5 things to know about Badger State’s record exports
But on Wednesday, the World Trade Organization expected a significant slowdown in 2023 – with exports stalled by Russia’s war in Ukraine, high energy prices, inflation and monetary tightening.
Mark Rhoda-Reis is director of the International Agribusiness Center at the Wisconsin Department of Agriculture, Commerce and Consumer Protection. He recently joined Wisconsin Public Radio “The Morning Show” talk about the state of Wisconsin exports.
From growing demand and concerns about the value of the US dollar to strengthening trade partnerships with the United Arab Emirates and the United Kingdom, Rhoda-Reis has shared five things you need to know about Wisconsin exports.
1. 2022 exports are on track to be even higher than the 2021 record
Last year, Wisconsin exports grew 17.5% over 2020, adding $590 million in value. And according to Rhoda-Reis, 2022 is on track to beat that total.
In the second quarter of the year, exports already amount to 2.18 billion dollars, up 14% of the same period in 2021.
“So a good half of the year so far and pretty positive outlook from the industry and USDA to end the year even stronger than last year,” Rhoda-Reis said.
He attributes the growth to increased demand around the world following the COVID-19 pandemic.
Wisconsin ranks 13th among US states for agricultural exports and fifth for cheese exports. The state ranks first in exports of ginseng roots, prepared and preserved cranberries, unprocessed animal fur, bovine semen, whey and sweet corn, reports DATCP.
Wisconsin isn’t alone in seeing booming exports. Rhoda-Reis said all U.S. exports of food, forestry and agricultural products were up.
2. The World Trade Organization warns that 2023 could see a slowdown in trade
Although 2021 and 2022 are good years for exports, the WTO predicts that 2023 could see trade slow down.
“It could potentially be a tough year for us going forward,” Rhoda-Reis said. “Demand could potentially fall. And then also the strength of the dollar is probably one of the strongest factors right now… holding you back from being able to move forward.”
The US dollar is the strongest it has been in two decades and, according to a NPR Reportit impacts economies and markets around the world.
In order to avoid US inflation, the Federal Reserve has raised interest rates several times this year. This led to a domino effect, including lost profits for multinational companies. It also made US-made products more expensive, which can harm exporters making their products less attractive to other countries.
But Rhoda-Reis contradicted the WTO forecast, saying most Wisconsin agricultural exports are expected to remain strong.
“We haven’t seen the forecasts yet from all the economists who are doing this work, but (it may not be as pessimistic as what the WTO is saying in all countries,” he said. .
3. Dollar price, supply chain challenges remain top concerns
In addition to the price of the dollar in terms of other currencies, Rhoda-Reis said supply chain challenges remained a significant impediment to trade.
“That availability of containers to ship a lot of these finished, finished food products, and the fuel costs to move those products…I think those are concerns that would run counter to what we’re able to. ship,” he said.
Rhoda-Reis added that moving containers into Wisconsin is a logistical challenge in itself.
“From the companies we work with and talk to, it’s still difficult to get these containers. They have to wait longer, the price is higher. So the lack of an intermodal facility where these metal boxes, these 20-foot and 40-foot containers – the long boxes, are stored and made available, is always a challenge,” he said.
4. Wisconsin Works to Strengthen Trade in Asian Markets
In 2021, Wisconsin main export markets were Canada, China, Mexico, Korea and Japan. Looking ahead to 2023, Rhoda-Reis said the state is planning trade missions to Dubai, Bangkok and the UK.
“We help Wisconsin agribusinesses, dairy, meat and vegetable export companies to showcase their products to make it easier for them,” he said. “And we’re looking to bring businesses into that market to meet their potential buyers.”
5. Public funding opens the door to new exporters
The DATCP’s International Agribusiness Center has been funded primarily by federal dollars since its inception in 1966, but as of 2021, the agency received state funding for the first time.
The Wisconsin Agricultural Export Initiative is investing up to $5 million over five years to increase exports of dairy, meat, crops and other agricultural products by 25%. It also gives DATCP the flexibility to respond to changing market conditions.
Rhoda-Reis said the funding allows the agency to be “completely focused on Wisconsin’s needs.”
“It then allows us to have a bit more control over our destiny,” he said. “We are stepping up and being able to tailor a number of these activities specifically for Wisconsin.”
In terms of maintaining Wisconsin exports, Rhoda-Reis said extending state funding beyond 2026 is critical.
“To pursue this, I think is one of the most important and beneficial things we can do to help these exporters grow their business and bring new exporters into the market,” he said. declared.
This article republished with permission from Wisconsin Public Radio