9 Dec 2011 - The Value of Agricultural Exports

“Why do we ship so much of our food overseas?” That was the opening question in a recent e-mail from a radio listener in Chicago; a lady who has communicated with me three or four times over the past ten years and always leads with that question, and then follows up with the reason she thinks we ought not be doing that. She says “. . . if we didn’t ship all of that food overseas we would have more here in this country and my food prices would be a lot lower.”

My initial response several years ago was . . . “How much lower can food prices go?” They were very low at that time; then I followed that up by saying “ If we do that, then you decide which half of the farmers and ranchers close up shop and go on the unemployment line, because we produce far more than we can consume in this country.”

The question this time was prompted by the story a few weeks ago that in the most recent fiscal year we set a record in agricultural exports from the United States. We shipped 137-billion-dollars worth of agricultural products to foreign buyers, an all time record.

So now I expand my answer to the lady. . .first of all by pointing out we produce far more than we consume, secondly with 7-billion people on the planet only 5% live within the borders of the United States, the other 95% live outside our borders and millions of them are faced with malnutrition and starvation. They need what we produce so why should we not share it with them.

There are other reasons, too, why agricultural exports are so important. Let’s talk balance of trade; the most recent report showed the U.S. with a negative trade balance of $43-billion for October. The one exception in that report was U.S. agriculture , that month after month for years, has shown a positive trade balance, which means we consistently export more ag products than we import. That’s good for the economy, but beyond that , the export industry creates millions of jobs in this country. The export of our food also helps build a positive relationship with people of other countries.

I’m sure many of you hear the same question in your community. It is important for those of us in the agricultural community to tell the export story so we can continue to establish new trade agreements with other foreign buyers and increase the global markets for U.S. producers. It’s a win-win opportunity for U.S. producers and the U.S. economy

My thoughts on Samuelson Sez.