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There’s a wide, wide world of trade out there
Hoosier Ag Today
By Gary Truitt
A hundred years ago when farmers were ready to market their crops, they loaded up the wagon and took them to town. If the farmer wanted to expand his market, he simply went to a bigger town. Today, things are vastly different. Livestock routinely travel across state lines to be processed; and grain and soybeans travel thousands of miles by rail, barge and truck to destinations around the world. Expanding your market, however, is not so easy.

In fact, it is the efforts by the U.S. to expand markets for U.S. farmers by demanding greater market access that derailed the WTO trade negotiations. Overlooked in this international tug-of-war are opportunities for individual states to expand trading opportunities for their farmers.

The State of Indiana is one state that has recognized this and is moving fast to cash in. State and commodity group leaders are convinced that state-specific trade deals with individual nations are feasible and will result in profitable deals for producers and agri-businesses. This week, Hoosier State leaders are in Taiwan and Vietnam building relationships that they hope will result in state-specific trade deals. This is the second such mission this year specifically designed to promote agricultural trade.

On this trip are several representatives of the Indiana wine industry. They have discovered that Asian consumers desire a sweeter, fruitier wine, the kind produced in the Midwest. They have gone armed with cases of various vintages hoping to build a market for Indiana wine. While Europeans look down their noses at Midwest wines, Asians are popping the corks on U.S. wine and looking for more.

The opportunity is not just for specialty products; a variety of identity-preserved grains and specialized meats are also items that are in demand by other nations. Often these products are outside of the bulk commodity sector and are usually in amounts too small to be of interest by large multi-national companies.

Recently, the Indiana Soybean Association hosted a delegation of buyers from China for an on-farm tour. Several smaller grain companies met with the delegation to begin talks toward state-specific deals.

In talking with several members of the Chinese delegation, I found them to be very well informed about U.S. agriculture and very much aware of specific states and the yield and quality of each state.

While we tend to think of U.S. agricultural trade as this homogenous mass, our customers see many distinct products and regions in our nation and are willing to strike deals with state-specific entities.

There are many nations around the world that have economies that are growing rapidly. Most of these are not the ones you see on the front page because they are busy doing business rather than harboring terrorists. Vietnam, for example, has a rapidly growing economy and a rapidly growing middle class. Yet, Indiana is the first U.S. state to bring a strictly agricultural delegation to the country. In 10 years, Vietnam will be where Korea is today.

Midwestern agriculture has the chance to do an end run around Brazil, France, and the other trade malcontents and to work directly on deals that will grow our markets. It is not an easy process and is one that will take foresight, commitment, and resources to realize. Yet, if accomplished, it will be a way to expand our agricultural trade without running afoul of the WTO watchdogs.

This farm news was published in the Oct. 4, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.

10/4/2006