Why Iowa farmers need export markets Microsoft photo Original 9/12/08 Joel Severinghaus Modified 1/28/17 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, 426 stores Walmarts, Sam’s Clubs, and Neighborhood Markets

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

95% of the world’s population lives outside the US Source: CIA World Factbook

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

Top 10 populations 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 2017 to 2050 Source: U.S. Census Bureau, International Data Base

That’s where the economic growth is Hong Kong

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

Economic growth rates Source: CIA World Factbook

Sources of US petroleum imports, 2015 Source: U.S. Energy Information Administration

Size of economy 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 More than 2,000 McDonald’s in China Open 24 hours Delivery 24 hours More than 2,000 McDonald’s in China

10 largest economies (GDP rank) 2017 China US India Japan Germany Russia Brazil Indonesia UK France 2020 2030 2040 2050 US China Japan India Germany Brazil France Russia UK Mexico Italy Indonesia Canada 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 India’s middle class already out-numbers total US population Source: OECD, , The Emerging Middle Class in Developing Countries, Homi Kharas, January 2010

12 countries over 100 million population Bubble size: population in 2017 Sources: CIA “World Factbook”, U.S. Census Bureau

That’s where the consumption growth is Hong Kong

Trends in US protein consumption Source: USDA Economic Research Service “Food Availability” data sets

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

Pork consumption growth Source: USDA Foreign Agriculture Service PSD Online 1/28/17

Chicken consumption growth Source: USDA Foreign Agriculture Service PSD Online 1/28/17

True or false? 7. Beef consumption in India has doubled in the past 20 years. False, but it’s close.

Beef consumption growth Source: USDA Foreign Agriculture Service PSD Online 1/28/17

Religion in India They eat beef in India? The Hindus don’t, but some of the Muslims do. About 150 million people -- third largest Muslim population after Indonesia and Pakistan Source: CIA World Factbook

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

Fluid milk consumption growth Source: USDA Foreign Agriculture Service PSD Online 1/28/17

Over 1,600 Pizza Hut restaurants

Baskin Robbins has 90 locations in China, Plans for 249 more locations over the next 10 years

581 Subways in China

More than 2,300 Starbucks

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

Soybean meal consumption Source: USDA Foreign Agriculture Service PSD Online 1/28/17

Corn consumption Source: USDA Foreign Agriculture Service PSD Online 1/28/17

We produce surpluses Heart of Iowa Co-op, Nevada

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

US corn use Source: USDA WASDE reports

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

Export share of US production, 2016 Source: USDA WASDE

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

Top ten US ag export markets, 2015 Canada & Mexico buy 29% of US ag exports Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations

Agricultural trade with Canada NAFTA Two-way trade up 393% since NAFTA Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations

Agricultural trade with Mexico NAFTA Two-way trade up 517% since NAFTA Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations

Exports are crucial to Iowa farm income Microsoft photo

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

Top 10 ag exporting states, 2015 7.5% of $133 billion total US ag exports Source: USDA Economic Research Service, “State Export Data”

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

Iowa agricultural exports 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, 2015 # 2 Soybeans $2.516 billion # 1 Pork $1.988 billion # 1 Feeds $1.506 billion # 1 Corn $1.398 billion # 2 Soybean meal $639 million # 2 Vegetable oils $392 million # 4 Beef $356 million # 2 Hides $293 million # 12 Dairy $122 million Source: USDA Economic Research Service, “State Export Data”

Iowa’s top 10 manufactured exports, 2015 1. Tractors $764 million 2. Herbicides 405 million 3. Aircraft engines/parts 264 million 4. Harvesting machinery 259 million 5. Aluminum alloy plates 250 million 6. Front-end loaders 179 million 7. Special purpose vehicles 152 million 8. Excavators 119 million 9. Ag/Hort/Forestry mach. 116 million 10. Medical instruments 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 private-sector employment, and 21.2% of total manufacturing employment 2,447 Iowa companies export 82% of Iowa exporters are small & medium-sized enterprises (less than 500 employees) Source: USDOC ITA “Iowa: Exports, Jobs, and Foreign Investment” 12/11

Top 3 US soybean export markets Source: USDA-FATUS

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

Population vs. arable land share of global share of global population arable land China 19% 5% India 17% 10% US 4% 13%

Arable land