Feed Bites

Industry Growth Relies on Untapped Markets

Written by: Lacie Dotterweich   |   June 22, 2023

Trade, Federal agencies, Brazil, Russia, China, Vietnam

“If we don’t find overseas markets for our products, many farmers, many producers, go out of business.”

That was the message Daniel Whitley, administrator of the U.S. Department of Agriculture’s Foreign Agricultural Service, told the American Feed Industry Association’s Board leadership at a recent meeting. Our global policy team would strongly agree - the future of American agriculture, and the U.S. animal food industry, will be contingent on demand from beyond U.S. borders.

Whitley hammered home the importance of United States agriculture having a presence in other countries, explaining that the last two years have shown record exports for agricultural products, despite industry facing “probably the most headwinds since the 1930s Dust Bowl.” How is this possible?

According to Whitley, the United States’ reputation for reliability, established in part by government promotion programs, have contributed greatly to this phenomenon. Whitley recalled the 2022 Dubai trade mission with Biden administration officials, which was the first in-person trade mission since the COVID-19 pandemic, and two weeks before war broke out between Russia and Ukraine. During and after the meeting, with over 165 countries present at the event, the trade delegation began to notice a pattern, “As the world gets more chaotic, trading partners gravitate toward U.S. products.”

“Trading partners want reliability, they want a reliable source,” Whitley explained. “The number one criterion in a trade partner is reliability.”

American agricultural markets are certainly reliable. Since 1977, an average of $9.6 billion annually have been added to the value of U.S. agricultural exports, equal to nearly $6.5 billion, or 13.7%, in additional export revenue. These gains can be attributed directly to the USDA’s export promotion programs.

“The Market Access Program (MAP) and Foreign Market Development (FMD) program have been around for decades, and they work,” Whitley expressed. “These programs are why we are able to set records.”

Through MAP, USDA partners with U.S. agricultural organizations to help build commercial export markets for U.S. agricultural products and commodities. This program is essential for the U.S. animal food industry’s ability to grow in export markets where there is an increased need for animal protein. 

Unfortunately, despite the program’s incredible success, one-third of MAP’s funding has been lost since 2006 due to sequestration, inflation and program administration. 

“The reality is, we can only work with what we have, and the programs have never had an infusion of increased funding. If we don’t talk about our programs and grow demand, our agricultural economy suffers dramatically,” said Whitley.

If we want to remain relevant in foreign markets, the U.S. must bolster our international market development efforts, or accept our position as second place behind our competitors. Competitors are making headway in high growth potential areas. Africa, for example, is playing a pivotal role in global affairs right now as it is expected to have the fastest population growth in the next decade.

“All our competitors – Russia, Brazil, China – are in Africa. It is critical that we build our presence and influence and take Africa seriously,” Whitley continued.

The message is clear: we need to be present and prevalent around world.

This is one reason why the AFIA continues to support increased funding for MAP and FMD through the Farm Bill. The AFIA has been a recipient of MAP funds since 2020, which has advanced our global market development efforts in Vietnam and China. However, without an increase in this funding, we are limited in the impact we can make. In particular, we are calling for MAP funding to be increased to $400 million annually and FMD to $69 million annually, given neither program has seen funding increases since 2002 and 2006, respectively. Couple that with the added strain of sequestration and growing USDA administrative expenses, along with inflation and a depreciated U.S. dollar, annual program funding has been reduced dramatically.

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