Marketing of U.S. Ag Products Generates Sales

Oct 21, 2016  | 3 min  | Ep4209

For the second year in a row Chinese buyers committed to a major purchase of U.S. Soy, this time buying 5.1 million metric tons.

The export will help increase demand for the commodity and as Peter Tubbs reports, the U.S. farmer has benefitted from deals like this in the past. 

Export volumes of American agricultural products are growing each year, and the marketing of American ag may be the key.

A study released this week by Informa Economics found a high rate of return from government programs that promote American agricultural products to foreign markets. The study was commissioned by the U.S. Wheat Associates, the USA Poultry and Egg Export Council, and the Pear Bureau Northwest.

Dr. Gary Williams, Texas A&M “What you can say from these results, when you go around and talk to your friends, and others, is to say our programs, export market development programs, have accounted for 15 percent of the export revenue that has been generated for agriculture.”

That equals a yearly average of over $8 billion in added economic lift for the ag economy since 1977. The US exported $150 billion of agricultural products in 2014, and the value of ag exports has been steadily increasing since 2009. Researchers from Texas A&M, Oregon State and Cornell calculated the value of US exports increased by $28 dollars for every dollar spent in export market development.

The benefits of export marketing ripple through the entire agriculture supply chain.

Dr. Gary Williams, Texas A&M “There are more purchases being made, more expenditures being made, more output being generated, because of that additional exports that are there. So that is what this measures. This program has added up to 239,000 jobs, which is a reduction in the unemployment rate of about 3 percent. That’s pretty impressive.”

The study also found that the marketing of a specific ag product, such as corn, generates a positive halo effect around all ag products the United States exports, increasing both their export volume and revenues. A single year of promotion also carries over into subsequent years, multiplying the effects of the marketing dollars.

American farmers provide 70 percent of the cost of the USDA’s export marketing programs, primarily through checkoffs when ag products are sold off the farm.

Dr. Gary Williams, Texas A&M “This is an economic growth program, and to do away with the program is to do away with an important source of economic growth.”

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