Rising exports prompt farms to seek new markets
LANSING — With a new South Korea Free Trade Agreement in hand, state officials are pushing hard for more Michigan-based companies to sell their products abroad.
The pact eliminated all duties such as tariffs and import quotas and virtually all other restrictions on trade between the two countries.
The most recent figures show Michigan ranks 18th in the United States for agricultural exports, with a total value of $1.75 billion. It is the seventh-largest exporting state for fruit and processed fruit products and the ninth-largest exporter of vegetables and vegetable products, according to the state Department of Agriculture.
More than one-third of Michigan agricultural commodities are exported each year. The top agricultural exports are soybeans, feed grains and wheat.
“Agriculture exports help boost farm prices and income, while also supporting over 14,700 jobs both on the farm and off the farm in food processing, storage and transportation,” said Jamie Zmitko-Somers, international marketing manager at the Agriculture Department.
In 2010, Zmitko-Somers said, 53 Michigan companies participated in 144 programs and services of the Food Export Association, a nonprofit organization that promotes the export of food and agricultural products from the Midwest. Participation resulted in an actual increase of export sales of $95.1 million, far more than the projected increase of $12.9 million, according to the department.
“Agricultural exports keep growing,” said Bob Boehm, manager of the Michigan Farm Bureau’s Commodity and Marketing Department. “We do rely on the export market a lot, since about 96 percent of the population in the world is outside the U.S.”
Boehm said that Michigan’s agricultural economy and exports are extremely diverse.
“Canada is Michigan’s largest export market because of its proximity. But if you talk about an individual commodity, that may vary. A lot of pork is going to Asia, and many black beans are going to Mexico. It just depends on the type of commodities,” he said.
To maintain Michigan’s agricultural export competitiveness, Boehm said many issues must be dealt with. Transportation is one of those issues because export companies must reduce the time it takes for their products to reach a destination.
“In addition, we have to make sure that we are continuing to work on trade agreements to open up markets so we don’t face unfair trade barriers with our trade partners,” he said.
Zmitko-Somers said free trade agreements with various countries give preferential treatment to U.S. products. However, none of the agreements give preference to Michigan products.
“The agreement with South Korea is considered one opportunity to increase export sales of produce in the state,” Zmitko-Somers said. “There are also some new opportunities in Colombia, as well as Panama.”
Richard Bogard, president of Cherry Central, agrees.
“Right now, our company is expanding our marketing efforts to the central part of Asia. Because of the new deal with South Korea, we are definitely looking for more opportunities there,” Bogard said.
Cherry Central is a Traverse City-based cooperative that ships red tart cherries, apples and blueberries.
“Our company exports to between 20 and 25 countries, such as Japan, United Kingdom and Chile. The annual revenue generated from our agricultural exports is approximately $20 (million) to $30 million,” he said.