Exports Big Part of Ag Production

Trade is a hot topic with a lot of uncertainty. Trade-policy decisions being made in Washington will impact farmers and ranchers in the countryside.

With more than 20 percent of U.S. agricultural production destined for foreign markets, agricultural exports are vital to the financial success of U.S. farmers. Exports allow our farmers to find additional customers among the more than 95 percent of the world population that lives outside of our borders. Exports also add value for farmers because many foreign customers are looking for products for which Americans find little or no value. For instance, consumers in Japan, South Korea and other Asian countries are willing to pay premiums for certain animal parts, such as beef tongue or chicken feet. These are undesirable in the United States but are delicacies in other cultures - creating added value to U.S. production through trade.

Agricultural exports are also important to the broader U.S. economy. On average $2.09 of domestic economic activity is created for every $1 of U.S. agricultural exports. That translates to jobs as well. The U.S. Department of Agriculture estimates that more than 6,000 jobs are created for each $1 billion in agricultural exports – equaling about 1.25 million jobs in 2022.

Where we export – In 2024, the United States exported $176 billion in agricultural products to a total of 189 countries and territories. And 75 percent of our total exports went to only 10 markets. Almost half of our agricultural exports went to only three countries – Mexico, Canada and China. Mexico became the No. 1 destination for U.S. agricultural products for the first time in 2024. From 2003 to 2023, the No. 1 spot alternated between China and Canada.

Additionally, almost half of all agricultural exports go to markets with whom the United States has a free-trade agreement. That’s a new record, and interesting as we have not signed a free-trade agreement with a new partner since 2012, when agreements with South Korea, Colombia and Panama entered into force.

What we export – What we export is determined by a multitude of factors. Of course there is geography, and there is climate, which determine where and what we can grow. The Corn Belt has some of the world’s richest farmlands and ideal growing conditions for its namesake corn. But we can only grow extremely limited amounts of such tropical products as coffee and bananas, in Hawaii and Puerto Rico. Economics is also at play. Labor is expensive in the U.S. as compared to other nations, leading U.S. farmers to specialize in crops that can be mechanically harvested, such as row crops and tree nuts.

With that in mind, let’s dive into what we export. By value, 48 percent of agricultural products we exported in 2024 were in the consumer-oriented-products category, which includes products one would find at the grocery store like meat, pasta, tree nuts and fresh fruit. Thirty-two percent were considered “bulk,” which generally includes unprocessed row-crop commodities such as corn, soybeans, cotton and tobacco. Intermediate products – which include processed commodities such as soybean meal, ethanol and seeds for planting – were 19 percent of the total.

Despite reduced commodity prices, soybeans and corn – sold with minimal processing – directly accounted for 22 percent of all exports by value in 2024, a total of $38.4 billion. Remember those products also benefit from exports in numerous other ways – as feed for livestock, feedstock for ethanol and as components of alcoholic beverages – among other export products. The U.S. Meat Export Federation estimates 512.7 million bushels of corn and 96.8 million bushels of soybeans were fed to animals eventually exported as beef and pork products in 2023. In 2024, exports of ethanol set a record at 1.9 billion gallons, which at 2.8 gallons per bushel translates to 684 million bushels of corn. The exports of corn through beef, pork and ethanol alone would increase the amount of corn exported by almost 50 percent.

Big picture – Exports are a key component of the success of U.S. farms, accounting for more than 20 percent of agricultural production by value.  For every $1 of U.S. ag exports, $2.09 of domestic economic activity is created.  Agriculture is also a key percentage of overall exports for our country – accounting for 8.4 percent of goods exported in 2024 and 5.5 percent of total exports, including services.

Agricultural exports have benefited greatly from the expansion of free trade in recent decades. That also means that when the United States restricts trade through tariffs on other countries’ products, U.S. farm and ranch goods are often targeted for retaliatory tariffs or restrictive measures.

EDITOR’S TAKE:

We often casually mention in the AIR how important exports are to farmers/ranchers in the U.S.  However, we don’t often get into much detail about why or exactly how much exports contribute. This article provides a more in-depth look at ag exports - what they are, the value, where they are going and even how much they contribute to the overall U.S. economy and jobs. Hopefully, this will provide you with a greater appreciation for why we say they are important to the farmers/ranchers in your area. It’s likely that the prices they receive, and their net income is greatly influenced by exportation.

You too can help improve their overall net income. How? AgPack®, of course. The total AgPack® offering is valued at more than $45,000 on many products and services they already use. So, be sure to mention AgPack® as a way of lowering the operating costs and improving overall net income for farmers/ranchers in your area.