Ag forecast emphasizes export opportunities
by Matt Shinall
Jan 30, 2013 | 1560 views | 0 0 comments | 10 10 recommendations | email to a friend | print
University of Georgia Extension Economist Curt Lacy presents a summary of the 2013 Georgia Ag Forecast, an annual publication of the UGA College of Agricultural & Environmental Sciences, Monday in Rome. MATT SHINALL/The Daily Tribune News
University of Georgia Extension Economist Curt Lacy presents a summary of the 2013 Georgia Ag Forecast, an annual publication of the UGA College of Agricultural & Environmental Sciences, Monday in Rome. MATT SHINALL/The Daily Tribune News
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With a show of hands, only two at Monday’s Ag Forecast presentation acknowledged the use of exporting to sell their product in markets outside the U.S. — an opportunity speakers emphasized and promoted as a tool for agricultural producers of every size.

With the nearly 100 regional agriculture industry leaders in attendance for the 2013 Georgia Ag Forecast, presenters hoped to change the slim ratio of guests actively exporting their products. The event was held Monday at the Rome-Floyd County E.C.O. Center as presented by the University of Georgia College of Agricultural & Environmental Sciences.

Speakers from the Georgia Department of Economic Development and Certified Angus Beef presented facts and figures supporting the argument for increased agricultural exports before a University of Georgia economist formally presented a summary of the 2013 Georgia Ag Forecast — an annual publication provided by the UGA College of Agricultural & Environmental Sciences.

“We started this program years ago to help those who are farmers and those who work with farmers to get ready for the coming season to really get an idea of prices of both what you might produce and our best projections of what your input costs will be over the coming season,” said J. Scott Angle, dean of the UGA College of Agricultural & Environmental Sciences. “I’ve been talking a lot over the last two years about Georgia becoming, in many ways, the breadbasket of the world. There are a lot of reasons for feeling that is true, and I think when you see our forecast today you’ll get a sense of just how well this industry is doing.

“What is going to make this the breadbasket of the world is not only producing the materials here, but we have to get them to the people who want to buy them and that is typically right now people in Africa and Asia. That’s where the greatest growth on the planet is happening right now.”

Angle and keynote speaker Kathe Falls, director of the Georgia Department of Economic Development International Trade Team, spoke to Georgia’s location and resources as a major reason for its success. Emphasis also was placed on the importance of Georgia’s ports and the proposed deepening of the Port of Savannah — especially as work continues to expand the Panama Canal.

“A lot of folks ask us, ‘Why does the state of Georgia even have a program to help Georgia companies export?’” Falls said. “The reason for that is, when a company sells product overseas, they create twice as many jobs as when they only sell domestically. For every job created in making a product, another job is created in getting the product to market between ship lines, bankers, translators, freight workers, etc.

“Statistically speaking, companies that sell overseas or in international markets also grow about 20 percent faster than those that just sell domestically, they’re less likely to go out of business and they pay their employees higher wages because there’s more skilled labor involved. Companies who sell products overseas often discover that their risks are diverse, so you’re not just invested in the U.S. market and the downturns of that market. You could have a boom in one market offset a bust in another area.”

Falls shared with guests a barrage of statistics on Georgia’s existing exports, including what products are being shipped to which countries. Georgia’s largest international customer is Canada, followed by Hong Kong and Mexico. Data from 2012 showed a slight increase from the year before, but 2011 and 2010 were record setting for Georgia’s international exports. Falls expects to see further growth in Canada and emerging markets, such as Vietnam.

Agricultural commodities accounted for 39 percent of all exports flowing through the Port of Savannah in fiscal year 2012. Falls also encouraged local producers to pursue export opportunities by dispelling myths surrounding international trade. At the forefront of misconceptions, said Falls, is the belief that exporting is only for large companies. According to Falls’ data, 97 percent of all Georgia exports came from small to medium-sized companies.

For more information and resources for international exporting, visit www.georgia.gov/business-resources/international-business-to-business/ or visit www.tiny.cc/agexport to view Falls’ PowerPoint presentation from the forecast.

Taking the stage after Falls was Executive Account Manager for Certified Angus Beef Maggie O’Quinn. O’Quinn, a representative of the Certified Angus Beef brand, markets the up-scale beef product to retailers and restaurants in the Caribbean, South America and Spanish-speaking areas of the United States.

O’Quinn also spoke to the opportunities available in the area of agricultural exports, specifically livestock. In addition to her areas of expertise, including promising markets in Chile and Columbia, O’Quinn expects to see demand increase in Japan as work is being done to finalize the removal of livestock trade limits. While not as imminent, she also sees growth opportunities when China opens its market to animal protein products.

Her greatest optimism for U.S. beef and agricultural products in general, however, does not come from one place in particular, but in feeding the world’s population as both Angle and Falls alluded to in their presentations.

“In the year 2050, we’re going to have 9 billion people on the plant,” O’Quinn said. “This is dramatic and Kathe [Falls] nailed it. Is Georgia well-positioned to feed the world? Absolutely. This is our job. This is our responsibility, and so it is absolutely extraordinary when you look at the increase — we’re going to have 2 billion more people to feed in a short, 40-year timeframe.

“Folks, it’s not about us. Only 4 percent of the entire world’s population lives in the United States. What’s going to affect our lives is going to happen outside of our borders and this is why what we’re doing on the export side is so important.”

Wrapping up the event, sponsored in part by Georgia Farm Bureau and the Georgia Department of Agriculture, was UGA Extension Economist Curt Lacy.

“Agribusiness continues to be Georgia’s largest sector,” Lacy said. “If we think of all the things we produce, we produce over 65 products in this state that have significant farm value.

“There are a number of agricultural enterprises that have significant economic value. In 2011, that number was $12.9 billion; it was up almost $1 billion above what we did in 2010. When you look at the aggregate figures — in other words, if you think of direct and indirect economic output — it’s worth somewhere in the neighborhood of $75 billion to the state’s economy.”

Taking focus away from the global stage and returning to local conditions, Lacy reminded those in attendance why they were there — the 2013 forecast. In his summary, Lacy presented data on the record-setting corn crop in 2012 and bumper crops in peanuts and soybeans for the same year.

Lacy expects farmers can see elevated prices continue in 2013 for grains and row crops, which in turn will have a negative impact on beef cattle production. The forecast points to increasing prices in what Lacy called the three F’s — fuel, fertilizer and feed.

In 2012, calf operations slowed to a record low herd size across the state, reaching numbers not seen since the 1940s. He expects beef prices to remain steady in 2013 while acres in corn and soybean increase.

While Georgia farmers saw success in 2012, others across Texas and the Midwest experienced persistent drought. Lacy concluded his economic forecast with a note of uncertainty, leaving the fate of Georgia’s 2013 crop yield to another type of forecast — rain.

“As we head into this crop year for 2013, there’s a lot of concern,” Lacy said. “You don’t really need an economist to predict the markets for this year, you need someone that can tell you whether it’s going to rain or not because that’s what all these forecasts hinge on. As much as we’ve advanced in technology ... the fact is, we still rely on our natural resources and the fact of whether it rains or not.

“Even though it was really dry last year, we got rains at the right time. So as a result, we actually had a really good year in terms of production. ... There were a lot of crops we had a really good year for. So it’s not always about how much rain you get, but it’s also a matter of when you get the rain and last year we got those rains at just the right time.”

For more information, visit www.georgiaagforecast.com or www.caes.uga.edu.