This is the first of a three-part series on the impact of U.S. agricultural exports on the U.S. exports and the risks and promise for ag trade going forward.
Iowa farmer Tim Burrack is certain that international agriculture trade helps create and maintain jobs in the U.S.—particularly his own. A veteran of trips in past years to China, Japan, and Taiwan, among others, he finds that people on opposite sides of the globe like to know with whom they are trading.
“It’s always a good thing to go an d meet the people you want to do business with, just like it’s a good when you can get them to visit our farms,” says Burrack, a former board member of the U.S. Grains Council, which promotes trade in corn, sorghum and barley. “They can see your products, methods, and management and you can amaze them with your efficiency.”
Export markets are critical not only to farmers like Burrack, U.S. agricultural trade also supports jobs up and down the supply chain, from the local elevator to railroads, trucks and barges, to ports spread from Savannah, Georgia, to New Orleans and the Pacific Northwest, and finally to the ships, trains and trucks that carry the products to their ultimate foreign destinations.
USDA estimates that for every $1 billion in US agricultural exports in 2022, more than 6,300 were supported throughout the economy. Overall, ag exports that year required 1.25 million full-time civilian jobs, which included more than 773,000 jobs in the non-farm sector.
A separate estimate by the International Trade Administration is that 6.7% of total U.S. employment (not just agriculture) is dependent on foreign trade – 10.2 million jobs in all.
In 2022, the latest year for which full data is available, nearly 580,000 jobs in the United States resulted from trade involving soybeans, corn, cotton, chicken, beef, pork, wheat, and almonds, based on an agricultural trade multiplier maintained by USDA’s Economic Research Service. Those eight commodities had a total export value of more than $100 billion.
Soybean exports alone accounted for 187,637 jobs, and feed crops underpin exports of meat and poultry as well.
More than 40% of of this fall’s soybean production in the United States is expected to be exported, or two in every five rows farmers harvested. And that’s not counting the amount of soybeans that are used to feed livestock and poultry whose products are ultimate shipped overseas.
According to the U.S. Meat Export Federation, pork exports accounted for about 14% of the value of a bushel of soybeans in 2023, or $8.1 billion. To produce the ham from one hog requires 16.1 pounds of soybean meal as well as 1.3 bushels of corn and 4.4 pounds of dried distillers grains (a byproduct of corn ethanol production), according to the USMEF data.
Foreign trade in corn was responsible for nearly 92,000 jobs while beef exports worth nearly $11.7 billion tied to 82,000 jobs here.
RJ Karney, senior director of public policy at the National Association of State Departments of Agriculture, said there is a $24 return to the U.S. economy for every $1 in ag exports, citing information from the Coalition to Promote Agricultural Exports.
“That’s great value,” he said.
Nearly every state department agriculture has staff devoted to promoting that state’s products abroad. NASDA members work frequently with USDA’s Regional Agricultural Promotion Program and Emerging Markets Program to make inroads in other countries through frequent communication and trade trips.
Despite economic impact of U.S. ag exports, they face headwinds
The Agriculture Department is now projecting that the U.S. agricultural trade deficit will widen to $45.5 billion, the largest on record, in fiscal 2025, which started Oct. 1. The United States began running an agricultural trade deficit in 2019 after China responded to tariff hikes introduced by then-President Donald Trump by imposing new tariffs on U.S. ag exports. The U.S. has since faced an agricultural trade deficit in four of the last six years. The FY24 trade deficit of $32 billion was the largest on record.
Burrack, like many U.S. farmers, worries about the impact of trade barriers and tariff battles that can trigger retaliation.
“I think the tariffs levied beginning in 2018 set international market development back 40 years,” said Burrack, who worries about the continued impact of tariffs and trade wars.
“What was done tariff-wise may have been justified but my line is that I don’t mind being part of a cut for the greater good of the country, but I don’t want to be cut off at the knees.”
While campaigning this year, Trump called for imposing an across-the-board tariff on all imports, plus raising the tariffs on China as high as 60%. Since winning the election, Trump has threatened to impose separate new tariffs on the three biggest markets for U.S. ag exports – Mexico, Canada and China.
By the measure of his election results, Trump has made a powerful case to voters that tariffs are in their interest.
You’d have a hard time convincing the100-plus employees at Houston-based drone-maker, Hylio, that tariffs are necessarily bad. When the first Trump administration enacted—and the Biden administration continued—tariffs against Chinese products, that fledgling business received a boost.
“Those tariffs benefit the only
prominent U.S.-made option for spray drones in the industry,” says Arthur Erickson, the CEO of Hylio, who founded the company with friends at the University of Texas at Austin nearly a decade ago. “We’re getting a lot of that benefit even though we’re not lobbying us versus them,” he adds.
Hylio has sold nearly 1,000 of their various drone models, mostly in the U.S. Depending on the size of the model, the drones can carry between 2 and 18 gallons of product that can be sprayed by one of their drones, usually from 10-15-feet above a crop. Their drone sizes and accompanying software packages cost from $20,000 to $80,000.
One can purchase a Chinese- made drone for less, but, according to Erickson, you don’t get their combination of proprietary software (AgriSol) and higher quality hardware. The Hylio drone operates with the use of a tablet that incorporates a joystick. A customer can literally draw a line around a field on the tablet’s map and, when activated, the drone can take off and spray fungicide or other chemicals autonomously.
“I don’t personally believe in banning a product from any country,” says Erickson. “The idea [with tariffs] is to give the American companies a chance in the market—and it does give us a fighting chance.”
The benefits to his company that Erickson describes are the key arguments for tariffs in a nutshell. An overseas company with cheaper labor costs provides a less expensive high-tech product—a product that U.S. officials would also like to be made in the U.S. The tariffs attempt to level the playing field until the domestic company has a secure foothold in the market.
At a certain level, though, protectionism can hurt jobs and job creation. Relationships between individuals in the U.S. and other countries are key to opening new trade avenues and maintaining them, according to Karney.
The non-profit Tax Foundation, in a report in June, says the Trump-Biden tariffs begun in 2018 will reduce long-run GDP by 0.2% and employment by 142,000 jobs. The organization found that the total of $79 billion worth of trade tariffs amounts to an annual tax on households of $625.
Trade agreements between the U.S. and other countries, or groups of countries, help create jobs in both sides of the agreement, according to Andrew Brandt, director of trade policy at the U.S. Grains Council, which works to foster and maintain markets for corn, sorghum, and barley around the world.
“Trade agreements have been very important,” says Brandt. “If you look at the NAFTA then USMCA agreements that involve Mexico I’d argue that’s an example of both countries benefiting.” Mexico grows more corn now than they did 30 years ago, in part because of their feed needs for a growing cattle sector there.
“If you look at the trade numbers it’s hard to come to a different conclusion,” says Brandt. In a country like South Korea, where the U.S. has trade agreements, that translates into jobs. “The price the farmer receives is better because there are more markets,” he says. “Those better prices translate into better wages for employees, and they spend their money in the local community.”
The Port of Savannah in Georgia, the third busiest in the U.S., helps support either directly or indirectly more than 496,000 jobs in the state, according to officials there. In 2021, the latest such study conducted by the University of Georgia, shows that number of jobs supported by the port increased by 60,000, to more than 561,000 jobs.
The port moved 5.3 million 20-foot equivalent container units for their fiscal 2024 year, which ended June 30. About two thirds of what they handle are imports and the other third are exports. Just about half their exports are ag-related. About 13.4% of all agribusiness exports move through the Port of Savannah.
Recent trends heighten importance of exports for the ag economy
Veteran commodity trader and market expert, Dan Basse, says exports are key for U.S. ag products—and ag jobs. U.S. ag exports are down $40 billion from two years ago and that number is growing. There isn’t enough domestic demand to make that up.
“We really need to focus on export demand,” he told Agri-Pulse.
He says the U.S. share of
global agricultural trade has dropped from 62% in 1979 to about 12%, and competition from South America continues to grow, he noted.
"You can see the big diminishment, if you will, of U.S. ag prowess and presence in the world agricultural trade, and I really believe that's the biggest problem going forward for American agriculture," he said.
Even with the importance of trade, there are areas of domestic production that could shift. As it is the U.S. imports a lot of organic soybeans and soybean meal, most of it destined for poultry feed, according to Ken Roseboro, the editor and publisher of The Organic & Non-GMO Report.
“We used to impor t a lot from India,” says Roseboro. “But there are concerns about integrity of the organic label about soybeans and soybean meal from, say, India or West Africa,” he says.
The U.S. doesn’t buy much organic soy or soy meal from India any more following the ending of the India Organic Recognition Agreement. And though they haven’t ended purchases from West Africa, the U.S. is concerned about the organic certification processes there as well. The U.S. does also purchase organic soybeans from Canada, Paraguay, Argentina, and Turkey.
Though a small part of the overall market, the U.S. could grow more of these crops for domestic use. The risk, according to Roseboro, is the volatility of the market for niche crops.
“When organic [prices] go down the organic farmer goes back to conventional crops,” Roseboro says.
Recently the American Soybean Association and the National Corn Growers Association commissioned a study that looked at international markets with an eye toward even more tariffs by the U.S.—accompanied by similar barriers in other countries. The study was blunt:
“A repeated tariff-based approach accelerates conversion of cropland in South America, which has permanent ramifications on soybean and corn exports worldwide. And U.S. soybean and corn growers bear the burden… In short, South America would gain on all fronts at the expense of U.S. farmers and the U.S. economy.”
Help with international trade, which thereby helps create or maintain jobs, doesn’t always come with a big splash. An example, according to Peter Friedmann of the Agriculture Transportation Coalition, is the Ocean Shipping Reform Act, passed in 2022 with bipartisan support. The act made it more difficult for ocean carriers to delay their shipping schedule at the last moment or charge numerous onerous fees.
“This legislation limited those types of practices,” says Friedmann. “They weren’t providing service that is in the best interest of U.S. agriculture. We have to be an affordable, dependable supplier and the Ocean Shipping Reform Act made ocean transportation more dependable.”
Along those same lines, the Soy Transportation Coalition, a group of state soybean organizations as well as the American Soybean Association and the United Soybean Board, often focuses on decidedly mundane issues such as port expansions and even bridge repair in tiny farming counties.
“Over half the soybeans produced in the U.S. are exported so the supply chain is really critical here,” says Mike Steenhoek, Executive Director of the Soy Transportation Coalition. “If we’re not leaning on these issues, we shouldn’t expect other people to do it for us.”
The coalition recently raised $1.3 million to help underwrite some of the preparatory costs for an expansion at the Port of Grays Harbor in Aberdeen, Washington.
The expansion will essentially double what the port can ship—and soybean meal is a primary product sent overseas from there. The coalition also helped the port secure a $25.5 million grant from the U.S. Maritime Administration for the expansion itself, which involved additional rail lines.
On a smaller scale, the coalition also helps individual counties plan for and upgrade countless numbers of bridges on rural roads. The coalition has provided some funding to offset pre-engineering costs for a number of bridge upgrades and have even published an analysis of proven and more cost-effective ways to upgrade or replace bridges.
“This is not a very sexy topic but incredibly relevant to our industry,” says Steenhoek.
Next: The rise and stagnation of the Chinese market for U.S. agriculture.
