonal jobs, and the fallowing of 428,000 acres (or 5 percent of California’s irrigated cropland). More than 81 percent of the state is in an extreme drought. Our farmers and ranchers have been very proactive in adapting to drought periods and have taken signif icant steps to use water as eff iciently and effectively as possible. When crises like this drought occur, everything that can be done on the farm is being done – def icit irrigation, fallowing, drip tape/micro-misters, etc. The long-term challenges of water storage and groundwater management are also being addressed. Overall, it is still too early to see what the impact of the drought will be to overseas buyers – a lot depends on the current crops and what the upcoming winter will be like. However, for those concerned – California will always be open for business. Is there anything else you’d like to add? I cannot emphasize enough the important role and services that the USDA’s Foreign Agricultural Service provides to businesses and state government. The overseas offices are a key resource in helping companies navigate foreign markets, make connections with buyers, and receive market information and reports. I’ve had the opportunity to visit several offices over the last few years and the dedication and commitment these individuals have to assisting companies is unsurpassed.

WORLD AGRICULTURE OUTLOOK

LIVESTOCK AND ANIMAL PRODUCTS

MARKET OUTLOOK: LIVESTOCK AND ANIMAL PRODUCTS By Craig Collins

Worldwide, demand for meat and other animal products – which account for more than half of all U.S. agricultural cash receipts – continues a steady climb. The USDA’s Economic Research Service (ERS) forecasts $32.2 billion in U.S. livestock, poultry, and dairy exports for fiscal year 2014, and while this number has increased over the years, it has also begun to consume a larger share of the overall total of U.S. agricultural exports. In Februar y 2014, when ERS reported its market projections for the coming decade, it joined most analysts in pointing to the developing world’s expanding middle class as the primary factor driving market changes. Surging populations, accompanied by income growth and increasing urbanization, especially in nations such as China and India, are transforming global agricultural trade in a variety of ways. Overall, one of the least surprising developments has been the increasing demand for meat and poultry among the world’s increasingly more affluent middle-class populations. “Low- and middle-income countries are projected to account for a large majority of the increase in world agricultural consumption and imports over the next decade,” stated the ERS report. “In the projections, about 80 percent of the increase in global consumption of meat … comes from developing countries.”

WORLD AGRICULTURE OUTLOOK

In China, the migration of rural villagers to urban centers, interestingly, has also resulted in increased production, as the livestock sector moves away from subsistence farming to larger commercial operations – but the ERS report went on to state that these production increases were not expected to keep pace with demand. Up to 90 percent of the total increase in meat imports is expected to occur in the developing world. The 2014-2023 projections recently released by the Food and Agriculture Organization of the United Nations ( FAO) a nd t he O r g a n i z a t ion for Econom ic Cooperat ion and Development (OECD) paint a similar picture: Global meat consumption, they predict, will rise 1.6 percent annually over the next decade, resulting in more than 58 million tons of additional meat being consumed in 2023. Generally, export prospects for U.S. meat producers will continue to be strong

in all parts of the developing world – Africa, the Middle East, much of Asia, and Central and South America. With more established trading partners, export growth will be slower and steadier, with notable exceptions such as Mexico – set to double its imports of U.S. meat over the next decade – and Russia, which had begun to curb imports and encourage domestic production long before the August 2014 announcement of its one-year ban on U.S. agricultural imports. The ERS outlook was also favorable, though less dramatically so, for U.S. dairy and egg exports; while breeding genetics and nutrition are projected to increase U.S. egg production by a billion dozen eggs over the next 10 years, from 7.7 to 8.7 billion dozen, U.S. exports are likely to increase only modestly, from 302 million to 329 million dozen. Over that same span, however, the egg/feed price ratio is projected to increase favorably for egg producers, from 7.4 to 10.9.

LIVESTOCK AND ANIMAL PRODUCTS

Breeding, technology, and nutrition will likewise boost the production of milk from 200 billion to 246 billion pounds annually, despite virtually no change in the size of the nation’s dairy herd, and while exports of both milkfat and skim solids comprise a relatively small fraction of overall sales, those exports are likely to increase and to make up a greater percentage of U.S. receipts.

USDA photo by Lance Cheung

Pending Trade Agreements

Much of the future of U.S. agricultural trade hangs in the balance, as the United States continues to negotiate – and, according to some negotiators, nears the home stretches of – two of the largest free trade agreements in its history: the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP). The TPP has been negotiated since 2005 by 12 countries in the Asia-Pacific

Cattle graze at the Tuckahoe Plantation in Goochland County, Virginia. The U.S. Department of Agriculture’s Economic Research Service predicts $32.2 billion in U.S. livestock, poultry, and dairy exports for FY 14 as demand worldwide for meat and other animal products continues to climb.

region that together account for nearly 40 percent of global GDP: Australia, Br u nei, Ca nad a , Ch i le, Japa n, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Terms for several of the most contentious TPP issues – including agriculture – remain unresolved. The two key partners in the agreement are the United States and Japan, the group’s largest economies and the countries with the most disparate approaches to trade.

One of the issues that continues to stall TPP agriculture talks is Japanese protectionism, including the country’s high tariffs on U.S. beef, pork, and dairy products; in August, Japan was insistent on clinging to tariffs for “sensitive” agricultural products such as U.S. beef – against which it levies a staggering 38.5 percent tariff. 140 members of the House of Representatives responded to this demand by sending President Barack Obama a letter, asserting they would withdraw their support of the agreement if U.S. negotiators accepted anything less than the elimination of all trade barriers to U.S. agricultural goods. The two nations’ positions remained far apart as the group commenced its 21st round of negotiations in early September 2014 in Hanoi, Vietnam. T-TIP, a proposed free trade agreement between the United States and the European Union, is in the advanced stages of negotiation, and is hailed by proponents

WORLD AGRICULTURE OUTLOOK

USDA photo by Lance Cheung

LIVESTOCK AND ANIMAL PRODUCTS

as an agreement that will boost economic growth on both sides of the Atlantic by $100 billion annually. Critics of the agreement, however, claim it will further consolidate corporate power and make it more difficult for governments to impose market regulations that would benefit the public. While economic barriers between the EU and the United States are relatively low, U.S. access to European markets remains a topic of concern. U.S. negotiators claim that several EU sanitary and phytosanitary (SPS) regulations are effectively non-tariff barriers to trade – especially since few of the regulations are based on peerreviewed science. The European ban on beef raised with growth hormones, for example, has existed since the 1980s, when it was imposed during a transAtlantic trade war, and it hasn’t been dropped despite the lack of evidence supporting the claim that their use poses a health risk to consumers. Polls conducted in Germany during the summer of 2014 found, likewise, the widespread belief

Pigs at Keenbell Farm in Rockville, Virginia. Hog prices have risen dramatically in 2014, due in part to a winter epidemic of Porcine Epidemic Diarrhea virus.

that consuming chicken disinfected with chlorinated water was a danger to human health, despite the practice’s success in killing foodborne bacteria. U.S. negotiators, at the time, were urging that scientific studies, and not polls, should be the only accepted criteria for SPS policies; consumers could then make their own purchasing decisions once certain products reached European markets. The issue remained unresolved as of September 2014, but both sides publicly voiced the belief that the agreement could be finalized by the end of the 2015 calendar year. Once concluded, T-TIP, with 800 million American and European citizens, would comprise the world’s largest free trade zone.

Pork

In the United States, prices, supply, and demand in certain market segments have been pushed in surprising directions by unpredictable factors. By the end of 2014, hog prices will have increased by about 29 percent in the span of a year, a spike due in large part to the winter epidemic of Porcine Epidemic Diarrhea virus (PEDv), a coronavirus that can be deadly to very young piglets. Since making its first U.S. appearance on an Iowa hog farm in May 2013, the virus has spread to more than 30 states and killed an estimated 7 million animals. USDA economists project that, overall, commercial pork production for 2014 will be only about 2 percent lower, however, than the previous year’s. The reason? The dressed weight of an American hog carcass has reached a record: A carcass is 8 pounds heavier, on average, than in 2013. Erin Daley Borror, an economist with the U.S. Meat Export Federation

WORLD AGRICULTURE OUTLOOK

(USMEF), explained the logic behind this seeming paradox: “Cheaper feed and more barn space per hog, because of the reduction in numbers,” she said. “And record-high hog prices have given producers the incentive to get those hogs as big as possible.” Domestic purchasing issues in other countries, Borror said, have led to interesting supply and demand shifts around the world. “The U.S. is actually exporting a larger share of our production so far for the first half of the year,” she said, in spite of steady domestic supplies in Europe and China. In mid-January – months prior to Russia’s retaliatory ban on American and European agricultural imports – Russia had banned pork imports from Europe due to an outbreak of African swine flu, closing Europe out of its top pork market. Before the August ban, Russia was not a market for U.S. pork, and Borror said U.S. suppliers had begun to make inroads into the Russian market by the time of the August ban. But the ripple

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Though millions of pigs have fallen victim to PEDv in the last year, pork production has decreased only slightly because hog carcasses are 8 pounds heavier on average this year than in 2013.

effect from Russia’s ban of European pork has been more significant than its ban of U.S. products, she explained. “What it did was force more European pork into all of our Asian markets,” she said, “which we have been facing all year. That’s been a pretty big challenge – and again, a testament to the demand for U.S. pork, because our exports have still managed to grow, even with that European pork being displaced from Russia and shipped heavily into all of our Asian markets: Japan, Korea, the Philippines, and China.” In June, U.S. exports to Hong Kong and China were about a third lower than they had been a year earlier.

Compounding this problem, Borror said, is that the U.S. PEDv epidemic has caused a temporary inversion in pricing structures; U.S. pork, normally among the lowest-priced in the world, was about 13 percent more expensive than European pork through the first half of 2014. “That’s really backwards from where it normally is,” said Borror. “In the same period last year, EU prices were about 19 percent higher than the U.S.” In the near- and long-term, Borror and USDA’s economists see a big potential for growth in pork exports to Asia, Mexico, and South America, where bilateral agreements have opened the door to a considerable inf lux of U.S. pork. Colombia, Borror said, has been “explosive … they are a larger population, with relatively low per-capita pork consumption – a small base with room for tremendous growth.” The two markets where pork imports are likely to increase the most over the next decade, according to USDA’s economists, are Mexico and

USDA photo by Scott Bauer

LIVESTOCK AND ANIMAL PRODUCTS

China, and U.S. suppliers have a strong market presence in each. The world’s largest pork importer by volume – Japan – remains a wild card for many exporters, and especially for the United States, as TPP negotiations hang in the balance.

USDA photo

Beef

Beef production has suffered for several years as widespread droughts have reduced available pasture and rangeland – and the 2011 and 2012 droughts in Texas and the southwestern United States hit particularly hard, removing millions of animals from the herd. Ken Mathews, Ph.D., an economist with the USDA’s ERS, said recent rains in Texas and the southern plains have given U.S. ranchers an opportunity to rebuild herds. “These ranchers are trying to rebuild their herds,” he said, “and they’ll be producing calves. But they’ll be sending fewer cows to slaughter, and they’ll also be withholding heifers for breeding, instead of sending them to

Drought conditions and bans on U.S. beef exports in recent years have presented challenges to U.S. beef producers.

the feedlots. So beef production in the short run will decline because of fewer cows and fewer heifers going that route.” It’s more difficult to make longer-term projections for production, Mathews said, because feedlots pull cattle forward: “They’ll put lighter cattle on feed, and either feed them for the same length of time or maybe feed them longer, especially now that corn prices are lower. And when they do that, you can actually wind up with an increase in beef production year over year. I’m not saying that’s what is going to happen, but that potential is certainly there.” According to Borror, it should take about three or four years to see an increase in U.S. beef production. For the time being, high U.S. beef prices and other factors have put a damper

on beef exports, but Borror sees a silver lining: “We’re very high priced against the other major exporters,” she said, “but we are also the dominant grain-fed producer and exporter, and we’re still the biggest beef producer in the world.” U.S. producers export the fourth-largest volume of beef in the world, behind Brazil, India, and Australia – but those leading competitors, Borror pointed out, produce mostly grass-fed beef. The distinction between grass-fed and grain-fed beef, Borror said, is significant in importing countries – especially in Asia, where consumers place a premium on high-value fat-marbled cuts that aren’t as popular in the domestic U.S. market. “Our international customers are buying cuts that are underutilized in the U.S.,” she said, “things like short plate, chuck rolls, inside/outside skirts – cuts you may not have heard of, because they’re not largely consumed here.” W hile international customers consume relatively small amounts of beef, Borror pointed out, premium marbled

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Feed corn. Such corn is a common part of the diet of grain-fed cattle, whose resulting fat-marbled meat is popular with international customers – especially in Asia.

cuts of domestic beef raised in Asia, such as Japanese Wagyu and Korean Hanwoo beef, are about three times more expensive than USDA choice cuts – “so we’re still able to offer that grain-fed marbled beef, which they prefer in Asia, at a relatively affordable price,” she said. Another constraint on beef exports has been the unilateral bans on U.S. exports that began in 2003, when the USDA announced a suspected case of bovine spongiform encephalopathy

WORLD AGRICULTURE OUTLOOK

(BSE or “mad cow disease”) in a single adult Holstein cow in Washington state. More than three dozen countries banned U.S. beef imports as a result, and some countries have been slow to lift those bans. Ecuador and Sri Lanka both lifted their bans for the first time in March 2014, and in June, Hong Kong agreed to accept U.S. beef imports from animals of any age for the first time in 11 years. “It’s going to take a while longer for the U.S. to regain the market share it lost because of the BSE bans,” said Mathews, “especially due to the high prices for U.S. beef in world markets.” Hong Kong is among the markets where USDA economists expect some of the largest growth in U.S. beef exports, along with the rest of China. Northern

Africa and the Middle East are also expected to be growing markets for U.S. beef. While India and Brazil are expected to provide two-thirds of the projected increase in world beef trade, their exports will be primarily lowerpriced beef, headed to low- and middleincome countries. Grain-fed beef imports in higherincome countries are expected to increase after 2014 – a prospect that raises the stakes in ongoing TPP and T-TIP negotiations. USMEF is urging U.S. negotiators to push for sciencebased SPS regulations in the EU market, but based on the outcome of Canada’s recent free trade agreement with the EU (the Comprehensive Economic and Trade Agreement, or CETA), Borror isn’t optimistic.

USDA photo by Lance Cheung

LIVESTOCK AND ANIMAL PRODUCTS

Broiler turkeys at Nick’s Organic Farm in Adamstown, Maryland. The U.S. broiler turkey market is heavily dependent on Mexico, which receives 50 percent of U.S. turkey exports.

“All they did was establish quotas for Canadian beef and pork,” she said. “They did not address their SPS issues. Bans on hormone, beta agonists – these production technology issues remain, and there’s not really a framework dealing with these issues going forward. As an industry, it’s our priority that the U.S. government addresses these critical issues in their talks with the EU.”

USDA photo by Lance Cheung

Poultry

Poultry products are less expensive than beef or pork, and both the USDA and the FAO-OECD project that poultry will overtake pork to become the world’s most consumed meat product within the coming decade. USDA-ERS projects that major importers will

increase their poultry imports by 30 percent, for a total of 10 million tons of annual imports, by 2023. USDA projects that Mexico will have the largest increase in foreign purchases of poultry products over the next 10 years, overtaking Japan as the world’s largest poultry importer. By 2023, Mexico’s poultry imports will have grown by 68.7 percent; other large growth markets for exports will include China (a 44.7 percent increase in poultry imports by 2023), Saudi Arabia (27.4 percent), the European Union (5.4 percent), and Japan (5.1 percent). Economists from both the USDA and the USA Poultry & Egg Export Council (USAPEEC) see the coming decade as one of tremendous growth for U.S. poultry exports. USAPEEC cites several reasons for this, including: • Poultry production demands fewer resources, uses less arable land, and more efficiently converts feed into protein than red meat production. • Consumer income will grow faster in developing countries, where demand for poultry is increasing at the greatest rate. • Overall population numbers are projected to increase at the highest rate in Muslim countries that favor poultry consumption. • Domestic demand for poultry in developing countries is expected to increase more rapidly than domestic poultry production. The United States is the second-largest poultry exporter behind Brazil, which is projected to account for 46 percent of the increase in world poultry exports – though the two aren’t really considered competitors in the broiler market, as they tend to export different products (U.S. exports are mostly frozen leg quarters, while Brazil exports more expensive

products such as boneless breast meat). Brazil dominates the poultry export market in both Japan and the EU, which has banned U.S. poultry since 1997 due to the use of chlorinated water as a disinfectant. Russia, which has historically been an important destination for broiler products, had already decreased its imports significantly – nearly 23 percent lower than the previous year – by the time the August ban was announced. David Harvey, an economist with USDA-ERS, said the ban hurt U.S. producers – but not as much as it might have earlier. “Exports to Russia have been declining over the last several years,” he said. “If this ban had happened five or six years ago, it would have had a really big impact – but if you look at 2013, our exports to Russia were about 71/2 percent of our total exports. And considering that we’ll be able to find some additional markets for the product, it’s probably not going to have a huge impact.” Harvey said Asia will remain an intensely competitive market over the next decade, with Brazil probably remaining dominant and China capitalizing on its cheaper labor costs to gain market share. But increased U.S. production, spurred by declining feed prices, promises to boost U.S. exports and meet demand among the world’s fastest-growing import markets – especially in the Middle East and Mexico, the nation that will become the world’s leading poultry importer over the next decade. “The biggest importer of American poultr y is Mexico,” Har vey said. “We export a lot of broiler products to Mexico – and the turkey market really depends on Mexican shipments; it receives 50 percent of U.S. turkey exports. The last couple years the market there has been expanding pretty well.” The ERS projects that Mexico’s poultry imports will nearly double from 2012-2023, from 776,000 to 1.41 million tons annually – making Mexico a good neighbor to have for the next decade, no matter what kind of animal product you’re bringing to market.

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mckinney interview

Q&A Ted McKinney, Director, Indiana State Department of Agriculture Ted McKinney was sworn in as director of the Indiana State Department of Agriculture (ISDA) on Jan. 7, 2014, by Gov. Mike Pence.

i t h m o re t h a n 25 ye a rs of agriculture leadership experience, McKinney brings an extensive knowledge and understanding of Indiana and global

agriculture to ISDA. Prior to joining ISDA, he was director of Global Corporate Affairs for Elanco Animal Health, a subsidiary of Eli Lilly and Company.

World Agriculture Outlook: How big a part of the state’s economy is agriculture? And how much of that is exports? Ted McKinney: Since Indiana’s early years, agriculture has played an important role in Indiana’s economic development and cultural identity. Agriculture and its related businesses have grown to be a vital part of the state’s economy. Agriculture generates $25.4 billion towards Indiana’s GDP, contributes to more than 475,000 jobs, and exported over $4.7 billion in agricultural products.

How does Indiana compare to other states in terms of agricultural production? Indiana is a national and global leader in agriculture. The state is a top 10 agricultural exporter in the nation. Domestically, we ranked first in duck production and wood/lumber production. Indiana is also ranked first in the nation in popcorn production and second in ice cream production. Other rankings for Indiana include second in tomato processing and mint; third in chicken; fourth in soybeans, egg production, peppermint, and cantaloupe; fifth in corn and pork; and sixth in turkeys and watermelon.

What are Indiana’s top export commodities? Nicknamed “The Crossroads of America,” Indiana is geographically located in the heartland of the United States, which gives the state the ability to distribute goods throughout the world effectively and efficiently. With the assistance of Indiana’s world-class transportation and logistics systems, we are able to export a wide range of agricultural products to all corners of the globe. Some of Indiana’s top exports include soybeans, corn, pork, feed and fodder, and grain products.

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How has agriculture evolved in Indiana in terms of percentage of the population involved in agriculture? Or in terms of acreage dedicated to crops/livestock? Over the years, Indiana has seen a subtle decrease in younger farmers and an increased number of our older farmers. We recognize that the decrease in younger farmers is an issue, but Indiana is not alone in this. Nationally, we are seeing [fewer] young people go

to work on the farm, and instead find jobs in metropolitan areas. But there is potential for change. To star t, we look to the F FA . Indiana is proud to be the home of the National FFA headquarters and also of the large number of FFA members we have in the state. Within Indiana, we’re anticipating to have over 11,000 members, maybe even 12,000, this year, which would be another recordbreaking year for Indiana FFA. Some of the largest growing chapters are located in urban areas around the state. With record growth in Indiana FFA, especially in urban areas, we’re look ing to reconnect the younger population to agriculture. With an average farm size of about 245 acres, farms and forests make up 19.4 million acres in Indiana, which is roughly 83 percent of the total land area in Indiana dedicated to agriculture. Indiana has the jobs and land for our next generation to begin successful careers. The demand is only going to increase – especially as the world’s population grows from 7 to 9 billion people by 2050. The demand for quality products produced in Indiana is real.

mckinney interview

USDA photo by Ken Hammond

How does the ISDA facilitate communications between internationa l buyers and Indiana suppliers? The Indiana State Department of Agriculture recently returned from an international trade mission in Asia. The trade mission consisted of 24 members, ranging from agricultural business leaders, commodity representatives, and educators to governmental officials and public affairs personnel. We visited Japan, South Korea, and Taiwan, and met with prospective importers of Indiana goods, government officials, commodity trade groups, trade associations, and research universities. This mission was designed to assist Hoosier agricultural businesses with entering and expanding export sales in Asian markets. The mission was a tremendous success. The entire delegation established trusted relationships with inf luential foreign officials and business executives. We’re already planning our next mission, which will take place in 2015. To remain in constant contact with our friends and partners abroad, ISDA has an international affairs program manager, who is communicating daily with those outside the U.S. ISDA also works very closely with another agency, the Indiana Economic Development Cor porat ion, wh ich helps w it h connecting international prospects with Indiana businesses. What type of resources does your office offer local producers? Unlike other state agricultural agencies throughout the nation, ISDA is not a regulatory agency, but rather an advocacy agency. We offer a variety of programs for Hoosier producers, such as the Certified Livestock Producer Program, and an upcoming revamp of the Indiana Grown program. The Certified Livestock Producer Program was founded in 2008 in order to recognize livestock producers who go above and beyond in their practices on the farm. In order to be considered a Certified Livestock Producer, applicants must meet certain standards, which

Nicknamed ‘The Crossroads of America,’ Indiana is “geographically located in the heartland of the United States, which gives the state the ability to distribute goods throughout the world effectively and efficiently.

”

include animal care, environmental stewardship, security, emergency planning, and community relations. Members are recognized as being some of the highestquality producers in Indiana. We also are in the process of revamping the current Indiana Grown program. The Indiana Grown program was created to brand and promote Indiana produce and production, with the goal for consumers to f ind and purchase Indiana grown products. This program is a high priority for ISDA. Indiana consumers have expressed a desire for locally produced foods, and we hope to meet those needs by providing new market opportunities for Hoosier growers. In several instances, consumers are willing to pay a premium for Hoosier products – especially in other states. From high-tech and low-tech operations, we see the Indiana Grown program as a valuable asset to Hoosier producers and consumers. We also provide a variety of grants to help further the advancement of Indiana agriculture. Some of our more popular grants include specialty crop block grants, livestock promotion grants, youth education grants, and also water quality improvement grants. Can you highlight a program or two in place to assist companies with international marketing efforts? The State of Indiana Department of Agriculture offers companies a number of resources to assist in their growth, both nationally and internationally. ISDA’s export consulting services assist companies in identifying potential buyers and new international markets and find partners for joint ventures and strategic alliances. Indiana is a member of the Food Export Association of the Midwest. Food Export offers a variety of programs and services to help exporters of

Midwestern and Northeastern food and agricultural products begin or expand their international sales. Our services that assist U.S. exporters include exporter education, market entry, and market promotion. On Oct. 29-30, 2014, the Indiana State Department of Agriculture will host, along with Food Export-Midwest, an export seminar to educate both the beginner and seasoned exporters at Purdue University. This event will be attended by Indiana agribusinesses [that] wish to explore the export markets. In addition to the training programs, ISDA participates in a variety of trade shows featuring potential markets for Indiana products. The U.S. departments of Agriculture and Commerce have a range of services to assist international buyers in locating American suppliers and sourcing products. Indiana partners with these federal agencies to help build markets for U.S. products around the world. What are you doing that differs from other states? At ISDA, we’re constantly on the road touring Indiana and other states as well. We have a tremendous staff working throughout Indiana in the f ields to help provide insight to beneficial farm practices. Such practices include no-till farming, cover crops, and the importance of water quality. In Indiana, we have a unique relationship with a variety of local, state, and federal agencies that are not found in other states. Because of this strong bond between partnering agencies, trade associations, and commodity groups, we’re able to make Indiana more of an agricultural beacon for the entire nation. Not only is ISDA active in Indiana, but also in other states. You can expect to see and hear more from Hoosier agriculture in a variety of events outside the borders of Indiana.

WORLD AGRICULTURE OUTLOOK

Crop Commodities

market outlook: Crop Commodities By J.R. Wilson

The overseas market for U.S. crop commodities has grown substantially in the opening years of the 21st century, in large part due to the increasing size of the global middle class and a rising demand for high value products (HVPs) of consistent quality, quantity, and reliable availability. Those are attributes the U.S. Department of Agriculture (USDA) says are best met by the United States across the full spectrum of food grains, fruits, and nuts, as well as feed grains and oil crops. “The combination of world economic growth, a continued low-valued dollar and some further expansion of global biofuels production supports longer run gains in world consumption and trade of crops. Prices are projected to fall from recent record highs, but remain above pre-2007

WORLD AGRICULTURE OUTLOOK

levels for many crops,” according to a recent assessment by USDA’s Economic Research Service (ERS). U. S . p ol ic y on c om mo d it ie s underwent major changes in the 2014 Farm Act, which ended some two decades of f ixed annual payments

to producers based on histor ical production. Those were replaced by a variety of payment structures, commodity coverage, and level of yield or revenue risk, but all tied to annual or multi-year fluctuations in prices, yields, or revenues.

Crop Commodities

Photo by James Watkins

A field of wheat in Kansas. The increasing size of the global middle class has provided a growing overseas market for U.S. crop commodities.

“The new Farm Act continues a movement toward closer links between commodity programs and federal crop insurance that began with the 2008 Farm Act, but producers also face increased choices that add complexity to the program enrollment decision,” the USDA reported. “Farmers have a variety of approaches to managing risk, including savings, off-farm employment, forward contracting and portfolio diversification. “Insurance programs introduced in the Farm Act offer new options for covering small revenue or yield losses, both as stand-alone policies and in combination with traditional insurance. Choices among new commodity and insurance programs involve complex trade-of fs requiring producers to consider both the type and level of coverage that will best protect their operations.”

Some crops that once were imported into the United States have morphed i nto g row ing – a nd somet i mes substantial – exports, such as roughrice, where the U.S. global market share through the next decade is forecast at about 8 percent, primarily from exports to Latin America. Others, such as sugar, have suffered from low world market prices, reduced demand in some major consuming nations, and signif icant competition, especially from Mexico. Sales of horticultural crops (fruits, nuts, berries) are expected to grow at an annual rate of about 1.2 percent through 2023 – reaching $74 billion in 10 years – but only 0.2 percent for vegetables and pulses (grain legumes, including chickpeas, dry beans, dry peas, and lentils). Within that sector, non-citrus production growth is expected to continue, more than offsetting declines in citrus.

The U.S. trade deficit in horticultural crops and products is forecast by USDA to nearly double by FY 23, to $23.1 billion, even as overall foreign crop sales continue to set record highs. That is in no small part due to domestic demand. The most recent Census of Agriculture placed the farm value of organic sales up more than 90 percent between 2007 and 2012 – to $3.12 billion – but still accounting for only 0.8 percent of the total value of U.S. agricultural production. Tracked organic export products are mostly fresh fruits and vegetables, with apples, lettuce, and grapes accounting for more than half the total in 2013. “ERS analysis of national corn and soybean survey data found that total production costs were substantially higher per acre for organic corn and soybean operations than for their conventional counterparts. However, organic operations were more profitable than conventional operations, mainly because the price premiums paid for organic corn and soybeans outweighed their higher production costs,” the research service reported. “The low level of organic system adoption for these crops may include challenges other than prof itability, such as the high managerial costs and risks associated with shifting to a new way of farming, limited marketing and technical infrastructure and the 3-year organic transition period required to become certified and receive organic prices.” The 2014 Farm Act prov ided continued funding to USDA support for organic research, financial assistance for conservation practices, certification cost-share assistance, and data collection toward a goal set several years ago of increasing the number of U.S. organic operations by 25 percent between 2009 and 2015. USDA, which implemented

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USDA photo

Crop Commodities

national organic standards in 2002, also received expanded funding for its National Organic Program, which regulates organic standards, labeling, and certification. Only grains and feeds outrank oilseed in total export volume and value. However, despite substantial growth in both production and export sales in the past quarter century, the U.S. market share of global oilseed exports has seen a steady decline, from a global domination of more than 70 percent in the 1970s to less than 50 percent today. While a number of factors are involved, the chief development has been unexpectedly high soybean production and exports by other nations, especially Brazil and Argentina, which have gone from less than 15 percent of the market before 1980 to more than half today. USDA also attributes much of that change to major growth in U.S. meat exports, which have increased domestic demand for soybean use in livestock feed over exports. Nonetheless, soybean exports are expected to continue growing through the mid-2020s; the United States is the

Organically grown corn. Though production costs of organic corn are higher, the crops’ higher selling price outweighs the production outlays. Still, the USDA earned continued funding through the 2014 Farm Act to support its efforts to increase U.S. organic operations.

world’s leading producer and exporter of soybeans, which comprise about 90 percent of U.S. oilseed production (followed by peanuts, sunflower seeds, canola, and flax). Although large-scale soybean production in the United States did not begin until the 20th century, it is now second only to corn as the mostplanted field crop. “Countries that have traditionally exported a large quantity and a wide range of agr icultural products – such as Argentina, Australia, Brazil, Canada, the European Union (EU) and the United States – are expected to remain important exporters during the coming decade. But countries that have made significant investments in their agricultural sectors and are pursuing

pol ic ies i ntended to encou r age agricultural production – including Russia, Ukraine and Kazakhstan – are expected to have an increasing presence i n ex por t ma rket s for agricultural commodities,” according to an ERS forecast for agricultural trade through 2023. “A major cha l lenge for U. S. agriculture is weather, especially the drought, which affects the volume of exports as well as prices,” noted Christian Foster, deputy administrator of trade programs at USDA’s Foreign Ag r icultural Ser v ice ( FA S). “A n important thing for U.S. exporters, if they have a short crop one year, is to hold on to their customers, so they work those relationships, so [that] if there is a shortfall in production those buyers don’t disappear.” Bad weather elsewhere in the world, however, may work to the advantage of U.S. producers, he added: “A nation may have climate problems that turn them from an exporter into an importer in some areas.” ERS predicts global demand for agricultural products will continue rising

WORLD AGRICULTURE OUTLOOK

Nyttend/Wikimedia Commons

Crop Commodities

through 2023, while world production, enhanced by greater use of advanced technologies and expanding land use for agriculture, is projected to increase more rapidly than world population, enabling a small increase in average world per capita use of most agricultural products. World trade in agricultural products also is forecast to continue rising rapidly, and while most prices have fallen from recent high levels – and are projected to fall further during the initial years of the ERS’ 10-year forecast – they are not expected to drop below pre-2007 levels. Again, that is largely due to an expected continuation of rising per capita incomes and growing middleclass income populations in developing countries, further stimulating world demand for grains, oilseeds, cotton, and livestock products. But the forecast is full of caveats. “A number of factors are expected to slow the rate of production growth. Many countries have a limited ability to expand planted area – and the ex pansion t hat does occur ta kes place on land with lower productive

WORLD AGRICULTURE OUTLOOK

A soybean field and farm in Ohio. The United States remains the world’s largest producer and exporter of soybeans.

capacity. The growth rate for world average crop yields has been slowing for nearly two decades and is projected to slow further in the next 10 years,” the ERS warned. “ Reduced publ ic f u nd i ng for research and development over the last 25 years contributed to this slowdown. A lso, water const ra ints in some countries are impeding the expansion of irrigation. Where irrigation water is pumped from deep wells, the energy cost of pumping is projected to continue to increase due to falling water tables. Costs of other production inputs, such as fertilizers and chemicals, are also likely to remain high.” Other concerns facing U.S. farmers are largely political in nature: trade restrictions; opposition to genetically modif ied organisms (GMOs); laws

promoting local or regional products (usually through tariffs on imports from other nations); wars, revolutions, insurgencies disrupting free trade; and more. The issue of GMOs, generally lumped into a “food modification” bundle with antibiotics, hormones, pesticides, and other chemicals and processes used to enhance size, coloring, pest resistance, storage longevity, etc., have been significant within the United States, as well. That has been a major reason for the recent increase in small, organic “farms” (some no larger than a small greenhouse) selling to local restaurants and food stores. Some have been so successful that they are now seeking export outlets, as well. “U.S. exports of products such as soybeans, corn, and cotton – which have the largest percentage of production that is GMO – as well as antibiotics and hormones people may worry about in buying any livestock product, have become a challenge in the marketplace. Anything we eat domestically we consider safe, which also applies to exports. Importing countries may not see things

USDA photo

Crop Commodities

the same way, usually not based on science but on local politics,” Foster said. “In fact, some countries produce GMO products domestically, but won’t import them. Others may import some items humans don’t eat directly [such as corn or soybeans used to feed livestock]. The use of GMOs in corn, soybean, and cotton production here is very large and so has increased their market value; you have to believe others eventually will incorporate that technology, as well.” U.S.-imposed trade restrictions, including embargoes, also raise roadblocks – but commodities exporters have found legal ways around many of those. “In some cases, we are free to trade with countries so long as we don’t use U.S. government support,” Foster explained. “For example, there are restrictions on U.S. exports to Cuba, so our trade associations cannot use government funding to support exports there. “But those sanctions don’t apply to every producer or exporter. Many state trade associations have been making a lot of trips to Cuba in recent years, where there has been strong growth in imported corn and soybeans that go to Cuban livestock production to meet the ever-growing demand of their middle class for meat products.” For the first three quarters of FY 14, U.S. exports of corn tripled from the same period the previous fiscal year, with dramatic increases to all 10 top

Grain sorghum is harvested in Navasota, Texas. China, the No. 1 importer of U.S. agricultural commodities, has begun to import sorghum.

markets – Japan, Mexico, South Korea, Colombia, Egypt, China, Taiwan, the EU, Peru, and Saudi Arabia, in descending order of volume. Soybean exports were up by about one-third, distributed across nine of the top 10 markets – China, the EU, Mexico, Indonesia, Japan, Taiwan, South Korea, Vietnam, and Thailand, with only Egypt (ninth in gross volume) showing a decline. Unmilled wheat showed a slight overall decline, despite significant increases to leading importer Brazil and eighth-place Indonesia. Efforts by traditional importing nations to create or grow their own crop and livestock production, primarily for domestic use, also have affected the market – and, in some cases, changed its nature for U.S. exporters. “Even as those nations work to increase domestic production, that doesn’t mean they will stop being importers. Most important, historically, our main exports were bulk commodities, but as emerging markets started to take off and middle incomes rise, demand for horticultural products began to grow,” Foster said.

“Currency exchange rates and inflation also will affect demand. And if there is a scare regarding domestic products – such as China had a few years ago regarding baby foods – they tend to turn to us. Seasonality also drives agriculture – when our products are in season, demand is greater, but when the season ends here on things like oranges, we start importing from places like Chile and Australia.” T he biggest market for U. S. agricultural commodities is China, with its huge population, growing middle class, and new openness to foreign goods. “The No. 1 importer is China, then Canada and Mexico. The EU is a major market for U.S. exports – despite some trade conflicts – as are emerging markets, especially Asia, from Vietnam to the Philippines, and Latin America. Wherever we have established free trade agreements, such as with South Korea and Central America, all kinds of artificial barriers disappear and it is easier for U.S. products to get into those nations,” Foster said. “China is desperate to improve meat production, so we sell them record amounts of soybeans, which they need – but don’t have domestically – to feed their livestock. “Even if China starts exporting some niche products, I doubt our surplus will go away anytime in the near- to mid-term. And if we didn’t have trade barriers, we would grow bigger and

WORLD AGRICULTURE OUTLOOK

faster, even though they are our biggest trading partner already. The economy and demographic and environmental challenges all affect China’s growth. Will the nation and its middle class continue to grow is a question, and if they don’t liberalize on the political side, will that have implications? Globally, the same is true.” Noting China has become a sustained net importer of corn, rice, wheat, and rapeseed meal and oil, long-term USDA projections expect those to continue increasing for all but rice and wheat through 2023. China also has become an importer of sorghum, which is expected to continue through the forecast period. For at least the past decade, China has been a net importer of such commodities as cotton, soybeans, soybean oil, barley, and palm oil, which are projected to continue rising. Overall, China’s aggregate net imports of grains, oilseeds, and cotton are projected to rise 61 percent (58 million tons) by 2023. Mexico is projected to be another large growth market for imported grains and oilseeds. Per capita demand for meat in Mexico is expected to see sustained growth through 2023, further increasing demand for animal feed imports. During that period, Mexico is forecast to be

WORLD AGRICULTURE OUTLOOK

Rice harvest in Rosharon, Texas. The U.S. share of the global market is forecast at 8 percent through the next decade.

second only to China in increased corn imports. “Globa l ex pansion of biofuel production is projected to continue during the next decade, although at a slower pace than over the last half decade. As a result, demand for biofuel feedstocks also continues to grow. The largest biofuels producers include the United States, Brazil, the EU, and Argentina. The growth rates for their production of ethanol and biodiesel each drop to less than 3 percent per year. For ethanol, this is less than half the rate of the last 5 years; for biodiesel, it is only about 10 percent of the growth over the past half-decade.” The global market in coarse grain, with corn expected to become a growing part of that trade, is projected to increase by 36 million tons (25 percent) from 2014-15 to 2023-24, driven by expanded livestock production in feed-def icit markets, such as China, Mexico, Africa, and the Middle East. However, while U.S.

corn exports are expected to rebound from recent years of weather-induced production shortfalls, the U.S. share of world trade in that grain – forecast to reach 57 million tons by 2023-24 – is only expected to reach 40 percent, well below the 52 percent average share during the previous 10 years. While not as large, the barley market also is expected to expand, reaching 23.3 million tons by 2023-24, in large part due to demand for both malting and feed barley. During that time, North African and Middle Eastern imports are projected to account for nearly two-thirds of all global trade, with Saudi Arabia continuing to lead all importers (40 percent in 2023-24), primarily for livestock feed, but with Iran showing the fastest growth rate. China is the world’s largest single-nation malting-barley importer, driven by strong growth in beer demand – although most imports come from Australia and Canada, and domestic Chinese malting-barley production is growing. The EU, Australia, Argentina, Russia, and Ukraine are expected to be the major barley exporters during the coming decade. The United States, Australia, EU, Argentina, and Canada are projected

USDA photo

Crop Commodities

USDA photo

Crop Commodities

to remain the world’s leading wheat exporters, with more than 60 percent of world trade in 2023-24. However, that will be down almost 70 percent from the last decade, primarily due to increased exports from the nations of the former Soviet Union. “Developing countries will have a growing role in the global economy and food demand. They will continue to account for most of the growth in world food consumption and in world and U.S. agricultural exports,” according to USDA projections for the next 10 years. “While these trends will create new opportunities for the United States to expand agricultural exports, they also present new challenges to U.S. exporters. Instead of a limited number of large importing countries, the global market now includes more numerous countries with smaller import needs. Responding to these needs will require new marketing strategies by U.S. and other exporters.” High commodity prices in 2013 resulted in record U.S. agricultural exports and net farm income.

Barley harvest in Washington’s Palouse Hills. The market for barley is expected to expand to 23.3 million tons by 2023-24.

“Projected reductions in prices for most major crops over the next several years result in declines in export values and farm cash receipts through 2016,” the ERS report predicted. “Export values and cash receipts then grow over the rest of the projection period as prices increase. Although farm production expenses also increase beyond 2015, net farm income remains historically high.” Those numbers could increase dramatically in the future as a result of FAS trade negotiators working on two major agreements, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (T-TIP). “FAS experts are an integral part of the negotiating team led by the Office of the U.S. Trade Representative, and

USDA’s economic analysis underpins the negotiating strategy on agriculture,” FAS Administrator Phil Karsting told the House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies in April 2014. “The TPP and T-TIP are opportunities to address not only market access commitments, but also non-tariff, sanitary and phytosanitary (SPS), and technical barriers to trade (TBT) that impede our agricultural exports. “Once these agreements are in place, the United States will enjoy unfettered access to markets representing two-thirds of the global economy. We are seeking to eliminate [EU] tariffs on exports of U.S agricultural products … T-TIP also offers an historic opportunity to modernize trade rules and to bridge divergences in our respective regulatory and standards systems. Through the T-TIP, we are seeking meaningful market access that includes commitments from the EU to base SPS measures on international standards and scientific risk assessments.”

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Weighing up Farms for the Future With the constant push for efficiency and enhanced profitability, farmers across the world are looking for highly accurate weighing solutions to ensure they are optimising both their raw materials and farm yields according to Billy Folkerts, Avery Weigh-Tronix Agricultural Product Manager. Weighing is crucial for controlling costs in virtually all aspects of farming. Grain, livestock and other produce is weighed out of the farm and all inputs such as fertilizer, seed and animal feeds are weighed in. Farms of the future are increasingly demanding a solution to weighing that crosses multiple applications and acts as a central hub for farm data management. For example, there is no reason why the quantity and cost of fertiliser and seed, should not be linked to the value of yields in order to track both inventory and margins. In the dairy sector, where feed costs are such a big part of overall costs, weighing of individual ingredients can be used to manage total feed costs and enable better purchase planning. Without this basic weight data, inventory and yield management can become very inaccurate and may hide the real cost and margins achieved. This shift has prompted some of the world’s largest food manufacturers to change the way they source their ingredients and has encouraged a move to having more control over raw material production. One company doing just that is Nestlé. Avery Weigh-Tronix is working in partnership with the prestigious Nestlé Dairy Farming Institute in China. This dairy training centre, offering training courses from national and international experts in the dairy industry, is focused on achieving the very best from China’s rapidly accelerating dairy sector. The precision and accuracy required to ensure dairy cows are receiving the right nutritional balance in their feed is crucial for producing milk of the quality and consistency that Nestlé and other major dairy companies demand. Avery Weigh-Tronix’s TMR solution enables the institute to manage their farm efficiently and ensure their cows are consistently receiving the highest quality feed. Since accuracy in feeding high yielding dairy cows can significantly affect milk constituents such as protein and fat, there is a direct link between achieving accuracy on the farm and achieving the supply of milk of the right quality to the dairy processor.

The same can be noted for arable farmers who can also reap the benefits from highly accurate weighing. By monitoring yield data and hybrid performance whilst also tracking truck loading and delivery, Avery Weigh-Tronix solutions can turn grain chasers into a powerful data source and risk management tool. Knowing the accuracy of yield data can help to forecast crop revenue and field potential, along with providing protection for insurance claims. Avery Weigh-Tronix also utilises ISOBUS technology, providing compatibility amongst a variety of machinery types. This accurate data can be collated from across the farm into one simple PC package for data reporting. Data can also be accessed on the move with the Avery WeighTronix iForeman application for tablets and smartphones. For more information about how Avery Weigh-Tronix can improve your farm weight data contact us on +44 (0) 845 307 0321 or visit www.agscales.com

staples interview

Q&A Todd Staples, Texas Commissioner of Agriculture Todd Staples recently announced he would be retiring as the 11th Texas commissioner of agriculture after two terms in the statewide elected office. As leader of the Texas Department of Agriculture, Staples has been diligent in his efforts to support private-sector job creation and economic development across the Lone Star State; improve consumer protection from the grocery store to the gas pump; lead true eminent domain reform in Texas; and play an enormous role in continuing to improve the healthy lifestyles of young Texans.

e is also focused on the promotion of agricultural products and businesses using the GO TEXAN marketing program, and has expanded trade opportunities for Texas producers. Staples was born in

Anderson County, where he was active in high school FFA and was elected state FFA vice president. He attended Texas A&M University, where he graduated with honors with a degree in agricultural economics.

World Agriculture Outlook: How big a part of the state’s economy is agriculture? And how much of that is exports? Todd Staples: The Texas agriculture industry is a powerhouse of activity that generates a $100 billion annual economic impact, or 9 percent of the total gross state product. During 2013, Texas agricultural and related exports totaled $13.7 billion.

How does Texas compare to other states in terms of agricultural production? The Lone Star State is the nation’s top cattle, cotton, hay, sheep, wool, mohair, and goat producing state. Additionally, Texas is a top 10 producer for other commodities, including grain sorghum, eggs, broilers, rice, wheat, pecans, peanuts, chili peppers, and more. Texas has more farms and ranches covering more land than any other state. Texas also leads the nation in the number of women and minority farm and ranch operators. Of particular note, Texas leads the nation in value-added agriculture products.

What are Texas’s top export commodities? Wheat, cotton, beef, poultry meat, and dairy products are the top agricultural commodities exported by Texas. Together, these five products account for 42 percent of the state’s total exports.

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How has agriculture evolved in Texas in terms of percentage

of the population involved in agriculture? In 1907, when the Texas Department of Agriculture (TDA) was established, Texas was home to 418,000 farms and ranches. In 2013, there were 248,500 farms and ranches across the state. Despite that decline, one out of every seven working Texans today is employed in a job dependent on agriculture. What is the breakdown of acreage within the state dedicated to crops and livestock? Of the 130.2 million acres of farm and ranch land, 29 million, or 22 percent, is devoted to crop production, and the remainder, 101.2 million acres, or 78 percent, is pasture and woodland.

staples interview

How do e s T DA f a c i l it at e communications between international buyers and Texas suppliers? TDA hosts outbound and inbound trade missions where Texans travel to another country and international visitors come to Texas. Missions like this are often organized in conjunction with trade associations. TDA also hosts product fairs for international buyers to sample products and meet local producers. In addition, TDA works with organizations like the Houston Livestock Show and Rodeo and the Beefmaster Breeders United to share information with international visitors attending their events.

Texas has more farms and ranches covering more “land than any other state. Texas also leads the nation in the number of women and minority farm and ranch operators.

”

Texas Department of Agriculture photos by George Brainard

What type of resources does your office offer local producers? TDA provides a wide array of resources for local producers, including: • GO TEXAN Marketing Program; • Young Farmer Grants; • Specialty crop grants to help producers diversify operations; • Partnerships with other state agencies to aid in natural disasters like wildfires and hurricanes; • Crop protection programs, such as those for citrus and cotton, to reduce damage from harmful pests and disease; • Pesticide applicator training and certification; and • Scale inspections to ensure producers receive fair measurements of products. Can you highlight a program or two in place to assist companies with international marketing efforts? T DA works w ith the Southern United States Trade A ssociat ion to provide international marketing infor mat ion to Texas compan ies through workshops and consultations. TDA also works with United States Livestock Genetics Export, Inc., to provide similar services for livestock producers. Another great resource is the State Trade and Export Promotion [STEP] program, a Small Business Administration initiative

that provides assistance to companies wishing to trade in specif ic countries.

to the needs of our communities, farmers, and ranchers.

What are you doing that differs from other states? We like to say, “It’s not bragging if it’s true.” Here in Texas we are a powerhouse of production, topping the list in many agriculture commodities. We are No. 1 in so many ag industries because of our people. Our farmers and ranchers are dedicated to producing the best products in the world. TDA is proud to serve the state of Texas the best we can by listening

Is there anything else you’d like to add? Thank you for taking the time to highlight Texas agriculture in World Agriculture Outlook. Ultimately, TDA’s goal is to partner with all Texans to continue our state’s role as a national and global leader in agr iculture, fortify our economy, empower rural communities, and promote healthy lifestyles.

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made in the u.s.a.

MADE IN THE U.S.A. By Craig Collins

According to Warren Cohen, director of international sales for Blue Diamond’s Global Ingredients Division, this California pocket grows 84 percent of the world’s almonds. Some 70 percent of the California crop is exported, destined for more than 90 countries around the world. “The official estimate for the 2014 almond crop is 2.1 billion pounds from the state of California,” Cohen said. “And it’s not enough.” It wasn’t always this way: In 1910, when 10 growers founded Blue Diamond as the California Almond Growers Exchange, the state produced 5 million pounds of almonds. It took a few decades, but the organization eventually realized American almonds had the potential to overtake markets abroad, even in the parts of the world – the Middle East and South Asia – where the almond tree originated. “While the domestic market was g row ing,” Cohen said, “we saw increased demand coming from Europe and from Asia. A lot of countries overseas have been using almonds much longer than we’ve ever used them. In the Middle East, it’s a traditional part of the diet. They snack on almonds and use them in baklava and other pastries, and almonds are consumed during Ramadan. In India, it’s a gift during weddings, it’s a gift during Diwali New Year, and many Indian families give

WORLD AGRICULTURE OUTLOOK

Above: An almond orchard in bloom. Opposite page: Young almond fruit.

their kids almonds every morning before they go to school, because they believe it’s brain food. A lot of these markets have always understood – long before

we did – that almonds are healthy and nutritious.” Japan, India, and China were among the first foreign markets the company entered, in the 1960s and 1970s. At first, California almond growers relied almost solely on the quality of their product to generate sales – but in the 1980s, Blue Diamond began a two-way process of adaptation: offering the almond in different varieties, flavors, and forms to

Photo courtesy of Blue Diamond Growers

It may be that no American company illustrates the globalization of U.S. agriculture better than Blue Diamond Growers®, the cooperative and marketing organization that represents 3,500 – about half – of the almond growers in the state of California. That’s a lot to represent: The nuts aren’t grown anywhere else in North America outside a narrow strip of Central Valley land, 550 miles long, from Chico to Bakersfield.

Wikimedia Commons

made in the u.s.a.

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accommodate regional preferences and customs, and also creating new markets by teaching consumers about the different ways almonds might be used. When the company opened its first office in Japan in the late 1960s, Cohen said, “We organized a cooking school for Japanese housewives, showing them how to cook with almonds. So they started making pastries, borrowing from European and U.S. recipes to use almonds in a lot of bakery products. That grew tremendously over the ’80s and ’90s. Each market sort of has its own unique story.” In recent decades, Blue Diamond has been working to penetrate confectionery markets in both Europe and Asia. “In the ’80s, Japan became very interested in chocolate,” Cohen said, “and so we introduced the idea of using almonds with chocolate. As a result, you have the largest chocolate companies now in Japan – Lotte, Meiji, and Glico – all selling chocolate-covered almonds. So we’ve taken applications we’ve used in other markets and introduced them in other areas.” Meeting Market Demands – Anywhere, Anytime

The fact that American growers could so dominate a market, raising

WORLD AGRICULTURE OUTLOOK

Left: Blue Diamond’s then-President Glenn W. Stalker plants a “friendship” almond tree in Japan. Above: A Japanese child enjoys Blue Diamond almonds at a Tokyo Trade Fair. Right: Blue Diamond Growers opened and developed Asian markets for California almonds, including Japan, Taiwan, China, Thailand, and South Korea, as the above can with a Korean label for Blue Diamond almonds attests.

a nut that thrives within a narrow microclimate occupying a sliver of the continent about 7,000 miles from the almond’s traditional home, isn’t really surprising: The United States has the most innovative and productive agricultural system in the world, and its reputation is its primary selling point. John Belmont, communications manager for the State Regional Trade Groups (SRTGs) Food Export-Midwest and Food Export-Northeast, put it simply: “People like U.S. food products because of the high quality. There’s a lot of consistency. If you order a container of products this month, you’re going to get the same thing in three or four months. The food safety regulations in

this country, also, are not matched by other countries. Those are key factors behind the worldwide demand for U.S. food products.” But quality, consistency, and safety aren’t the only factors. American producers, quite simply, give overseas customers exactly what they want, even as preferences change. They do this in several ways: They apply considerable resources and technologies to learn about and accommodate economies, cultures, and palates overseas. In her long and distinguished career in product development, Kantha Shelke, Ph.D., a spokesperson for the Institute of Food Technologists and principal at Corvus Blue LLC, a consumer packaged goods consultant, has used her chemistry background to help numerous companies establish and maintain a presence overseas. She’s participated f irsthand in the efforts to reach – and hang on to – foreign customers. “When an American manufacturer creates a food product,” she said, “they create it in a very modular manner. First of all, they have a very good plan. They take a concept and break it down into bits and pieces: ‘Here is our goal. Here is what the product is going to do, or what it’s going to look like to the consumer.

Photos courtesy of Blue Diamond Growers

made in the u.s.a.

Photos courtesy of Blue Diamond Growers

made in the u.s.a.

Here are the ingredient components. And here’s the message.’” That plan includes intensive research into the desires of consumers – which are sometimes confounding to American manufacturers. Many Asian consumers, for example – including Shelke herself, who is originally from India – don’t like sweets for breakfast. “I still can’t imagine eating a donut for breakfast,” she said. “For companies that make cereal or nutrition bars – which are increasingly popular in Asia, where people are beginning to eat like Americans – they have to make some adjustments. These raisin clusters and other ingredients have to be made less sweet.” In China, the overseas market with the fastest-growing consumer class, market research is often hit or miss. Shelke was an early collaborator with the almond industry, working with the Almond Board of California to move a bumper crop of almonds into the country. As it turned out, one of the most popular almond preparations in America – the hickory-smoked almond – fell flat in China. “Hickory smoke, to most Chinese – especially those coming from rural areas into urban areas – is something you would encounter because you couldn’t afford better fuel.

Above: Almond sellers in Lahore, Pakistan. Right: Almond orchard in bloom.

Why now would you pay a premium price for a nut that smells of wood smoke?” The A lmond Board challenged several young chefs, students at culinary colleges, to formulate products for Chinese consumers. One of the winners, still popular today, said Shelke, is a product that probably wouldn’t go over well in the United States: a small vacuum pack that consumers peel open to reveal almonds coated in a paste of green chilies and garlic. Such tailored products have helped the California industry increase almond exports to China more than tenfold over the last decade, from about 22 million pounds in 2002 to more than 240 million pounds annually today. Another obvious advantage enjoyed by U.S. consumers is the technical capability to alter a product – the most obvious stumbling block for processed American foods, Shelke pointed out, is the inclusion of genetically modified

organism (GMO) ingredients, which are banned throughout the European Union (EU). While the easy solution might seem to be to reach out to European producers and manufacturers, she said, it’s often not that simple. “Many American companies insist on making their products here and shipping them to the EU,” she said, “because either they don’t have the manufacturing capability in Europe, or they’re afraid the product will be knocked off very quickly. The only way for some to keep a competitive advantage is to produce it in the United States, where intellectual properties are respected. So they make it here, and they source [non-GMO] ingredients separately.” The bigger U.S. companies have sepa r ate ma nu fact u r i ng l i nes established within their factories to produce non-GMO varieties – or varieties formulated to exclude any ingredients banned in the EU. They use their technological prowess to respond to changing market conditions with agility. “A large part of U.S. export success in different countries,” said Shelke, “ ha s been react ive: We lau nch something, watch it, and then try to

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figure out what might work.” In 1991, when she worked with Continental Ba k i ng Compa ny, t he compa ny wanted to send some of its most iconic Hostess-branded products – dessert cakes such as Twinkies ®, Ho Hos ®, and Suzy Q’s ® – to American military service members serving in Operation Desert Storm. The products were so popular, not on ly among t he ser v ice members but among t he local communities, that Tw ink ies actually became a form of currency in the wartime bartering economy. Eventually the company sent a team to set up a factory in Egypt – where the Twinkie continues to reign as one of the top-selling packaged cakes. Once these cakes had established an unexpected toehold in the Middle East, Shelke said, the company encountered a problem: The “cold chain” infrastructure used to keep the product at an appropriate temperature in other parts of the world did not exist throughout much of the region. A shipment of Ho Hos from Cairo to Yemen, for example, was in serious danger of melting. “For the Middle Eastern market,” said Shelke, “we changed the formulation. We used a fat in the chocolate and in some of

WORLD AGRICULTURE OUTLOOK

Twinkies and other popular dessert cakes were reformulated for higher temperatures in the Mideast.

the fillings that had a higher melting temperature. It remained solid at these higher temperatures … The first things that come to mind for a U.S. product developer who is looking to make a product for Asia will be cost, climate, and capability.” A few years later, Shelke was working as a product developer for Ben & Jerry’s, which introduced its premium ice cream brand to France and discovered that benzoate, the preservative used for the maraschino cherries in the company’s f lagship ice cream, Cherry Garcia®, was listed as a poison in France’s food code. It was Shelke’s job to change the formulation. “We switched to an aseptically packaged maraschino cherry,” she said, “and so we could do away with the benzoate and sell Cherry Garcia in France.” As the French Cherr y Garcia example illustrates, even the best-laid

plans of U.S. companies can go awry – but these companies actually plan for mistakes and mid-stream adjustments, said Shelke. “Even as they make these plans,” she said, “they are very, very modular about making sure they have a competitive advantage . . . doing their best to keep it lean and mean. That affords them the ability to very quickly take out one ingredient, if it’s presenting a disadvantage, and bringing another ingredient in.” They use thei r ma rket i nt e l l ige nc e a nd t e c h nolog y to add va lue to ag r icu lt u ra l products, often in unexpected ways. Cherry Garcia is, by definition, a value-added product: It’s more than just an ice cream, and customers are willing to pay to have it shipped across the Atlantic. Ben & Jerry’s was also able to adapt its ice creams to Japanese consumers – not only the packaging (a 1-pint carton literally did not fit in the typical residential freezer in Japan, Shelke discovered), but also the dimensions of mixed-in ingredients as well. Likewise, even as it continues to seem more logical, when you look at the globe, for many customers to get

Luigi Chiesa; Wikimedia Commons

made in the u.s.a.

their almonds from Spain or Iran or Australia, California almonds dominate the world’s markets. There’s a simple explanation, said Cohen: American almond handlers, Blue Diamond Growers chief among them, offer more than just almonds. “Rather than just getting almonds and putting them in a box and shipping them, we add value to them and come up with new applications and new ideas,” he said. “We bring value because we work directly with our end customers.” In recent years, Blue Diamond has developed its own brands of almond milk and gluten-free snack crackers – and it has often formulated different flavors or varieties for each,

Ben & Jerry’s substituted aseptically packaged cherries in its Cherry Garcia ice cream to adapt to the European market.

in direct consultation with its end customers. In 2013, Blue Diamond Growers opened its Almond Innovation Center, a proprietary research and development facility. With its own labs, staff, and equipment, the company is expanding its development of almond applications in confectionery, cereals, bakery, dairy, and other product categories. While the new center is a practical t o ol for d e ve lo pi n g t he s e ne w

applications, Cohen said it might be more valuable as an inter face in developing and st reng t hen ing relationships. “We use the A lmond Innovat ion Center,” he sa id, “to work w it h key customers, and to establish and maintain partnerships in developing new products.” I n bu i ld i n g s uc h endu r i n g g lob a l partnerships, the company illustrates t he d i st i nc t ive pr of ic ienc ie s of American agricultural exporters: the intelligence to discern what foreign con su mer s wa nt , t he c apabi l it y to i nt roduce a product over seas a ny where in t he world, a nd t he dexterity to keep it there, even as consumers change their minds.

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A GLOBAL VISION FOR AGRICULTURE

A GLOBAL VISION FOR AGRICULTURE The growth of the University of Missouri’s international engagement and global presence By Laura Convery

When people think of the University of Missouri (MU), its location in midAmerica may conjure up vivid imagery of a rich agricultural landscape, but their first thought may not include a combination of agricultural prowess and international focus. MU thrives on elevating international initiatives in education, research, and outreach to achieve the greatest good. At the College of Agriculture, Food and Natural Resources (CAFNR), this global service mission is fueling efforts to improve lives and address the biggest challenges of our time – namely climate change, agricultural development, and food security. Let’s take a look at a few of CAFNR’s international initiatives that are contributing to the global agricultural dialogue. Building Up Future Agricultural Leaders

Empowering young leaders to become global agricultural ambassadors begins with providing opportunities to expand competencies and understand our global interconnectedness. Recent estimates show MU is among the top 5 percent of institutions nationwide for study abroad participation. In addition, CAFNR students are quickly embracing the availability of international experiences in the college to further expand their agricultural expertise. CAFNR has study abroad programs in more than 12 countries that allow students to explore topics including, but not limited to, agricultural systems management, swine production, sustainable agriculture, and agricultural programs specific to the country they are visiting. Study abroad programs broaden global awareness and unleash hidden

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potential for tomorrow’s agricultural leaders. With a global population that is expected to reach 9 billion by 2050, building up future agricultural leaders is an important, yet often missing, strategy that can improve food security and sustainable agricultural development. CAFNR’s international initiatives are working toward changing this future to one where young leaders are engaged in global agricultural discussions and contributing their voice to addressing present and future challenges. Exchanging Ideas

Collaborating with international scientists and agricultural institutions is also part of the solution. Since 2010, CAFNR International Programs has trained nearly 150 foreign scientists from more than 30 countries through international fellowship and exchange

programs. For recent scholar Gertrude Kambauwa, the Scientific Exchange Program on Enhancing Capacity for Low-Emission Development Strategies (EC-LEDS) was particularly insightful on the beneficial role of sustainable agricultural practices in mitigating the effects of climate change. Speaking on the EC-LEDS program, Kambauwa said, “The opportunity offered to me has opened new avenues of knowledge and ways of doing business … and I intend to apply the knowledge gained in my country, Malawi.” Kambauwa’s words illustrate the importance of giving voice to African scientists to ensure they are heard in the new discourse on African agriculture. Remarkable stories emerge following such collaborative exchanges when individuals are provided the opportunity to contribute their expertise toward addressing critical issues in their home countries. Our experience

A GLOBAL VISION FOR AGRICULTURE

has shown that investing in training programs that improve lives and empower women will result in extraordinary returns for not only the trainee but for the global agricultural community at large. CAFNR International Programs is building its global presence one partnership at a time.

Photo by Kyle Spradley

The University of Missouri Assistance Program

The expansion of a unique initiative led by the CAFNR International Programs Office is helping to not only build partnerships but also deliver new knowledge to increase agricultural

Algeria Cochran Fellows (from left to right) Sihem Khiri, Souad Mammou, and Louiza Chekmam are participating in a program on agricultural marketing.

productivity on the African continent. The initiative, called the University of Missouri Assistance Program (UMAP), is a university-run nongovernmental organization (NGO) specializing in training, research assistance, and technical expertise. UMAP has been operational in Kenya since its registration as an

international NGO in 2003. While originally established to provide administrative and logistical management support to technical advisers working on USAID activities under the Southern Sudan Agricultural Revitalization Project, it quickly became apparent that UMAPâ&#x20AC;&#x2122;s capabilities extended beyond its original scope. UMAP has since been re-branded as an international development logistics management and consulting NGO to facilitate global agricultural development. With the recent registration and launch of the UMAP Ghana office, MU has expanded its framework of financial and administrative operations and

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MU photo

A GLOBAL VISION FOR AGRICULTURE

received legal status to operate anywhere on the African continent. Speaking at the launch, Handy Williamson, Jr., vice provost of International Programs at MU, discussed how MU’s innovative program is a model for others. “To my knowledge, this is the f irst university-based NGO in Ghana,” said Williamson. For now, UMAP Ghana is seeking to improve food security in Ghana through the provision of technical assistance. Adding to Williamson’s remarks, Dr. William Meyers, UMAP board president and director of CAFNR International Programs, shared his vision for UMAP Ghana with local news outlet Joy News. “We want to develop a program that helps improve the delivery system for extension in Ghana, especially in the northern three provinces,” he said. Extension off icers in Ghana will b enef it f rom U M A P ’s t r a i n i ng

WORLD AGRICULTURE OUTLOOK

Photo by Lance Day

Above: UMAP Kenya has assisted with logistics for the Kenya Templeton Foundation Project. Right: Albania Cochran Fellows on the MU campus as part of a program on agricultural policy.

opportunities and technical expertise as they transition from a traditional approach to a more handson approach in ef forts to improve food security in the country. With more than 30 years of international development experience, MU has an extensive database of African and international experts to provide such technical assistance as well as data

collection, survey analysis, and additional consulting services. As a result of the breadth and depth of MU’s expertise, UMAP is uniquely positioned to facilitate the management and implementation of projects, training, and conferences for a diverse array of development partners, governments, community organizations, and businesses. Efforts to build capacity

A GLOBAL VISION FOR AGRICULTURE

MU photo

Left: A global snapshot of CAFNR International Programs from 2010-2012. Above: UMAP seal. Below left: Gertrude Kambauwa – EC-LEDS fellow – in front of Jesse Hall on the MU campus.

MU photo

regional workshops throughout Africa,” said Christy Copeland, UMAP secretary and assistant director of CAFNR International Programs. UMAP Ghana hopes to collaborate with USAID and the Feed the Future initiative in the near future. While still in its first year of operation, the UMAP Ghana office has already agreed to cooperate with the Ghana Ministry of Food and Agriculture to build linkages and collaborate on food security initiatives. Under the leadership of program manager Nana Oforiwaa Koranteng, UMAP Ghana has made remarkable progress toward improving food security by bringing a variety of stakeholders to the table. So far, UMAP Ghana has facilitated five international conferences for more than 150 participants – representing an expansion of UMAP’s global engagement in various other countries throughout the world. The future looks bright for UMAP Ghana and CAFNR International Programs’ expanding global presence. begin with UMAP’s policy of staffing both the Kenya and Ghana offices with local in-country specialists. With this comes the ability to draw on our staff’s local knowledge and deliver financial assistance in local currencies with bank accounts in both countries.

Led by Nancy Ngugi, the UMAP Kenya office has facilitated more than a dozen workshops and conferences in more than six African countries since 2009. “We were particularly appreciative of the ability to assist USAID with the Kenya Governors’ Forum as well as

*A complete UM AP Capability Statement can be found at cafnr. missouri.edu/cip/umap.php. For more information, please contact the CAFNR International Programs office at 573-882-0092 or email CIP@ Missouri.edu.

WORLD AGRICULTURE OUTLOOK

directory

U.S. Cooperator market development program participants Compiled from FAS data.

Participant Country/ regional Name Phone Number Cal-Pure Australia +61 417 149 922 California Grape & Tree Fruit League Australia +61 2 9642 1555 Cranberry Marketing Committee Australia +61 2 9642 1555 Washington State Fruit Commission Northwest Cherry Growers Australia +61 2 9642 1555 Washington State Apple Commission Bangladesh +91 124 434 4500 Cal-Pure Belgium-Luxembourg +32 9 265 02 43 Florida Department of Citrus Belgium-Luxembourg +32 2 894 9025 U.S. Meat Export Federation Belgium-Luxembourg +32 2 514 1506 Cal-Pure Brazil +55 11 5543 9650 U.S. Apple Export Council Brazil +55 14 8124 9929 U.S. Dairy Export Council Brazil +55 11 5084 0820 Washington State Fruit Commission Northwest Cherry Growers Brazil +55 14 3847 1183 Washington State Apple Commission Cambodia +848 5 4136 550 California Pear Advisory Board Canada +1 416 200 7207 California Tomato Commission Canada +1 905 272 8006 California Walnut Commission Canada +1 905 206 0577 Florida Department of Citrus Canada +1 416 642 7965 The Catfish Institute (TCI) Canada +1 416 200 7207 U.S. Apple Export Council Canada +1 416 200 7207 Washington State Apple Commission Canada +1 509 663 9600 Washington State Fruit Commission Northwest Cherry Growers Canada +1 403 295 0985 Wine Institute Canada +1 905 336 8932 U.S. Dairy Export Council Caribbean Basin +1 407 647 8899 U.S. Meat Export Federation Caribbean Basin +1 830 997 6319 U.S. Wheat Associates Chile +56 2 231 1636 Alaska Seafood Marketing Institute (ASMI) China, People’s Republic of +86 21 6888 9835 Almond Board of California China, People’s Republic of +86 159 0077 2822 American Soybean Association China, People’s Republic of +86 10 6505 1830 Cal-Pure China, People’s Republic of +86 21 6287 6218 California Walnut Commission China, People’s Republic of +86 21 65090192 Cotton Council International China, People’s Republic of +86 21 6288 0808 Ginseng Board of Wisconsin China, People’s Republic of +86 21 6319 0668 National Potato Promotion Board United States Potato Board China, People’s Republic of +86 21 6279 8668 Southern Forest Products Association (SFPA) China, People’s Republic of +86 21 6448 4401 U.S. Dairy Export Council China, People’s Republic of +86 21 6279 8668 U.S. Grains Council China, People’s Republic of +86 10 6505 1314 U.S. Meat Export Federation China, People’s Republic of +86 24 8674 2533 U.S. Wheat Associates China, People’s Republic of +86 10 6505 3866 USA Poultry & Egg Export Council China, People’s Republic of +86 100 6581 1255 Wine Institute China, People’s Republic of +86 21 5515 5310 Washington State Apple Commission Colombia +507 836 5310 National Potato Promotion Board/ United States Potato Board Costa Rica +506 2291 5282 Washington State Apple Commission Costa Rica +52 442 218 1097 Wine Institute Denmark +45 3 332 6220 Washington State Apple Commission Dominican Republic +52 442 218 1097

WORLD AGRICULTURE OUTLOOK

directory

Participant Washington State Apple Commission U.S. Wheat Associates Washington State Apple Commission American Hardwood Export Council AHEC Southern Forest Products Association SFPA Alaska Seafood Marketing Institute ASMI Cal-Pure Florida Department of Citrus USA Dry Pea And Lentil Council Cal-Pure Cherry Marketing Institute Cranberry Marketing Committee USA Rice Federation Wine Institute Washington State Apple Commission Washington State Apple Commission Blue Diamond Growers Cal-Pure Cotton Council International National Renderers Association U.S. Dairy Export Council U.S. Meat Export Federation U.S. Wheat Associates USA Poultry & Egg Export Council Washington State Fruit Commission Northwest Cherry Growers Almond Board of California Blue Diamond Growers Cal-Pure U.S. Apple Export Council USA Dry Pea And Lentil Council Washington State Apple Commission Alaska Seafood Marketing Institute ASMI American Soybean Association Blue Diamond Growers California Tomato Commission Florida Department of Citrus Ginseng Board of Wisconsin National Potato Promotion Board/ United States Potato Board Softwood Export Council SEC Southern Forest Products Association SFPA The Engineered Wood Association U.S. Dairy Export Council U.S. Grains Council U.S. Meat Export Federation U.S. Wheat Associates USA Poultry & Egg Export Council Washington State Fruit Commission Northwest Cherry Growers Wine Institute U.S. Grains Council

Country/ regional Name Ecuador Egypt El Salvador European Union European Union France France France France Germany Germany Germany Germany Germany Guatemala Honduras Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong Hong Kong

Phone Number +507 836 5310 +202 2380 3162 +52 442 218 1097 +44 020 7626 4111 +44 149 445 1000 +33 1 3923 2007 +33 6 6274 8682 +33 1 40 28 5670 +33 1 4551 3603 +49 0 5702 2629 +49 40 480 655 0 +49 228 943787 0 +49 40 4503 8660 +49 421 217020 +52 442 218 1097 +52 442 218 1097 +852 898 8440 +852 2707 7959 +852 2890 2755 +852 2890 2529 +852 2833 5977 +85 2 2890 7408 +852 2890 2815 +852 2890 2908

Hong Kong India India India India India India Japan Japan Japan Japan Japan Japan

+852 2554 1600 +91 981 095 5533 +91 6 446 8354 +91 11 4606 8383 +91 124 434 4500 +91 11 2618 4324 +91 124 434 4500 +81 3 3225 0008 +81 3 5563 1414 +81 3 5226 5601 +81 3 3505 5736 +81 33 584 7019 +81 03 4496 4126

Japan Japan Japan Japan Japan Japan Japan Japan Japan

+81 33 505 5736 +81 03 3501 2131 +81 03 3501 2131 +81 03 3501 2131 +81 3 3221 6410 +81 3 3505 0601 +81 3 3584 3911 +81 3 5614 0798 +81 3 3403 8288

Japan Japan Jordan

+81 050 3488 4172 +81 3 3707 8960 +962 6585 1254

WORLD AGRICULTURE OUTLOOK

directory

Participant National Potato Promotion Board/ United States Potato Board Washington State Fruit Commission Northwest Cherry Growers American Soybean Association Cal-Pure Cotton Council International Cranberry Marketing Committee U.S. Dairy Export Council U.S. Grains Council U.S. Meat Export Federation U.S. Wheat Associates USA Poultry & Egg Export Council Wine Institute Washington State Apple Commission U.S. Dairy Export Council U.S. Meat Export Federation USA Poultry & Egg Export Council Washington State Apple Commission U.S. Grains Council Washington State Apple Commission Washington State Fruit Commission Northwest Cherry Growers American Hardwood Export Council (AHEC) American Soybean Association APA-The Engineered Wood Association (APA) Cal-Pure California Grape & Tree Fruit League California Tomato Commission Cranberry Marketing Committee National Potato Promotion Board/ United States Potato Board National Renderers Association Softwood Export Council SEC Southern Forest Products Association (SFPA) U.S. Apple Export Council U.S. Dairy Export Council U.S. Grains Council U.S. Meat Export Federation U.S. Wheat Associates USA Dry Pea And Lentil Council USA Poultry & Egg Export Council Washington State Apple Commission Washington State Fruit Commission Northwest Cherry Growers Wine Institute U.S. Wheat Associates American Soybean Association U.S. Wheat Associates Wine Institute Florida Department of Citrus U.S. Wheat Associates U.S. Grains Council

WORLD AGRICULTURE OUTLOOK

Country/ regional Name

Phone Number

Korea, Democratic People’s Republic of

+82 2 543 9380

Korea, Democratic People’s Republic of Korea, Republic of Korea, Republic of Korea, Republic of Korea, Republic of Korea, Republic of Korea, Republic of Korea, Republic of Korea, Republic of Korea, Republic of Korea, Republic of Laos Lebanon Lebanon Lebanon Lebanon Malaysia Malaysia

+82 2 786 7701 +82 2 738 7056 +82 10 3070 7081 +82 2 722 3681 +82 2 543 9380 +82 2 516 6893 +82 2 720 1891 +82 2 720 1894 +82 2 720 7926 +82 2 543 9380 +82 2 543 9380 +848 5 4136 550 +961 1 740393 +961 1 740378 +961 1 740378 +961 1 740378 +60 3 2273 6826 +60 3 8070 7216

Malaysia Mexico Mexico Mexico Mexico Mexico Mexico Mexico

+66 2 970 8207 +52 55 2623 1850 +52 33 5000 0990 +52 55 2623 1833 +52 55 5344 3407 +52 442 161 2784 +52 442 234 2863 +52 777 316 7370

Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico Mexico

+52 777 316 7370 +52 55 5980 6080 +52 55 2623 1833 +55 2623 1833 +52 777 316 7370 +52 55 5119 0475 +52 55 5282 0244 +52 81 8989 2323 +52 55 5 202 2075 +52 555 362 7407 +525 55 5980 6090 +52 442 218 1097

Mexico Mexico Morocco Netherlands Netherlands Netherlands Netherlands Antilles Nigeria Panama

+52 442 218 1097 +52 55 5281 6728 +212 22 74 14 59 +31 20 520 7978 +31 10 413 915 +31 70 314 2425 +31 703 12 1073 +234 1 261 0657 +507 315 1008

directory

Participant Washington State Apple Commission Washington State Apple Commission U.S. Wheat Associates Wine Institute U.S. Apple Export Council U.S. Meat Export Federation U.S. Wheat Associates USA Poultry & Egg Export Council Washington State Apple Commission Washington State Fruit Commission Northwest Cherry Growers Wine Institute USA Poultry & Egg Export Council American Soybean Association National Potato Promotion Board/ United States Potato Board U.S. Meat Export Federation U.S. Wheat Associates USA Poultry & Egg Export Council Washington State Apple Commission Washington State Fruit Commission Northwest Cherry Growers Wine Institute U.S. Wheat Associates USA Poultry & Egg Export Council U.S. Meat Export Federation American Hardwood Export Council (AHEC) Alaska Seafood Marketing Institute (ASMI) USA Dry Pea And Lentil Council Washington State Apple Commission Florida Department of Citrus USA Poultry & Egg Export Council Wine Institute American Soybean Association Blue Diamond Growers Ginseng Board of Wisconsin National Potato Promotion Board/ United States Potato Board The Engineered Wood Association U.S. Apple Export Council U.S. Dairy Export Council U.S. Grains Council U.S. Wheat Associates Washington State Fruit Commission Northwest Cherry Growers Wine Institute Blue Diamond Growers National Potato Promotion Board/ United States Potato Board U.S. Dairy Export Council USA Dry Pea And Lentil Council Washington State Apple Commission

Country/ regional Name Panama Peru Philippines Poland Russian Federation Russian Federation Russian Federation Russian Federation Russian Federation

Phone Number +507 836 5310 +507 836 5310 +63 2 818 4610 +48 22 845 69 87 +7 921 637 4199 +7 495 544 9387 +7 495 956 9081 +7 495 781 9200 +7 812 702 7151

Russian Federation Russian Federation Saudi Arabia Singapore

+007 423 222 82 26 +7 926 389 5745 +966 3 8648684 +65 6737 6233

Singapore Singapore Singapore Singapore Singapore

+65 6278 3832 +65 6 733 4255 +65 6737 4311 +65 6737 1726 +603 8070 7216

Singapore Singapore South Africa, Republic of South Africa, Republic of South America Southern Asia Spain Spain Sri Lanka Sweden Sweden Sweden Taiwan Taiwan Taiwan

+66 2 970 8207 +65 6278 3832 +27 21 418 3710 +27 11 867 7082 +1 303 623 6328 +852 2724 0228 +34 93 589 8547 +34 93 589 8547 +91 124 434 4500 +46 8 506 353 10 +46 703 822100 +46 8 544 450 21 +886 2 2560 2927 +886 2 2351 9211 +886 2 2726 1939

Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan

+886 2 8789 8939 +886 2720 1624 +886 2 8789 8939 +886 2 8789 8939 +886 2 2508 0176 +886 2 2521 1144

Taiwan Taiwan Thailand

+886 9 1194 5965 +886 2 8789 8939 +1 916 446 8354

Thailand Thailand Thailand Thailand

+66 81 753 1000 +662 2543 768 +66 2 251 8772 +662 656 7921

WORLD AGRICULTURE OUTLOOK

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directory

Participant Washington State Fruit Commission Northwest Cherry Growers Washington State Apple Commission U.S. Grains Council Cal-Pure Alaska Seafood Marketing Institute (ASMI) Almond Board of California American Peanut Council Cotton Council International Florida Department of Citrus U.S. Apple Export Council U.S. Dairy Export Council Washington State Apple Commission Washington State Fruit Commission Northwest Cherry Growers Wine Institute Alaska Seafood Marketing Institute (ASMI) Almond Board of California American Biomass Trade Cooperative American Hardwood Export Council (AHEC) American Peanut Council American Pistachio Growers (APG) American Seed Trade Association American Sheep Industry Association American Soybean Association APA-The Engineered Wood Association (APA) Blue Diamond Growers Brewers Association Cal-Pure California Asparagus Commission California Cherry Advisory Board California Cling Peach Advisory Board California Dried Prune Board California Fig Advisory Board California Grape & Tree Fruit League California Kiwifruit Commission California Pear Advisory Board California Plum Marketing Board California Strawberry Commission California Tomato Commission California Tomato Farmers California Walnut Commission Cherry Marketing Institute Cotton Council International Cranberry Marketing Committee Distilled Spirits Council of U.S., Inc. Florida Department of Citrus Florida Tomato Committee Food Export Association of the Midwest Food Export USA Northeast Ginseng Board of Wisconsin Hawaii Papaya Industry Association Hop Growers of America

Country/ regional Name

Phone Number

Thailand Trinidad and Tobago Tunisia United Arab Emirates United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom United Kingdom

+66 2 970 8207 +507 836 5310 +216 71 908 622 +971 505 592 740 +44 1483 41 6136 +44 759 069 0982 +44 0208 263 6254 +44 207 297 2042 +44 207 067 0276 +44 1753 851910 +44 1869 351 519 +44 1727 862074

United Kingdom United Kingdom United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States

+44 1707 226 176 +44 20 3008 8060 +1 907 465 5560 +1 209 343 3238 +1 434 293 3309 +1 703 435 2900 +1 703 838 9500 +1 559 475 0435 +1 703 837 8140 +1 303 771 3500 +1 314 576 1770 +1 253 565 6600 +1 916 446 8354 +1 303 447 0816 +1 310 988 4686 +1 760 356 4906 +1 209 368 4309 +1 510 654 5400 +1 916 565 6232 +1 559 243 8600 +1 559 226 6330 +1 916 441 0678 +1 916 441 0432 +1 559 638 8260 +1 831 724 1301 +1 559 261 2630 +1 559 261 2630 +1 916 932 7070 +1 517 669 4264 +1 202 745 7805 +1 508 291 1510 +1 202 682 8883 +1 863 537 3999 +1 407 660 1949 +1 312 334 9200 +1 215 829 9111 +1 715 443 2444 +1 808 969 1160 +1 509 453 4749

WORLD AGRICULTURE OUTLOOK

directory

Participant Intertribal Agriculture Council Leather Industries of America Mid-America International Agri-Trade Council (MIATCO) Mohair Council Of America National Association of State Departments of Agriculture (NASDA) National Confectioners Association National Grape Co-operative Association/Welchâ&#x20AC;&#x2122;s National Hay Association National Honey Board National Potato Promotion Board/ United States Potato Board National Renderers Association National Sunflower Association National Watermelon Promotion Board New York Wine and Grape Foundation North American Export Grain Association North American Millers Association Northwest Cherry Growers Northwest Wine Coalition Ocean Spray Cranberries, Inc. Organic Trade Association Pear Bureau Northwest Pet Food Institute Raisin Administrative Committee Softwood Export Council (SEC) Southern Forest Products Association (SFPA) Southern U.S. Trade Association (SUSTA) Texas Produce Export Association The Catfish Institute (TCI) The Popcorn Board U.S. Dairy Export Council U.S. Dry Bean Council U.S. Grains Council U.S. Hide, Skin & Leather Association U.S. Highbush Blueberry Council U.S. Livestock Genetics Export, Inc. U.S. Meat Export Federation U.S. Rice Producers U.S. Wheat Associates US Rice Producers Association USA Dry Pea And Lentil Council USA Poultry & Egg Export Council USA Rice Federation Washington State Apple Commission Western U.S. Agricultural Trade Association (WUSATA) National Potato Promotion Board/ United States Potato Board U.S. Dairy Export Council Washington State Apple Commission

WORLD AGRICULTURE OUTLOOK

Country/ regional Name United States United States

Phone Number +1 406 259 3525 +1 202 342 8497

United States United States

+1 312 334 9200 +1 325 655 3161

United States United States

+1 202 296 9680 +1 202 534 1440

United States United States United States

+1 716 326 5200 +1 503459 6308 +1 303 776 2337

United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States United States

+1 303 369 7783 +1 703 683 3561 +1 701 328 5100 +1 407 657 0261 +1 585 394 3620 +1 202 682 4030 +1 202 484 2200 +1 509 453 4837 +1 206 292 6340 +1 508 946 1000 +1 802 275 3800 +1 503 652 9720 +1 202 367 1120 +1 559 225 0520 +1 503 620 5946 +1 504 443 4464 +1 504 568 5986Â +1 956 581 8632 +1 601 977 9559 +1 312 644 6610 +1 703 528 3049 +1 605 494 0280 +1 202 789 0789 +1 202 587 4250 +1 916 983 0111 +1 618 548 9154 +1 303 623 6328 +1 713 974 7423 +1 202 463 0999 +1 713 974 7423 +1 208 882 3023 +1 770 413 0006 +1 703 236 2300 +1 509 663 9600

United States

+1 360 693 3373

Vietnam Vietnam Vietnam

+848 393 01740 +848 393 01740 +848 5 4136 550