Microsoft photo
Original 9/12/08 Joel Severinghaus
Modified 1/20/13 Chad Hart

Why do Iowa farmers need export markets?
• That’s where the customers are
• That’s where the economic growth is
• That’s where the consumption growth is
• We produce surpluses
• We only eat high on the hog
• Exports are crucial to Iowa farm income

• That’s where the customers are
Wal-Mart photo
In China since 1996, 370 stores
Walmarts, Sam’s Clubs, and Neighborhood Markets

True or false?
1. Two-thirds of the people on this planet are Asian.
True.

95% of the world’s population lives outside the US
China
19%
Rest of the
World
59%
U.S.
5%
India
17%
Source: CIA World Factbook

True or false?
2. China, India, and Indonesia have the three largest populations.
False.
The US is # 3.

Japan
Russia
Bangladesh
Nigeria
Pakistan
Brazil
Indonesia
United States
India
China
0
Top 10 populations
500
Million people
1000 1500
Source: CIA World Factbook

True or false?
3. Over the next 40 years, the highest population growth rate will be in India.
False.
In Africa.

Population growth 2010 to 2050
Japan
Russia
Bangladesh
Nigeria
Pakistan
Brazil
Indonesia
United States
India
China
-25% 0% 25% 50% 75% 100% 125% 150%
Million people
Source: U.S. Census Bureau, International Data Base

• That’s where the economic growth is
Hong Kong

True or false?
4. Nigeria’s economy is growing faster than the
US economy.
True.

United States
Canada
Japan
Russia
Pakistan
Mexico
Indonesia
Brazil
Nigeria
China
India
-2
Economic growth rates
0 2 4
% Growth
6 8 10
Source: CIA World Factbook

Sources of US petroleum imports, 2011
Rest of World
20%
Canada
24%
Angola
3%
Colombia
4%
Iraq
4%
Russia
6%
Mexico
11%
Nigeria
7% Venezuela
8%
Saudi Arabia
10%
Source: U.S. Energy Information Administration

Turkey
Indonesia
Canada
South Korea
Mexico
Brazil
Russia
India
Japan
China
U.S.
EU
0
Size of economy
4 8
$ Trillion
12 16
Source: CIA World Factbook

Chinese economic growth: 1990
Beijing

Chinese economic growth: 2005 mcchronicles.blogspot.com photo AP photo
Dongguan, Dec. 10, 2005: McDonald’s opens first drive-thru in China; half of the 100 restaurants plan to open each year will have drive-thrus

Chinese economic growth: 2008
1000 more cars added to the streets of Beijing every day

Chinese economic growth: 2011
Open 24 hours Delivery 24 hours
More than 1,300 McDonald’s in China, with 700 more on the way

10 largest economies (GDP rank)
2020
US
China
Japan
Germany
India
France
UK
Brazil
Italy
Canada
2030
US
China
India
Japan
Germany
Brazil
France
Russia
UK
Italy
2040
China
US
India
Japan
Brazil
Germany
Russia
France
UK
Mexico
2050
China
US
India
Brazil
Japan
Russia
Mexico
Germany
Indonesia
France
Source: PwC, The World in 2050, January 2011

True or false?
5. There are more middle-class consumers in India than in the US.
True.

“Middle class” population growth in developing countries 2009 to 2030
Middle East and
North Africa
Sub-Saharan Africa
India’s middle class already out-numbers total US population
Asia Pacific
Central and South
America
0 500 1000 1500 2000 2500 3000 3500
Millions of people
2030 2009
Source: OECD, , The Emerging Middle Class in Developing Countries, Homi Kharas, January 2010

12 countries over 100 million population
5.0%
Bubble size: population in 2010
4.0%
Nigeria
3.0%
India
Bangladesh
2.0%
Philippines
US Pakistan
1.0%
0.0%
-1.0%
Japan
U.S.
Brazil
India
Mexico
Indonesia
Russia
China
-2.0%
-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Economic growth rate
Sources: CIA “World Factbook”, U.S. Census Bureau

• That’s where the consumption growth is
Hong Kong

100
Trends in US protein consumption
90
80
70
60
50
40
30
20
10
0
Beef Pork Chicken Eggs Fish
Source: USDA Economic Research Service “Food Availability” data sets

True or false?
6. The highest pork consumption growth is in Mexico.
False.

180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
Pork consumption growth
Brazil China South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/20/13

1800%
1600%
1400%
1200%
1000%
800%
600%
400%
200%
0%
-200%
Chicken consumption growth
Brazil China India South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/20/13

True or false?
7. Beef consumption in India has doubled in the past decade or so.
False, but it is close.

Beef consumption growth
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
-20%
Brazil China India South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/20/13

They eat beef in India?
The Hindus don’t, but some of the Muslims do.
Religion in India
Hindu
80.5%
Other 1.9%
Sikh 1.9%
Christian 2.3%
Muslim
13.4%
About 150 million people -third largest Muslim population after Indonesia and Pakistan source: 2001 census, in CIA “World Factbook”

True or false?
8. Milk consumption in India is growing faster than in China.
False.
But it depends on the time frame.

700%
600%
500%
400%
300%
200%
100%
0%
-100%
Fluid cow milk consumption growth
Brazil China India South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/20/13

Nearing 1,000 Pizza Hut restaurants,
By 2011, 130 Pizza Hut “Home Service” units (doubled in 3 years)

Baskin Robbins has 40 locations around Beijing

365 Subways in China

More than 700 Starbucks

True or false?
9. China consumes more soybean meal than the
US.
True.

60
50
40
30
20
10
0
Brazil China India South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/20/13

Corn consumption
300
250
200
150
100
50
0
Brazil China India South Korea Mexico United States
Source: USDA Foreign Agriculture Service PSD Online 1/20/13

Heart of Iowa Co-op, Nevada

True or false?
10. We export about a fifth of the US corn crop.
False.
But we previously did.

US corn use
70%
60%
50%
40%
30%
20%
10%
0%
Feed Ethanol Food, Seed, & Other Exports
Source: USDA WASDE reports

True or false?
11. We export about a tenth of
US dairy production.
False.
Now about 20%.

10%
5%
0%
25%
Export share of US production, 2012
20%
15%
Beef Pork Dairy Chicken Turkey
Source: USDA ERS “Livestock, Dairy & Poultry Outlook” 1/13

True or false?
12. Japan is our # 1 ag export market.
False.
Used to be, before NAFTA.

Top ten US ag export markets, 2011
Turkey
Indonesia
Hong Kong
Taiwan
Korea, South
European Union-27
Japan
Mexico
China
Canada
Canada & Mexico buy
27% of US ag exports
0 5 10 15 20
$ Billion
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations

20
18
16
14
12
10
8
6
4
2
0
US agricultural trade with Canada
NAFTA
Two-way trade up 349% since NAFTA
Exports Imports
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations

20
18
10
8
6
4
2
16
14
12
0
US agricultural trade with Mexico
NAFTA
Two-way trade up
457% since NAFTA
Exports Imports
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations

Microsoft photo
Exports are crucial to
Iowa farm income

True or false?
13. Iowa ranks # 3 in state ag exports.
False.
# 2.

20
18
16
14
12
10
8
6
4
2
0
Top 10 ag exporting states, 2011
7.75% of $136 billion total US ag exports
CA IA IL TX NE MN KS IN ND MO
Source: USDA Economic Research Service, “State Export Data”

True or false?
14. Exports equal about
15% of Iowa farm cash receipts.
False.
More like 35%.

Iowa agricultural exports
12
10
8
6
4
2
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: USDA Economic Research Service, “State Export Data”

True or false?
15. Iowa exports billions of dollars worth of corn and soybeans.
True.

Iowa’s state export rankings, 2011
# 1 Soybeans
# 1 Corn
# 1 Pork
# 1 Feeds
$2.684 billion
$2.473 billion
1.887 billion
1.091 billion
# 1 Vegetable oils
# 1 Oilseed meal
566 million
463 million
# 5 Beef 294 million
# 5 Hides 144 million
# 12 Dairy 107 million
Source: USDA Economic Research Service, “State Export Data”

Iowa’s top 10 manufactured exports, 2011
1. Tractors
2. Aircraft engines/parts
3. Herbicides
4. Front-end loaders
5. Excavators
$935 million
271 million
244 million
210 million
209 million
6. Aluminum alloy plates
7. Sprayers
8. Bulldozers
9. Refrigerator-freezers
201 million
164 million
136 million
129 million
10. Special purpose vehicles 105 million
Source: http://www.census.gov/foreign-trade/statistics/state/data/ia.html

1 in 3 John Deere Waterloo Works tractors is exported
131 tractors on 49 railcars, crossing Nebraska, bound for China, 5/08

Significance of Iowa’s manufactured exports
• Exports support 7.1% of total privatesector employment, and 21.2% of total manufacturing employment
• 2,447 Iowa companies export
• 82% of Iowa exporters are small & medium-sized enterprises (less than 500 employees)
Source: USDOC ITA “Iowa: Exports, Jobs, and Foreign Investment” 12/11

12
10
8
6
4
2
0
Top 3 US soybean export markets
China Mexico Japan
Source: US Census Bureau, Foreign Trade Statistics

So why do Iowa farmers need export markets?
• That’s where the customers are
• That’s where the economic growth is
• That’s where the consumption growth is
• We produce surpluses
• We only eat high on the hog
• Exports are crucial to Iowa farm income

Population vs. arable land
China
India
US share of global population
19%
17%
5% share of global arable land
5%
10%
13%

Arable land